More clarity about vaccination and growth prospects for 2021

HUNGARY - In Brief 04 Jan 2021 by Istvan Racz

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It has been widely agreed for a while that economic growth prospcts for 2021 will greatly, if not mainly, depend on the speed and efficiency of Covid vaccination.In this context, the first key piece of domestic news this year is a new statement by PM Orbán that the current lockdown rules will remain in place until Covid vaccination has reached an appropriate level domestically. As a reminder, the existing lockdown rule was introduced for a month on November 11, then extended for a further month's time, and it would expire on January 11 without any further measure, even though the emergency situation, the extraordinary legal order that provides the basis for the lockdown will hold until March, according to the current status quo.Now, the appropriate level of vaccination is not an officially stated number at this moment. The current expert guesstimate puts it to at least 3.5-4 million people, on the grounds that about 2-2.5 million domestic inhabitants are believed to have passed through a Covid infection already (against the officially registered 329 thousand cases) and about 60% of the population, so just under 6 million, is required to have immunity as individuals to reach what is called herd immunity for the whole nation. We think that the relaxation of Covid restrictions could, and is likely to, start before the country actually gets there, but only in a rather cautious manner if another pick-up of the infection curve, as is happening repeatedly all around Europe, is to be avoided.In reality, mass vaccination started within the EU on December 27, with the only product (the Pfizer-BioNTech vaccine) that has been licensed by EU authorities until now. Vaccine supplies ...