BERLIN (Reuters) – Development and domestic production of breakthrough COVID-19 vaccine by German start-up BioNTech could boost economic growth in Europe’s largest economy by up to 0.5 percentage point this year, an economist said on Tuesday.
The German economy is expected to grow by around 4% this year after falling 4.6% linked to the pandemic last year. This means that BionTech and its breakthrough development of a coronavirus vaccine based on mRNA technology could account for about one-eighth of overall GDP growth in 2021, according to estimates by Sebastian Dullien, head of the think tank at the Macroeconomic Policy Institute (IMK).
“I can’t think of another example in which a single company had such an impact on German GDP,” Dullien told Reuters.
A government official said it was entirely plausible to assume that the BioNTech effect on overall economic growth would easily reach up to 0.5 percentage point this year.
Dullien said that as a macroeconomist he doesn’t normally look at individual companies. âSometimes, however, there are rare instances in which individual companies have macroeconomic relevance. BioNTech is such a rare example,â Dullien said.
Its calculations are based on the latest BioNTech results released on Monday, which showed the start-up now expects to generate â¬ 15.9 billion ($ 18.63 billion) in revenue from the vaccine this year, against a previous estimate of 12.4 billion euros.
This represents around 0.5% of German GDP, Dullien said. In 2020, Germany’s gross domestic product was around 3.3 trillion euros.
âAs BioNTech buys relatively few preliminary products from overseas, this is almost entirely domestic added value,â said Dullien. “So this has a direct impact on economic growth.”
Unlike the big German automakers who produce many vehicles abroad, BioNTech produces its vaccine at a plant in Marburg, western Germany. In addition, it receives license fees from its American partner Pfizer.
BioNTech and Pfizer obtained the world’s first approval for a COVID-19 vaccine at the end of 2020. âBioNTech’s success is impressive,â said Dullien. “There is an excellent research landscape in Germany which has potential for the future.”
ING Bank economist Carsten Brzeski also said Dullien’s calculation was plausible, adding that BioNTech’s success was simply extraordinary.
âThere aren’t a lot of companies that can go from zero to a hundred in a year,â Brzeski said.
($ 1 = â¬ 0.8536)
(Reporting by Michael Nienaber and Rene Wagner; editing by Jane Merriman, Kirsten Donovan)