Daily new COVID-19 cases have been increasing in most regions, with the new Delta variant spreading much faster across unvaccinated populations and potentially transmitting through vaccinated populations. Responses to rising cases vary across the world; countries in Asia, such as China, Australia, and Thailand, have reintroduced some level of restrictions, but the US and the UK are continuing with their reopening plans. Meanwhile, some countries in Europe, such as France, have accelerated their implementation of COVID-19 passes for domestic activities. Daily case figures were stabilizing across Latin America, supported by fast vaccination programs; however, we expect them to accelerate as the Delta variant becomes more dominant. An uptick in cases is leading to temporary restrictions among some Sub-Saharan African countries, such as Ghana, Nigeria, and Zambia; however, the majority of the region continues with very light COVID-19 measures. MENA countries differ drastically in their response to the pandemic; Israel has approved the use of a third booster shot for vulnerable populations, the UAE has almost completed its vaccination program, and Saudi Arabia is mandating vaccination proof for many domestic activities, but many others in the region are keeping light COVID-19 measures despite the risks from the Delta variant.

Our View

High vaccination rates in the developed world, improving access to vaccines in some parts of the developing world, and vaccines’ ongoing relative effectiveness in limiting hospitalization rates support the outlook for H2. However, lack of hard evidence on vaccine effectiveness over time, ongoing difficulty in accessing vaccines in many places, vaccine hesitancy in others, and a much faster-spreading virus create the risk of targeted restrictions returning. In our monthly review of the vaccination pace and reopening timelines across the world, we’ve extended our timelines for reopening* in Thailand, Vietnam, Malaysia, Indonesia, and the Philippines in APAC; for Germany, France, Italy, Spain, and Greece in Europe; and called out some return of restrictions risk in Ukraine. We’ve revised our assumptions to reflect the faster spread of the Delta variant and the increasingly diverging levels of effectiveness across different vaccines. The world’s socioeconomic and mobility trends will continue to be heavily shaped by COVID-19 variants, as well as how governments choose to react based on their fiscal capacity and the political environment, creating some risks to normalization in economic activity and demand patterns expected for H2 2021. 

Business Implications

Demand patterns and customer behavior will continue to fluctuate in H2 2021. This will ensure inventory management and supply chain effectiveness, alongside demand forecasting, will remain key focus areas for executives. In the short term, maintaining scenarios and frequent updates from country-level teams will be critical for managing risks from the Delta variant, while also engaging in complex portfolio management, as countries increasingly diverge in their COVID-19 waves and policies.

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