Executive
Perspectives

Navigating the Delta
Variant and the Future of
COVID-19
August 2021

OBJECTIVE: The highly transmissible Delta variant of COVID-19 has takenover as the dominant strain in many areas around the world. This document
aims to present key facts, dispel myths, and help leaders evaluate theirpolicies as the COVID-19 fight enters its next phase.

IN THIS DOCUMENT

While the Delta variant does have relatively higher antibody resistance than
the wild type1, vaccines are still proving to be highly effective in preventing
severe disease and limiting spread. Headlines often focus on breakthroughcases of COVID-19 among the vaccinated and concerns over waning immunity
among the elderly and vulnerable, but vaccines continue to be the best tool
for managing disease. They provide a promising path out of the pandemic.

VACCINATION IS CRUCIAL FOR LONG-TERM CONTAINMENT
Actions taken in the next year can dictate consequences in the longer term.
While the immediate ambition is to control the spread of the Delta variant,vaccination is essential to reduce the risk of dangerous future variants. Publichealth leaders must keep a global view in mind to prevent worldwide
resurgences. Across the public and private sectors, increasing numbers of
employers have implemented stronger measures to drive vaccination.
1. Original strain of COVID-19. Sources: BCG analysis and case experience.

1

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BCG Executive
Perspectives

VACCINES ARE EFFECTIVE AGAINST FAST-SPREADING DELTA

Increasing cases

Dominant variant

Global challenge

Infection danger

~650k

>90%

130+

2.5-3xNew global cases per day
and growing, which is~80% of peak cases

Of new cases are comingfrom the Delta variant
in most countries

Countries haveexperienced Delta
variant’s spread

Increasedtransmissibility of Delta
versus the original strain

Vaccine efficacy~25x

Reduction in severe cases after vaccination1, taking into account new variants such as Delta

1. Based on estimates from US CDC and Public Health England among vaccinated versus unvaccinated people. Reductions in hospitalization rates due to vaccination differ across age groups. For example, the reduction in
hospitalization rates for those aged 65+ is likely even greater than 25X, based on preliminary data from the US CDC. Sources: Our World in Data; Nextstrain; Public Health England; US CDC.

2

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Rapid global spread fuels concern for Delta variant; vaccines remain crucial

Global cases are rising, with the Delta variant proliferating and difficult questions resurfacing
Epidemic Progression

Daily new cases (7-day rolling average)

Delta’s spread, particularly
in Southeast Asia, North
America, and Europe, isdriving global increase

1,000,000

800,000

600,000

South
America
North
America

400,000

200,000

Asia1
AfricaSouth America
North
North America
America
Africa0
Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug

EuropeMonth-onmonth growth 215% 15% 50% 60% 10% 10% 40% 45% 10% 0% (35%) 20% 60% (15)% (55)% 30%
of new cases2
1. Includes Oceania (Australia, New Zealand, Papua New Guinea, and surrounding island nations of the Pacific ocean). 2. Calculated monthly as average of daily cases comparedwith previous month’s daily cases and rounded to nearest 5%. Sources: Johns Hopkins CSSE; Our World in Data; Worldometer; press search; BCG.

Leaders are reconsidering
key questions:• What is the employer’s rolein driving vaccinations?
• Should reopening or returnto office plans be delayed?
• What should the approach
be for safely gathering inpublic areas (e.g., masking,testing)?
• What public healthmeasures should schools
implement?
While the answers may varyin each situation andcountry, decisions should befact-based and risk-weighted
3

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As of 09 Aug 2021

Navigating the Delta Variant and the Future of COVID-19

Summary

Vaccines offer very strong protection against Delta, but that protection may decrease over
2 time depending on vaccine and individual context

1

DELTA VARIANT
FACT BASE AND
TRENDS3

As vaccination rates increase, hospitalizations will drop significantly even as the proportion of
breakthrough cases increases

4High community vaccine protection helps lower risk of Delta variant across all age groups

5 Vaccines decrease Delta’s transmissibility by shortening contagious period in breakthrough cases

2

IMMEDIATEIMPLICATIONSFOR LEADERS

3

LONGER-TERM
SCENARIOS

1

Public health: Accelerate efforts to expand vaccination within and across countries

2

Private sector: Require employee vaccinations as much as possible; trending to stronger mandates

1 Increasingly dangerous variants may surface in the future among unvaccinated populations
2 Long-term course of pandemic depends on actions in the next year–crucial to act now

Sources: Nextstrain; US CDC; Nature; BCG analysis and case experience.

