The latest coronavirus vaccine developments have brightened the outlook for the U.S. economy, with UBS economists boosting their GDP forecasts for the country - CNBC reports.
Pfizer and BioNTech announced Monday that their Covid-19 vaccine was more than 90% effective in preventing the infectious disease. The announcement fueled optimism that the pandemic could come to an end sooner rather than later, driving up stock markets globally.
UBS had originally estimated that the number of coronavirus infections in the U.S. would approach zero by the end of 2021, but the vaccine news has made the bank bring that forecast forward by six months.
“We might get a situation where reported cases of Covid in the United States fall very close to zero in Q2 (second quarter) of next year. That six month difference, that two-quarter difference matters a lot, it means an extra 1 to 1.25 percentage point gain in GDP next year,” Seth Carpenter, chief U.S. economist at UBS, told CNBC’s Joumanna Bercetche on Thursday.
He added that the vaccine news “was very encouraging” because the efficacy rate came in much higher than analysts were anticipating.
The United States has experienced more than 10 million Covid-19 cases since the pandemic started. The country has seen record highs this week in terms of coronavirus hospitalizations and daily infections, with 153,496 cases on Thursday, according to Johns Hopkins University.
This comes as speculation mounts on whether the U.S. economy will be shut down once again. An advisor to President-elect Joe Biden has said that closing businesses for four to six weeks could help reduce the number of infections and get the economy on track until a vaccine is approved and distributed.
With cases surging in Chicago, Mayor Lori Lightfoot asked residents on Thursday to cancel Thanksgiving plans and stay indoors.
