Which Countries Will Reach Covid-19 Herd Immunity in 2021?

Summary

• Vaccination rollouts are accelerating, and global Covid-19 cases are dropping.
• Early data from Israel suggests vaccinations are working, with hospitalised patients’ average age falling.
• 80% of the UK and US populations will have Covid-19 antibodies by May and July, respectively.
• Market data shows some correlation between vaccine successes and equity performance.

Introduction

For many countries, Covid-19 vaccination programmes are well under way. As of today, 73 have already begun inoculating nationals, and Israel has even administered at least one dose to 79.5% of its population (Table 1). Globally, an estimated 188mn have now received their first jab, and the vaccination pace is increasing (Chart 1).

At the same time, global coronavirus cases have fallen consistently since the start of the year (Chart 2). Over the last week, 2.6mn cases were recorded globally, down 15% WoW. The last time weekly cases were this low was 19 October 2020. So, ostensibly, there is scope for optimism.

Israel

All eyes have been on Israel’s vaccine rollout and its efficacy at mitigating mild and severe disease. The country has benefited from an efficient distribution of jabs and its relatively small size. To put it into perspective, the US vaccinated 1.5 times Israel’s population last week. Regardless, Israel has vaccinated almost 80% of its population, and 30% have received both doses.

The country followed a similar strategy to most, vaccinating the elderly and most vulnerable first. In mid-January, at the height of hospital admissions, the average age among the severely ill was 69 (Charts 3 and 4). It was not until an estimated 80% of over-60s received a vaccination that admissions began to fall. Over the last few weeks, hospitalisations and the average patient age have come down, suggesting the vaccines may be having a mitigating effect. The average age of the severely ill is 63, the lowest during the pandemic.

Immunity

If herd immunity is reached at 80%, then there is still some way to go before most countries are in the clear. Based on the assumptions that a) antibodies remain for around six months after a patient has tested positive, b) 25% of people are asymptomatic, and c) some immunity is built three weeks after an initial dose, we can forecast how quickly countries will achieve the target.

Among G10 countries (exc. Japan), the UK and US are the clear standout performers (Chart 5 and 6). Using infection and inoculation rates over the last 14 days, 80% of the UK’s population will have ‘some’ immunity by mid-May. The US will reach the same target at the start of July. No other G10 country would achieve 80% immunity in 2021 (Appendix). Outside of these countries, Chile will get there even quicker (beginning of May) given the recent speed of administering doses. Russia will also get close, although there is little data to go by.

Caveats

There are several caveats to consider. First, picking up on an interview with Harvard’s Michael Mina, all the major available vaccines present the exact same spike protein, i.e. they are clones of each other. Although these vaccines are said to be easily altered, virus mutations could nonetheless set back vaccines rollouts by several months.

Second, there is a lack of clarity around the effectiveness of the first dose. In data published by the three main vaccination manufacturers, the Pfizer/BioNTech, Oxford/AZN and Moderna, vaccines are 52%, 64% and 80% effective after the first dose, respectively. Our World in Data estimates the share of the population that has received both doses prescribed by the vaccination protocol and are therefore ‘fully vaccinated’. By this measure, the UK fares significantly worse (Chart 7).

Third, vaccine rollout pace is also a function of the willingness to participate in programmes. On this front, there appears to be a greater propensity to receive a vaccine in the UK compared with several key European countries (Chart 8).

Lastly, there is also a case to be made around the proportion of individuals who have received a vaccination but also tested positive over the last six months. Currently, there is no clear strategy to avoid ‘double dosing’, and this probably creates upward biases in our estimations. However, the relative importance of antibodies from having had the virus versus from the vaccine is small and will reduce over time as cases fall.

Markets

It is yet unclear whether a successful vaccination rollout has positive spillovers on markets. To test, we tracked equity and FX performance from the first day after which vaccinations began in a country to the latest date for which there is vaccination data. Across the 43 countries we tracked in our vaccination table, correlation between equity and vaccination performance is 0.25. For a small subset of major countries, the positive correlation is clearer (Chart 9). There is less of a relationship between FX and vaccination performance (Chart 10).

Appendix