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1 The Delta variant has become the predominant variant due to its very high transmissibility

BCG Executive
Perspectives

Delta variant fact base and trends
Immediate and longer-term implications for leaders

AGENDAUPDATED ANALYSES AND IMPACT
Epidemic progression and virus monitoring
Economic and business impact

5

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DELTA VARIANT AND THE FUTURE OF
COVID-19: TRENDS AND ACTIONS

Delta variant has become the leading
variant globally (%)

Delta has become a prominent concern in many
countries because of its high transmissibility

As of July 28, 2021

First identified in India but already present in 130+ countries and accounts
for >90% of new cases in many countries

100
80

20A

Frequency of the Delta variant in new cases through July 30, 2021
1.0

60
40

20B

21A (Delta)

0.0
Feb 2021

Jul-21

Jun-21

May-21

Apr-21

Mar-21

Feb-21

Jan-21

Dec-20Nov-20Octr-20

Aug-20

Sep-2020
00.5

20H (Beta, V2)

21C (Epsilon)

21H

20B

20I (Alpha, V1)

21D (Eta)

19A

20D

20J (Gamma V3)

21E (Theta)

19B

20E (EU1)

21A (Delta)

21F (Iota)

20A

20G

21B (Kappa)

21G (Lambda)

20C

20F

UK

US

India

SingaporeMar 2021

Apr 2021

May 2021

Jun 2021

Jul 2021

Highest transmissibility (2.5-3x wild type) of all variants combinedwith shorter incubation period1 (3-5 days vs. 5-8 days for wild type)allows Delta to spread very quickly. Each Delta infection spreads to 6-7
other people on average compared with only 2 others for wild type2
3-6x antibody resistance compared with Alpha/wild strain3
Potential for higher severity4

1. Period of time before virus is detectable. 2. Comparison for spread assumes unvaccinated individuals. 3. As measured by reduction in the binding efficiency of neutralizing antibodies. 4. Severity determines COVID-19 hospitalizations anddeaths. Sources: Nextstrain; CoVariants; US CDC; Nature, Reduced sensitivity of SARS-CoV-2 variant Delta to antibody neutralization (July 2021); Lancet, SARS-CoV-2 Delta VOC in Scotland: demographics, risk of hospital admission, and vaccine
effectiveness (June 2021); press search; BCG analysis.

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The Delta variant has become the predominant variant due
to its very high transmissibility

1.1

Vaccines offer very strong protection against Delta, but that protection may
decrease over time depending on vaccine and individual context

The level of protection from antibodies1 may decrease overtime, eventually protecting against only severe disease …

… however, this varies byvaccine and individualProtection stems fromhigh count of
neutralizing
antibodies that havehigh stickiness tothe virus variant
Vaccination often
starts withprotection from alldisease, including
asymptomatic, but
may wane over time

LOWER

Asymptomatic disease
Vaccine protects against
asymptomatic infection andtransmission
Symptomatic disease
Vaccine protects against
symptomatic disease; possible to be
asymptomatic and transmissible

HIGHER

Severe disease
Vaccine protects against
hospitalizations and death

OVER TIME OVERALL PROTECTION DECREASESCHANCE OF PROTECTION FROM…

1. Antibody protection is just one of the immune responses but is also the most measurable.
Sources: WHO; US CDC; Nature, Neutralizing antibody levels are highly predictive of immune protection from symptomatic SARS-CoV-2 infection (May 2021); press search.

6 months later, some vaccine types
continue to show high antibody
counts, while others have fallen
significantly, raising efficacy concerns
People with autoimmune`
conditions and theelderly areexperiencing the fastest antibody
losses over time and may needbooster shots the most to increase
antibodies

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1.2

As vaccination rates increase, hospitalizations will drop significantly
even as the proportion of breakthrough cases increases

25x reduction in hospitalizations
for fully vaccinated people

Vaccines reduce overall hospitalizations in a
population despite more breakthrough cases
Illustrative example–2M population1

Weekly COVID-19 incidence per 100K (US CDC data)
August 2 - August 8, 2021

~25x
40.0

40

20.0

0.0

Likely evengreater
reduction in
hospitalization
rates for fully
vaccinatedpeople ages 65+
compared tounvaccinated 65+

1.5
Hospitalization incidence1
Fully vaccinatedAs more people get
vaccinated, overall
hospitalizations
will decrease due
to vaccine
protection. Withfewer remaining
unvaccinatedpeople, a larger
proportion of
hospitalizations will
come frombreakthroughvaccinated cases

Scenario A - 50% vaccinatedWeekly hospitalizations: 415

4%
Increasing vaccination rate can move Scenario A to B

Scenario B - 90% vaccinatedWeekly hospitalizations: 107

Unvaccinated

1. Hospitalization rates remain constant in both scenarios and are based on actual US
hospitalization data (on left). Sources: US CDC COVID Data Tracker; BCG analysis.

