A closer look at projections of global economic growth since the start of the pandemic shed light on the potential impact of vaccinations on economic recovery. There are notable differences in the IMF’s economic forecasts before the development of the vaccines (April 2020), during vaccine development (October 2020) and after commencement of vaccine roll-out (April 2021).

To understand the impact of COVID-19 vaccination rates on economic recovery, UNDP analysed the change in recovery forecasts given vaccination rate in February 2021 for more than 195 countries using the difference in the World Economic Outlook estimate of GDP growth rates between October 2020 and April 2021.

Driven by increased vaccination rates, high-income and upper middle-income countries are projected to make stronger than expected recoveries with the latter group expected to make a U-shaped recovery. At the same time, forecasts for lower middle-income and low-income countries are not encouraging: there was a significant downward revision of economic growth in both group of countries (compared to estimates from October 2020).

UNDP analysis suggests that the recovery rate is predicted to be faster for countries with higher vaccination rates, with about US$7.93 billion increase in global GDP for every million people vaccinated. For low-income countries where vaccination rates are almost zero, the path to recovery will be long and uncertain unless urgent corrective measures are taken.

If low-income countries had had the same vaccination rates of 8.86 percent in February 2021, similar to high income countries, their growth forecast would have been revised upwards by 1 percentage point, increasing their GDP by US$38 billion in 2021. By the end of February, the total number of people who received at least one vaccine dose was 147 million people, or 3.32 percent of the adult population globally.

As background, the forecasts in October 2020 painted a bleaker picture when compared to April 2020 due to a more complete understanding of the economic fall-out of the pandemic. At the same time, promising vaccine candidates in the development pipeline resulted in moderate to strong projections of economic recovery for 2021 for all four country groups. However, by April 2021, it was clear that economic recovery would not be uniform across country groups, most likely driven by concerns around inequitable access to vaccines.