BERLIN (Reuters) – The development and domestic production of a breakthrough COVID-19 vaccine by German start-up BioNTech could boost economic growth in Europe’s largest economy by up to 0.5 percentage points this year, an economist said Tuesday.
The German economy is expected to grow by around 4% this year after a pandemic-related plunge of 4.6% last year. This means that BionTech and its breakthrough development of a coronavirus vaccine based on mRNA technology could account for around one-eighth of global GDP growth in 2021, according to estimates by Sebastian Dullien, head of the think tank at the Institute for Macroeconomic Policy (IMK).
“I can’t think of another example where a single company had such an impact on German GDP,” Dullien told Reuters.
A government official said it was absolutely plausible to assume that the BioNTech effect on overall economic growth would easily reach up to 0.5 percentage points this year.
Dullien said that as a macroeconomist he doesn’t normally look at individual companies. “Sometimes, however, there are rare cases in which individual companies have macroeconomic relevance. BioNTech is such a rare example,” Dullien said.
His calculations are based on BioNTech’s latest results released on Monday, which show the startup now expects to generate 15.9 billion euros ($18.63 billion) in vaccine revenue this year, up from an earlier estimate. of 12.4 billion euros.
That’s about 0.5% of German GDP, Dullien said. In 2020, Germany’s gross domestic product was around 3.3 trillion euros.
“Because BioNTech purchases relatively few preliminary products overseas, it is almost entirely domestic value-added,” Dullien said. “So it has a direct impact on economic growth.”
Unlike major German automakers who produce many vehicles outside the country, 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 secured the world’s first approval for a COVID-19 vaccine in late 2020. “BioNTech’s success is impressive,” Dullien said. “There is an excellent research landscape in Germany that has potential for the future.”
ING Bank economist Carsten Brzeski also said Dullien’s calculation was plausible, adding that BioNTech’s achievement was nothing short of extraordinary.
“There aren’t many companies that can go from zero to a hundred in just one year,” Brzeski said.
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Reporting by Michael Nienaber and René Wagner; edited by Jane Merriman, Kirsten Donovan