Proportion of
hospitalized thatare vaccinated

Proportion of
hospitalized thatare vaccinated25%= 10 vaccinated hospitalizations= 10 unvaccinated hospitalizations

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1.3

High community vaccine protection helps lower risk of Delta variant
across all age groups
New weekly hospital admissions per 100k (US CDC data)
Average August 9th - August 15th, 2021
Top 12 vaccinated states1
Bottom 12 vaccinated states1

86.1

US COVID-19 winter hospitalization rate2
US peak flu hospitalization rate3
US automotive accident hospitalization rate4

64.1

29.7

1.2
Ages
Fully
vaccinated

6.3

0-18
16%5 6%5

20.9

Despite low youth vaccination rates across thecountry, states with higher overall vaccination
rates and thus greater community protection
are seeing youth hospitalizations well below
peak flu season levels
As Delta spreads in US, states with highest
vaccination levels have seen lessened
impact of Delta wave to date. Additionally,
Pfizer's vaccine was >97% effective against`
symptomatic diseasein youth trials5,
implying significant benefit for younger
people to get vaccinated when eligible

12.0

7.2
19-49

50-64

67% 42%

65+
90% 79%

1. Measured by fully vaccinated %. Top States (56.8%-67.0% fully vaccinated), in order: VT, MA, ME, CT, RI, MD, NJ, NH, WA, NY, NM, OR,
Bottom States (35.4%-41.6% fully vaccinated), in order: AL, MS, WY, ID, LA, AR, WV, GA, TN, ND, OK, SC. 2. Based on 6 weeks
hospitalizations from Dec 21, 2020 to Jan 31, 2021. 3. Estimated based on 2018-2019 data when only 49.2% of people got flu vaccines. 4.
Based on 2018 emergency department visit rates for motor vehicles 5. Percent of total population 0-18 though only 12-18 is eligible in US. 5.
For ages 12-17. Sources: US CDC Covid Data Tracker; Mayo Clinic Vaccine Tracker; US Census estimates 2019; CDC Flu Burden 2018-19;
National Center for Health Statistics; BCG US Vaccine Sentiment Survey (May 2021)

Headlines focus on rising youth hospitalizations, but
protecting children and the vulnerable varies by local
context. Clarifying perceived versus actual risks is critical topainting a holistic picture (e.g., >30% of vaccinated adults
continue to perceive outsized COVID-19 risk, even as actual
risk is lower in many communities)
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1.4

Vaccines decrease Delta’s transmissibility by shortening
contagious period in breakthrough cases

Vaccines help reduce transmission of both
symptomatic and asymptomatic cases
As of August 2, 2021

3x
8xReduction in asymptomatic cases
for vaccinated versus unvaccinatedbased on a UK study

Reduction in symptomatic cases for
vaccinated versus unvaccinated basedon a US study

3x figure can also be attributed to the different vaccine mix in
UK (which includes Oxford/AstraZeneca vaccine), but vaccines still
offered high immunity by protecting against asymptomatic
Delta cases

Vaccine decreases transmission
by reducing infectious time
Delta appears to carry similar
viral load in vaccinated andunvaccinated cases at time ofdiagnosis, a departure fromprevious variants where vaccinatedpeople had lower viral loads…
`…But vaccinated case viralloads decrease much fasterthan unvaccinated case viralloads do (~10-14 days shorter
infectious period), reducing
possible infectious time forbreakthrough cases1

1. July 31, 2021 study based in Singapore looking at breakthrough cases compared with unvaccinated cases. Ct threshold of 35 was around day 10-12 for vaccinated and day 22-24 for unvaccinated.
Sources: US CDC COVID Data Tracker; Imperial College London.

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1.5

The Delta variant continues to make news, but vaccination within andacross countries remains an important lever to control against impacts
As of 13 August 2021

Delta variant is ravaging the world, but
it is pushing Southeast Asia to
breaking point
July 22, 2021

Why COVID-19 vaccines work wellagainst Delta variant

July 13, 2021

Europe struggles to break free of
COVID-19 restrictions as Delta
variant surges

August 3, 2021

Delta variant slams US youth who are
vaccine hesitant, spreading throughunvaccinated segments quickly

August 5, 2021

August 13, 2021

The Delta variant is slowing officereopenings. It could slow the economic
recovery too

The US FDA authorized a third dose of
COVID-19 vaccines for
immunocompromised people

August 4, 2021

Delta variant widens gulf between ‘Two
Americas’: vaccinated andunvaccinatedAugust 4, 2021

WHO head seeks vaccine booster
moratorium to ensure doses areavailable for low-income countries
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August 5, 2021

Public health: To combat Delta variant, need to increase
efforts to expand vaccination within and across countries
Public health leaders should look for ways to rapidly expand vaccination
EXPAND ELIGIBILITYPROVIDE UPDATED EDUCATION

Regulators should assess necessity of emergency
authorization to expand eligibility as safely andquickly as possible (e.g., ages <12, boosters, etc.)

