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Coronavirus Vaccine Possible by Jan 2021, Lifts Hopes of Economic Rebound and Oil Price

It’s a crisis much foretold. As early as late February 2020, economists have been sounding the alarm that the economic consequences of the Coronavirus pandemic would be at least as bad as the damage Covid-19 itself would do. COVID-19, which originated from a Chinese city, Wuhan, has left over 320,000 persons dead and millions of other people sick. The economic consequences, arising from the lockdown imposed on cities all over the world to curtail its spread, have frozen investment and the movement which humans all over the world engage in daily to produce and exchange goods and services. Millions of people all over the world have lost their jobs.

From Abuja to Washington, there has been a tension between continuing with the lockdown and saving lives and easing the lockdown and saving the economy. President Donald Trump has consistently lashed out at Governors who have been reluctant to ease the lockdown while talking up the imminence of the arrival of a vaccine. Everyone somehow realises that all restrictions of the lockdown are highly vulnerable to the emergence of new infections. Only a vaccine could provide the workers and investors of the world the confidence to go forth raise global GDP. Moderna Therapeutics has raced ahead in the search for a vaccine to produce a vaccine candidate approved for trial on human beings.

The United Kingdom’s GDP slumped by 5.8% in March 2020, the sharpest monthly decline ever (in the total value of goods and services produced); first quarter GDP declined by 2%. The slump will be much steeper in the second quarter given that the UK economy was on lockdown for only two weeks in the first quarter. Output in the United States of America fell by 4.8% in the first quarter and economists are projecting a fall in GDP as steep at 41% in the second quarter. Growth is projected to fall by 3.4 % in Nigeria in 2020, weighed down by the restrictions on mobility and also reduced oil prices. .

The Great Oil Price Crash; Lockdowns and Parked Cars

 

The price of oil sank to its lowest level in 18 years, as demand for crude crashed amid the coronavirus pandemic and the lockdown imposed all over the world to curb its spread. Refineries around the world are processing less crude oil as cars and planes are parked.

 

At a point, Brent crude oil fell to $22.58 per barrel, a development that has wrecked the budgets and finances of nations like Nigeria where government expenditure and the economy depends on money from oil exports.

 

The announcement of the Moderna breakthrough met with other good economic news that lifted stock markets and the oil price. The Federal Reserve Chairman, Jay Powell, had announced that America’s Central Bank, was ready to support the economy with more interventions if required and the easingof the lockdown in major European countries like Germany, the United Kingdom, France and Spain increased economic activity and demand. The price of West Texas Intermediate (WTI), the oil market benchmark for American crude oil, jumped by 8%.

 

 

Moderna May Beat Harvard

 Epidemiologists at the Harvard T.H Chan School of Public Health are not expecting a vaccine this year or next. They have concluded a study which expects a vaccine to be found not earlier than 2022 and had recommended the practice of “intermittent social distancing” through 2020. If they are right, this will create a 60% economy with many sectors and city on intermittent lockdown. The Moderna candidate vaccine need to do well i.e. provide immunity and be safe, when tested on  a much larger sample of people to be finally approved.

Professor Akinola Abayomi, the Commissioner for Health in Lagos, had also that it usually takes no less than a year for a vaccine to be developed when there is an outbreak of a new disease. A medical researcher, Abayomi explained to some lawmakers in the state that there are some steps that need to be taken for a vaccine to be approved, one of which he said is clinical testing.

Moderna’s First Human Trial

 Moderna’s candidate vaccine, developed in partnership with the National Institutes of Health has raised immunity in the small-scale human trial to levels comparable to people who have developed antibodies after recovering from Covid-19. The first human trial involved eight people aged between 18 and 55.

Speaking on the experimental vaccine, Moderna’s Chief Medical Officer, Dr. Tal Zaks said if studies go well, the biotech company may make the vaccine available to members of the public as early as January 2021, for consumption.

“This is absolutely good news and news that we think many have been waiting for quite some time,” Zaks was quoted as saying.

Word of caution – 90% of the drugs that make it to the stage of human trial fail to get approval because they are not sufficiently effective or safe.

Bring Back 2019

 Hopes for a rapid economy bounce back from the lingering pandemic are looking bleaker as the day goes by. As authorities of different countries, including Nigeria, are grappling with when to fully reopen their economies, economic experts are facing difficulties to predict how and when the world economy will fully energy from the unplanned hibernation.

“The very best-case scenario is we rapidly bounce back and we get close to something where we were before. Personally, I think that’s highly unlikely. The shock from the virus is going to trigger a broader economy-wide recession,” said Jesse Edgerton, an economist at JPMorgan. “That’s a really harsh reality.”

While the Moderna vaccine is a hope to hold on to, there are indications already that the economy will partially bounce back. And when it does, the normality and the way of life members of the public are familiar with will be different.

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“There will likely be some permanent damage inflicted on the economy,” says Greg Daco, chief US economist at Oxford Economics.

Irrespective of how soon a vaccine is approved for public consumption, economists have different opinions on when the economy will return to something like the pre-coronavirus normalcy. Some predict this won’t be until the end of 2021.

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