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Economic think tank predicts ‘robust’ 2021 for pharma sector
February 2, 2021
For many global economies, 2020 was largely disastrous.
While governments struggled to contend with the unforeseen challenges of a pandemic, economic turmoil ensued, and financial markets were severely weakened as manufacturing and consumer demand declined dramatically.
However, the recently published Annual Report by leading thinktank The Economist Intelligence Unit (EUI) has painted a much more settled financial picture for the next twelve months with pharma spending set to increase again.
While acknowledging that within some sectors recovery will merely be a bounce-back following a calamitous performance in 2020 and full recovery will not begin in earnest until at least 2022, this year will see many pharmaceutical interests grow once again.
Whilst relatively protected from last year’s downturn, thanks to additional funding to tackle COVID-19, healthcare still suffered with an estimated spending fall of 2.6 per cent.
However, the EUI report predicts marked growth in the months ahead with Europe faring best as governments continue to invest in healthcare in tandem with the mass roll-out of COVID vaccines.
Growth is also expected in Asia but there are warnings that recovery in the US may take longer following a period of political unrest and damage to non-COVID care there. Upturn will also be hampered in Latin America and other countries dependent on oil prices with the EUI predicting some may well have to wait until 2024 for their economies to get back to 2019 levels.
Although largely positive about the possibility for growth within the healthcare sector in 2021, the EUI report is resolute that much will depend on the pandemic and how governments attempt to deal with it in the coming months.
While 2020 relied on lockdowns and social distancing measures, this year will see a marked shift towards finding a permanent solution. At the fore of this will be vaccination programmes, some of which are already struggling to meet their projected immunisation rates with Israel and the UAE soaring ahead while Japan is only set to begin inoculations in late February.
Vaccination rates will be central to boosting local economies as life slowly returns to normal. However, most of the 7 billion doses being produced in 2021 have already been pre-ordered by the world’s wealthiest nations and with the additional costs of transportation, storage and distribution factored in, many poorer countries cannot afford large-scale immunisation schemes at this stage.
Instead, they will be reliant on COVAX, the international initiative that aims to secure 6 billion doses for poorer countries across the world. It promises that the first 2 billion of these will also be administered during 2021, mainly to healthcare workers.
Growth will be a feature of the months ahead and global GDP is predicted to increase by 4.5 per cent, the fastest growth on record since 1988. However, given the 4.4 per cent reduction experienced in 2020, the road to pre-coronavirus levels of economic prosperity will be a long one for many.
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