Provide ongoing communication of vaccines'
importance, even with breakthrough cases, tokeep statistics in perspective

GAIN AUTHORIZATIONENCOURAGE DISCUSSION

Dedicate sufficient resources to review vaccine
applications beyond emergency use. 1/31 of
unvaccinated awaiting full approval and more data

Encourage people to speak to friends, family,
and doctors. 1/41 got vaccinated after seeing
others close to them do so

Push for redistribution through COVAX and support throughput for LMICs2
SUPPORT COVAX TO ENSURE SUPPLYCOLLABORATE TO DELIVER TO LMICs2

COVAX shipped ~177M doses of COVID-19
vaccines to 138 nations by beginning of AugustHigher-income nations and manufacturers shouldcollaborate to develop a global donation schedule,
incorporating excess doses

610M+ more doses have been announced for
donation from the EU, US, UK, Japan, andothers through 2022

Other publichealth measures:
While vaccination is theprimary lever to end
the pandemic, otherpublic health measures(e.g., masking,distancing) should not
be released until
vaccination rates are
sufficiently high. This isespecially important for
health departments incountries early in thevaccination journey

Establish funding and logistics support to help build
infrastructure to deliver and administer doses

1. Kaiser Family Foundation US COVID-19 Monthly Vaccine Monitor (July 13, 2021). 2. Low-to-middle income countries, defined by the World Bank as countries with GNI per capita below$12,695 (July 2021). Sources: KFF; STAT; press search; BCG analysis.

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Redistribute vaccines
across countries

Expand vaccination
within countries

2.1

Private sector: Require employee vaccinations as muchas possible; leaders moving to stronger mandates

Spectrum of employer vaccination programs

Employer vaccination efforts range from honor codes to hard mandates
HONOR CODE
Requests disclosure but no proof

VACCINATE OR TEST
Requires vaccination or weekly testing

HARD MANDATES
Requires proof of vaccination

Financial institution requires
masking for all unvaccinatedpeople to enter office, althoughproof of vaccination is not
required

All US federal employees must be
vaccinated or submit toregular testing, distancing,masking, and travel restrictions

Media company requires
vaccination proof for return-tooffice as “condition of
employment”
STRENGTH OF MANDATE

Trend is moving toward stronger mandates

As Delta variant proliferates, employers are reaching an inflection point andincreasingly requiring employee vaccination, shifting to the right of this spectrum
May 2021~10-15%

July 2021~30%+

Percentage of employers requiring employee vaccination
has increased in past few months, showing lower
tolerance of risk amid Delta variant surges

Increasingly serious
about vaccines:
Since the US federal
government enacted a
test or vaccinate
approach for staff,
others have followed
suit or even passed
hard mandates
Examples include
companies acrossindustries, such as
Google, Uber, Disney,
Walmart, McDonald’s,United Airlines, Tyson
Foods, BlackRock,Kaiser Permanente,
and others

While companies initially relied on the honor code, they are increasingly asking for continual regulartesting or proof of vaccination to return to office. Employers should make ongoing risk/safetyassessments and ensure employees have ability (e.g., time off ) to vaccinate
Sources: HBR; employer surveys; press search; BCG analysis.

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2.2

Vaccination is critical for longer-term disease management; if large partsof global population remain unvaccinated, dangerous variants may surface
Variants of concern compared with wild type
Evolutionary pressure could push
future variants "northeast"1

Relative antibody resistance

Variants of concern

10.0x

Future variants may potentiallybe more dangerous

Beta B.1.351

EpsilonVaccination prevents
future variants

Delta 2 B.1.617

B.1.427/B.1.429

Gamma P.1

Large populations` ofunvaccinated people allow
COVID-19 to evolve variations thatlikely have higher transmissibility

Alpha B.1.1.7
1.0x

Wild type

Likely range

1.5x

2.0x

2.5x

Given evolutionary selection
pressures, future variants are likely
to become more transmissible
and could also have higher
antibody resistance

3.0x

Relative transmissibility

1. Antibody resistance and transmissibility of the Lambda variant, which may be an emerging variant of concern, are currently being assessed.
2. Preliminary evidence shows that the "Delta Plus" variant, which is a version of the Delta variant with further mutations, has similar antibody
resistance and transmissibility as Delta variant. Sources: US CDC; cov-lineages.org; Lancet Infectious Diseases; press search; bioRxiv; Axios
variant tracker; Nature; BCG analysis

In vaccinated populations, only
mutations with increased
antibody resistance can survive,
but virus is likely to mutate andspread much more slowly than inunvaccinated populations

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3.1

3.2
A

Long-term course of pandemic depends on actions in the next year; failure
to “get ahead” of virus can lead to severe consequences for years to comeON TRACK TO “NORMAL”
BULL CASE

2-SPEED RECOVERYBASE CASE

ONGOING CHALLENGES
BEAR CASE

Vaccine redistribution covers world
population, including all lowerincome countries and populations

Gaps in vaccine availability for lowerincome countries or populations,
whether in supply or throughput

No major throughput issues

Moderate risk for new variants

Severe issues in vaccine coverage forlower-income countries or populations,leading to high risk of dangerous
variants emerging

Vaccine uptake /population immunity
by 20221

High vaccination uptake (70-80%+) toreach high population immunity levels
worldwide

