Western Europe’s COVID concerns should be short-lived

Outlook

Western Europe’s economic recovery has been slowed by rising COVID-19 hospital admissions in recent weeks. There is a strong possibility that more countries will introduce restrictions for the night-time economy, and potentially on individuals without a booster shot, if cases continue rising.

Nevertheless, data from Israel suggests that the impact of COVID-19 in Western European countries will abate once booster vaccinations are administered widely. In addition, in 2022 breakthrough anti-viral drugs to treat COVID-19 will be on the market, which should reduce COVID-19 mortality, and consequentially, the need for lockdown restrictions.

Impacts

• EU countries face sustained periods of social unrest over the coming weeks over lockdown and vaccine policies.
• Failure to increase first and second dose vaccination rates in Austria and Germany would weaken the impact of their booster campaigns.
• Low rates of vaccination suggest Central and Eastern Europe’s recovery will be significantly slower than Western Europe’s.