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Mohamed Bardastani, CEMEA Economist and
Director of Business and Economic Insights, Visa

July 2021


4 - 5 Minutes

Vaccinations unlock potential spending boom

The race to vaccinations for COVID-19 was both a triumph for human ingenuity and the focus for hopes that more countries could open up and the global economy might return to closer-to-normal spending. Now, close to nine months after vaccines first started being administered outside clinical trials, some early signs of how the pace of vaccinations is affecting different economies are starting to emerge. At Visa, we examine below the links between vaccinations and spending in Central and Eastern Europe, Middle East and Africa (CEMEA), with particular focus on mobility, eating out, and zero in on the insights offered by affluent spending in the United Arab Emirates (UAE).

Are vaccinations the path to unleashing spending booms?

More than one billion people or, one in eight around the world, will soon have received at least one coronavirus vaccine dose at the current pace of inoculation.1 3.47 billion doses have been administered globally, and 29.22 million are now administered each day.2 Countries with higher vaccination rates have seen a swifter return of consumers to more social forms of consumption, such as restaurants.3

However, there is no uniform global vaccine rollout story or consumer recovery story, particularly in the vast region of CEMEA, where vaccine rollouts vary considerably across countries. Within CEMEA, the Gulf Cooperation Countries in general are among the ‘fast inoculators’ globally with high rates of vaccinations, while the progress of the vaccination programs in Africa has been unfortunately slow due to limited access to the vaccine.


"What we saw last year is that the economic fortunes of countries around CEMEA were closely correlated with the coronavirus case count in each country and the overall public health outcomes," Mohamed Bardastani, Economist and Director of Business and Economic Insight at Visa CEMEA says.

"In general, when the case count was high, there were more restrictions and social distancing measures in place, limiting people’s mobility to restaurants, retail shops, shopping malls and ‘high-contact’ sectors, where people are in close proximity to one another, and dampening overall consumer spending. In contrast, when the case count was low, the authorities gradually relaxed the restrictions, allowing for some level of recovery in mobility and spending.

"What we're seeing now is that, as vaccination programs continue to progress, people are regaining confidence in the economy and they are becoming more comfortable venturing out and spending on previously restricted activities. Countries do not need to wait until the ‘herd immunity’ threshold (estimated at around 70 percent of the population4) to reap the economic benefits of vaccinations; vaccinating as little as 30 percent of the population seems to unlock previously restrained household spending as we have seen in the U.S.5"

CEMEA mobility continues to recover from last year’s trough

Mobility across retail spaces and workplaces is accelerating as the vaccine rollout continues.6

However, we can see that the recovery is uneven due to the varying trajectory of coronavirus in each country. Among the large economies in CEMEA, the UAE and KSA show the strongest recoveries, thanks to their rapid vaccination programs.


"Vaccinations are also facilitating people’s return to the office, following last year’s dramatic and widespread adoption of the ‘work from home’ model as businesses were forced to close their offices amidst the height of the restrictions. Mobility to workplaces in key CEMEA countries remains below its pre-pandemic level but the gap has been largely closing as of June."

"The ‘back to the office’ period is also allowing for the return of some forms of spending that were dampened last year, such as grabbing coffee on work breaks, going to lunch or drinks with co-workers, and filling the gas tank on the way to work as opposed to working from home," says Bardastani.

Dining out is staging a global comeback, reflecting a shift in consumption back from goods to services with economic reopening

One key metric we at Visa have been keeping an eye on, that captures the dramatic inflection points of consumer confidence in the economy amidst the pandemic, has been consumer spending in restaurants. This metric reflects whether people are comfortable again and confident enough to return to ‘high-contact’ activities and more social forms of spending.

As COVID-19 vaccinations accelerate around the world, there is growing evidence consumers are reigniting their spending on discretionary goods and leisure, after the pandemic honed spending in on essential goods.7

This is particularly notable when looking at restaurant sales. Countries with higher vaccination rates have seen a swifter return of consumers to more social forms of consumption, such as restaurants.

"Restaurant spending in the UAE saw one of the swiftest returns globally to its pre-pandemic level, thanks to the government’s well-calibrated policy of fast economic re-opening, notably in the Emirate of Dubai, alongside strong enforcement of social distancing measures. Elsewhere in CEMEA, restaurant spending strengthened as consumers gained more confidence in the economy, such as in Russia, Saudi Arabia and Ukraine and by May this year was largely above its pre-pandemic level," says Bardastani.

Social distancing, whether voluntary or mandated, took a heavy toll on restaurants globally in 2020, as consumers moved away from restaurant dining to at-home eating.

Globally, countries further ahead in vaccinations have seen a stronger and swifter return of restaurant sales back to their pre-pandemic levels, as measured by the relative speed in which consumers have returned to their pre-pandemic habits of eating out.8

Restaurant transactions per consumer rapidly picked up once restaurants reopened – with further rises expected in the second half of this year as vaccinations bear fruit.9


UAE: a case study in reopening and recovering affluent spending

The UAE’s coronavirus strategy on social distancing has allowed for faster business reopening.


This has facilitated the overall recovery in consumer spending, as seen in this affluent spending chart.


"The fact that many businesses were allowed to resume operations quickly in the UAE translated into more rapid recovery in consumer spending, including for the more affluent consumers. Affluent spending is often associated with fine dining, spas, ‘staycations’ and so on – and these have been largely open in the UAE, notably in Dubai, with just a brief interruption last year. When we look at non-affluent spending, it remained quite resilient as well, especially on essentials such as groceries, pharmacies, etc. So overall, the country’s less restrictive policies facilitated the overall recovery in consumer spending," says Bardastani.

Uneven global economy recover continues


"In CEMEA, the key economies appear to be on a steady path of economic recovery," says Bardastani. "The latest PMI monthly surveys by IHS Markit for June, which gauge monthly economic development, suggest that the key CEMEA economies remain in expansionary mode in month-over-month basis, including in Saudi Arabia, the UAE, Russia, Nigeria and South Africa. As vaccinations pick up over the next few months around the region and start to bear fruit, consumer spending in CEMEA and the economic recovery will continue to gather pace."

All brand names, logos and/or trademarks are the property of their respective owners, are used for identification purposes only, and do not necessarily imply product endorsement or affiliation with Visa.

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