Vaccination rates stagnate in the~50-70% range, leaving room for
greater risk of resurgence

Global vaccination rates are <50%,
creating high risk to longer-term
management of disease

Vaccine effectivenessCurrent vaccines with boosters
remain highly effective inpreventing severe disease. Vaccines
can “stay ahead” of disease

Certain emerging variants show highlevels of escape immunity; moredevelopments in vaccines areneeded, but situation is manageable

Existing vaccines not effective
against emerging variants; significant
costs needed to keep developing
next-gen vaccines

Existing problematic variants (e.g.,
Delta, Beta) can be contained andemerging variants can be managed

Disease is controlled in higherincome nations, but lower-income
nations face more severe impacts

Continuing rise of additional
challenging variants and responseis always “behind” virus

Disease burden will be like flu

Extended economic/health impacts

Profound economic/health impacts

CRITICAL FACTORSSupply and throughput
to cover vulnerable

LIKELY OUTCOMES
Resulting variant
development andrecovery path

1. Ranges per case are directional and based on vaccination rates across countries.
Source: BCG analysis and case experience.

15

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Bull, base, and bear case scenarios

Longer-term global recovery scenarios

Summary | Increasing vaccination rates require coordinated global efforts

Vaccination process flow

EffectivenessContinue investment invaccine R&D to expand
eligibility and combat
variant proliferation

UptakeProvide ongoing education
to reduce vaccine
hesitancy; reconsider
policies to increase uptake

Source: BCG.

SupplyDonate excess doses to lowerincome nations continuously;
continue to monitor and reduce
vaccine deserts within countries

Throughput
Provide support for distribution
and administration resources inareas of need; work with globalorganizations such as COVAX

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3.2
BBCG Executive
Perspectives

Delta variant fact base and trends
Immediate and longer-term implications for leaders

AGENDAUPDATED ANALYSES AND IMPACT
Epidemic progression and virus monitoring
Economic and business impact

17

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DELTA VARIANT AND THE FUTURE OF
COVID-19: TRENDS AND ACTIONSSummary dashboard
As of 12 August 2021

Epidemic Progression

Consumer Activity

Business Impact

Global epidemic snapshot

Mobility

Stock market performance

204M

16.5M

4.3M

4.5B

# of
cases

# of
active cases1# offatalities

Vaccine doses
administered

Month-onmonth
growth of
new cases2

Apr

May

Jun

Jul

Americas

1.2x

0.8x

1.0x

0.9x

Europe

0.9x

0.5x

0.6x

2.5x

Asia3

3.3x

1.0x

0.4x

1.3x

Economic Impact
IMF4 (Jul '21)

GDP forecasts (YoY%)
2021
Europe
US
Japan
China
India

0 2

4 6
4.6%

Banks58 10 12 14 16 18 20

7.0%
2.8%
8.1%
9.5%

Mobility6(month vs.
Jan '20)

Domestic air
travel tickets
booking7,8 (YoY)

Apr

May

Jun

US

-15%

-12%

-11%

Europe

-25%

--17%

Japan

-12%

--16%

US

189%

129%

UK

181%

276%

China

157%

76%

02 Jan '20 vs Month end

Apr

May

Jun

S&P500

28%

29%

32%

-7%

FTSE100

-8%

-8%

-7%

-11%

CHN SSE

12%

17%

16%

Volatility Index (S&P500)13

1.5x

1.3x

1.3x

US

42%

47%

37%

France

79%

54%

China

35%

36%

34%

US

61

62

62

Germany

66

64

65

China

51

51

51

Steel production (YoY)16

25%

17%

12%

International trade
Trade value14
(YoY)

Sales
Retailgoods sales9(excl. auto &
fuel, YoY)

US

40%

24%

Europe10

21%

8%

5%

China11

18%

12%

12%

Passenger
vehiclesales12(YoY)

US

113%

43%

17%

Germany

90%

37%

24%

China

9%

-3%

-14%

Industrial production
Purchasing
manager’s
index15(base = 50)

