Last year, the single most important determinant of GDP growth was the path of COVID-19. Due to the absence of vaccines or effective treatments, efforts to control the spread of the virus focused on non-pharmaceutical interventions, such as lockdowns, social distancing, quarantines, and self-isolation, which weighed significantly on economic activity.
This year, the macroeconomic outlook will instead heavily depend on the rollout of the vaccine. Given the effectiveness of the currently available shots, around 75 percent of the population needs to be vaccinated to achieve herd immunity. At that point, restrictions can be lifted on a permanent basis, likely unlocking huge savings balances accumulated during the months of isolation.
