He also noted how current vaccine production plans would leave the world with the 22 billion to 15 billion vaccines needed to complete the global, three-dose mRNA vaccine series. That need was anticipated by a joint report calling for universal deployment of currently the most effective vaccines against COVID-19 infections.
“In this scenario, which matches our base case, we are likely to face a few more years of smaller, less-globally-synchronous COVID outbreaks that are still disruptive to production, and which are high-touch. generate temporary pull backs in services,” he said. , “The impact on inflation beyond these, but even minor Covid waves remain unclear. … That said, we still see the economy operating at close to full employment, as it was just before Omicron.
For the middle case, he forecasts that central banks will follow a gradually tightening path with an end point for rates in 2023 or 2024, not materially detracting from the optimistic scenario. Still, it will result in a less-everyday outlook for businesses and sectors that are relying on full demand for services and a sustainable return to full production.
Under the most pessimistic scenario, he suggested that COVID-fatigue and divisive politics could prevent the world from taking the steps needed to promote public health and achieve acceptable vaccination rates. Some scientists are sounding the alarm, suggesting that mass vaccination and a large number of mild COVID cases may not be due to the comfort that people believe them to be.
“Economically, that scenario would be out of any forecast we’ve seen. Larger waves of a more deadly version than Omicron’s could well push us back from full employment, while still disrupting supply.” ,” he said, noting that this would present central banks with a dilemma: either let inflation heat up due to supply issues, or tighten policy and create worse unemployment.