1. Total cases less deaths and recovery; 2. Calculated as monthly average of daily cases vs. previous month; 3. Includes Middle East and Oceania; 4. IMF Apr 2021 forecast; 5. For India, forecast is for financial year; for others, it is for calendar year; YoY forecasts; range from forecasts (where available) of World Bank, International Monetary Fund, JP Morgan Chase; Morgan Stanley; Bank of America;
Fitch Solutions; Credit Suisse; Danske Bank; ING Group; HSBC; As of reports dated 08 June 2020 to Mar 01 2021; For India's GDP forecast, World Bank's 2020 forecast from 08 June provides the upper bound of the forecast range; 6. Mobility values are calculated as the average of mean monthly mobilities in workplace, public transit, retail & recreation, and grocery & pharmacy and compared to abaseline from 03 Jan – 06 Feb 2020; Europe mobility values are calculated as the average of Germany, France, UK, Spain, and Italy; 7. Calculated as change in last 14 days rolling average value as compared to same period last year; 8. Domestic tickets by ticketing; 9. Retail goods sales include online & offline sales and comprise food & beverages, apparel, cosmetics & personal care, home
appliances, general merchandise, building material; do not include auto, fuel & food services; 10. Europe includes 27 countries currently in EU; 11. For China, Jan & Feb are reported together due to National Holidays. 12. Figures represent passenger vehicle (including sedan, hatchback, SUV, MPV, van and pickup) sales data for over same month in previous year; Europe value calculated as
cumulative sales in Germany, France, UK, Spain, and Italy; 13. Underlying data is from Chicago Board Options Exchange Volatility Index (VIX); Volatility Index is a real-time market index that represents the market's expectation of 30-day forward-looking volatility and provides a measure of market risk and investors' sentiments; 14. Calculated as sum of imports and exports, measured in USD andcompared to previous year period; EU trade values between EU and all outside countries 15. PMI (Purchasing Manager's Index) is a diffusion index that summarizes whether market conditions, as viewed by purchasing managers, are expanding (>50), staying the same (50), or contracting (<50); 16. Data corresponds to G-20 countries (minus Indonesia). Sources: JHU CSSE, Our World in Data, WHO,
World Bank, IMF, Bloomberg, Google Mobility, US Census Bureau, Eurostat, PRC National Bureau of Statistics, ACEA actuals, Marklines, ARC ticketing data, STR, Statista, CBOE, OECD, BEA, GACC (customs) China, ONS, BCG.

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To be updated in forthcoming editions

COVID-19 has broad geographic reach today with countries
at different stages in their fightNon-exhaustive

Continuation

Resurgence

Curve was never quite flattened; ongoing battle

Curve was flattened but saw one or more resurgences

Daily new confirmed cases per million1

Daily new confirmed cases per million1

1,000

500

0
Mar
20

Jun
20

Oct
20
Argentina

Brazil

Feb
21
UAE

Jun
21

Mar
20

Jun
20
France

Oct
20
Switzerland

Feb
21
Germany

Crush and contain

VaccinatedCurve was flattened; some countries’ cases rising with Delta
but much lower relative to other parts of world

Curve reduced through vaccination progress

Daily new confirmed cases per million1

Daily new confirmed cases per million1

Jun
21
Spain

Uptick in cases as mostinfectious Delta variant
becomes dominant

1,000

500

0
Mar
20

Jun
20
Australia

Oct
20
Singapore

1. Data shown as 7-day rolling average of daily new cases per million.
Sources: Our World in Data; BCG.

Japan

Feb
21
South Korea

Jun
21

Mar
20

Jun
20

Oct
20
US

UK

Feb
21
IsraelJun
21

19

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 17 August 2021 Version 2.0

Epidemic Progression

As of 09 Aug 2021

Many large economies expected to continue recovery
and reach 2019 GDP levels between 2021 and 2022
Economic Impact

As of 12 Aug 2021

GDP forecast levels indexed to 2019 value (Base: 100)
Europe

China

121.0

113.0

112

117.0

108
104.0
103.3
103.1

100

103.8
101.0
98.6
97.8
97.3
96.9

96.5

107.9
105.6

105.1

100.9
100.6

101.5
100.4
99.2

103.2

102.3

102.0
101.6

98.9

96

110.1

108.5

108.3
107.4

104

113.5

111.0
110.6

110.3

99.8

99.1
98.1
98.0
97.0

98.1

95.3

93.5
93.4

92

2021 forecast
vs. 2019

India1

117.0

116

88

Japan

2019

2020

2021

2022

2019

2020

92.7

2021

99-104%97-99%

2019 GDP levels (index)

Forecast IMF (Jul 2021)

2022

2019

2020

2021

2022

2019

108-113%
Forecast World Bank (Jun 2, 2021)

2020

2021

2022

2019

97-99%

2020

2021

2022

99-105%

Forecast range from leading banks2

Note: As of reports dated 08 June 2020 to 01 Mar 2021; YoY forecasted 2020 values are estimated actual GDP. 1. For India, forecast is for financial year; for other countries, the forecast is for calendar year. 2. Range
from forecasts (where available) of JPMorgan Chase; Morgan Stanley; Bank of America; Fitch Solutions; Credit Suisse; Danske Bank; ING Group; HSBC. Sources: Bloomberg; World Bank; IMF; BCG.

20

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 17 August 2021 Version 2.0

USRetail and recreation mobility recovered fastest; public transit andworkplace mobility remains lower in most countries
Economic Impact

As of 09 August 2021

Workplace1, public transit2, and retail and recreation3 mobility compared with baseline of January 2020 to February 2020

Feb
20

Germany

May
20

Aug
20

Oct
20

Jan
21

Apr
21

Jul
21

Feb

May
20

Australia

Aug
20

Oct
20

Jan
21

Apr
21

Jul
21

Italy

Feb
20

Workplace mobility
Retail and recreation

Lockdown easing4
Lockdown started4

Feb
20

May
20

Aug
20

Oct
20

Jan
21

Apr
21

Jul
21

May
20

Aug
20

Oct
20

Jan
21

Apr
21

Jul
21

May
20

Aug
20

Oct
20

Jan
21

Apr
21

Jul
21

South Korea

May
20

Aug
20

Oct
20

Jan
21

Apr
21

Jul
21

SwedenPublic transit mobility

Feb
20

May
20

Feb
20

Japan

Aug
20

Oct
20

Jan
21

Apr
21

Jul
21

Feb
20

1. Tracked as changes in visits to workplaces 2. Tracked as changes in visits to public transport hubs, such as underground, bus and train stations. 3. Tracked as changes for restaurants, cafés, shopping centers, theme parks,
museums, libraries, and cinemas. 4. Refers to average lockdown start and easing dates for larger lockdowns. Note: Data taken as weekly average compared with baseline (average of all daily values of respective weeks during
Feb 15 2020–Feb 28 2021). Sources: Google LLC “Google COVID-19 Community Mobility Reports.” https://www.google.com/covid19/mobility/. Accessed: 01 Mar 2020; press search; BCG.

21

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 17 August 2021 Version 2.0

USManufacturing PMI global recovery indicates continued
positive momentum
Economic Impact

As of 09 Aug 2021

Manufacturing PMI before, during, and after the crisis

11 12 127 7 9 9 91 3 3 313

Neutrallevel = 50

017 16 14 15 16

2 2

2 1
1 1 1 1 1

2

1

1 1 1

1

0

Jun

July

Apr

May

Mar

Jan

Feb

Dec

Oct

Nov

Sep

Aug

July

Apr

Jun

Jun

July

May

Apr

Feb

Mar

Jan

Dec

Nov

Oct

-2 0
Sep

Jun

July

May

Apr

5 5 5 4 4 3

Japan
4 3 2 3
1 3

0

July

Jun

May

Apr

Feb

Mar

Dec

Nov

Oct

1. Lockdown dates are pertaining only to Hubei province. Note: PMI (Purchasing Manager’s Index) is a diffusion index that summarizes whether market conditions, as viewed by purchasing managers, are expanding,staying the same, or contracting. 50 is neutral, >50 is considered to be positive sentiment, and <50 is considered to be negative sentiment. Sources: Markit South Korea Manufacturing PMI SA; Jibun Bank Japan
Manufacturing PMI SA; China Manufacturing PMI SA; Swedbank Sweden PMI SA; Markit/BME Germany Manufacturing PMI SA; Markit Italy Manufacturing PMI SA; Markit US Manufacturing PMI SA; EIKON.

Jan

-0
.2

-2 -1 -1

Sep

Aug

Jun

-5 -3
July

-8 -10
-12
May

Mar

Jun

July

May

Apr

Mar

Feb

Jan

Dec

Oct

Nov

Sep

Aug

-2
Jun

Neutrallevel = 50
-5

July

May

Apr

-7 -10-13

15 13 12 14 19 16 15 15Apr

6 9 10
2 4

Mar

Lockdown easing

Mar

Jun

July

May

Apr

Mar

Feb

Jan

Dec

Oct

Nov

Sep

Aug

Jun

July

May

-19

Neutrallevel = 50
>0

1 3 3 3
-6 -8 -9 -7 -3

Sweden-14 to 0

Neutrallevel = 50

-5 -3
Apr

Mar

12 12 10Aug

7 10 112 3 3 4 2 3 5-10-29 to -15

MaySouth Korea

Neutrallevel = 50

Lockdown started

2

Mar

Jun

Italy

≤ -30

Neutrallevel = 50

July

Apr

May

Mar

Jan

Feb

Dec

Oct

Nov

Sep

Aug

Jun

July

Mar

Jun

July

Apr

May

Feb

Mar

Jan

Dec

Oct

Nov

Sep

Aug

Jun

July

Apr

May

Mar

11
6 8 8 8 7-5-5
-16 -13-14 -10

Apr

-2

1 2

May

Neutrallevel = 50

22

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 17 August 2021 Version 2.0

China1

Germany

USMonthly passenger vehicle sales starting to return to prepandemic levels but are also capped by supply constraints
Economic Impact

As of 09 August 2021

Monthly passenger vehicle1 sales, % change vs. same month in 2019
China2
10%

14%
2%

Italy

1%

June

3%

-4%

June

-9%
Apr

Mar

Feb

May

7%

-7%
June

-25%

Apr

Mar

Feb

Jan

June

May

Apr

-31%
Apr

Mar

-2%
Feb

Lockdown easing

-2%

-3%

Japan

63%

Jan

Lockdown started

> 0%

5%

-26

8%
-14% to 0%

2%

9%

May

-12%

-15%

2%

Jan

Sweden

-11%

Mar

-18%
Feb

Jan

-18%

-29% to -15%

June

South Korea3
6%≤ -30%

-6%
May

-4%
Apr

-5%

Mar

Jan

June

-31%

Feb

-16%

May

-26%
Apr

Mar

-28%
Feb

-36%
Jan

June

May

Apr

-14%
Mar

-5%
Feb

Jan

-2%

-15%

0%

-1%

8%

1. Passenger vehicle sales includes data on, where available, hatchback, MPV, pickup, sedan, SUV, mini trucks, light trucks, and vans. 2. Stimulus policies: Launched subsidies for car purchases in 10 cities, lessened purchase restriction in high-tiercities, and extended NEV subsidies. 3. South Korea's growth in auto sales from Mar through June 2020 is supported by recent tax cuts for individual consumption goods (e.g., cars), several carmakers (e.g. Audi, VW) launching new models, and theincreased appreciation by the Koreans of cars as a safe mode of transport and as a travel alternative for camping during COVID-19, supported by recently passed legislation to allow a variety of different cars to be modified into “camping cars.”
Sources: Marklines; BCG.

23

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 17 August 2021 Version 2.0

GermanyMay

USRetail goods sales (excluding auto and fuel) have grown comparedwith pre-COVID-19 levels in most countries
Economic Impact

As of 12 Aug 2021

Retail goods sales include online and offline sales and comprise food and beverages, apparel, cosmetics andpersonal care, home appliances, general merchandise, building material; do not include auto, fuel, and food services

Jan '21

Feb '21

Mar '21

Apr '21

May '21

Jun '21

US

14%

11%

21%

20%

19%

-

UK2

-2%

-1%

3%

13%

12%

11%

Spain

-6%

-3%

-1%

-2%

-3%

-2%

Sweden

6%

9%

10%

5%

12%

11%

France

7%

7%

9%

0%

8%

8%

11%

7%

9%

12%

5%

2%

2%

5%

6%

China3
Japan

3%

7%

-29% to -15%

-14% to 0%> 0%

1. Retail goods sales categorization may be different across countries; seasonally adjusted values taken; country-specific categorization. 2. UK figures include total retail sales
excluding automotive fuels, sourced from Office for National Statistics United Kingdom as data is no longer reported in Eurostat after Brexit. 3. For China, Jan & Feb 2021 arereported together due to national holidays.
Sources: US Census Bureau; PRC National Bureau of Statistics; Eurostat; Office for National Statistics United Kingdom; Ministry of Economy Japan.

Retail goods sales haverebounded with growth
above 2019 levels, potentiallysignifying effects of pent-up
demandUS has seen strongest
growth relative to 2019, butother countries have also
started seeing double-digit
percentage growthSome European countries
have seen retail sales dips inearly 2021 coinciding withincreased cases andlockdowns
24

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 17 August 2021 Version 2.0

Growth of retail goods sales (excluding auto and fuel)1, % change vs. same month in 2019

DE-AVERAGED VIEW

Retail store sales in China and US have rebounded across
categories; apparel sales continue to be impacted in other countries
As of 12 Aug 2021

Economic Impact

Food and beverage stores

Personal care and cosmetics stores

Jan '21

Feb '21

Mar '21

Apr '21

May '21

Jun '21

US

14%

16%

14%

15%

16%

-

UK

7%

9%

10%

10%

4%

Spain

3%

1%

0%

0%

Sweden3%

4%

4%France7%6%China1

14%

Japan

-2%

-1%

Jan '21

Feb '21

Mar '21

Apr '21

May '21

Jun '21

US

5%

3%

12%

14%

15%

-

8%

UK2

-47%

-30%

-26%

-6%

-7%

-7%

-3%

-1%

Spain

-4%

-1%

0%

1%

-1%

2%

0%

5%

6%

Sweden

0%

7%

12%

4%

10%

13%

10%

8%

8%

5%

France

8%

5%

11%

7%

10%

-

23%

20%

18%

23%

China1

31%

30%

36%

43%

-3%

-2%

0%

1%

Japan

45%

42%

38%

46%

Apparel stores3

Feb '21

Mar '21

Apr '21

May '21

Jun '21

US

-1%

-6%

10%

13%

8%

-

-6%

UK

-12%

13%

-9%

30%

30%

20%

-21%

-13%

Spain

-4%

-1%

9%

7%

17%

9%

-27%

-15%

-8%

Sweden

21%

23%

26%

18%

27%

24%

-24%

-63%

-17%

-

France

15%

17%

20%

4%

11%

-

4%

3%

8%

8%

China1

-5%

-7%

3%

15%

-19%

-30%

-29%

-23%

Japan

1%

5%

11%

1%

Mar '21

Apr '21

May '21

Jun '21

US

-3%

-8%

12%

10%

13%

-

UK

-46%

-52%

-44%

-5%

-2%

Spain

-36%

-35%

-21%

-23%

Sweden

-24%

-22%

-19%

France

-25%

-22%

Japan
≤ -30%-24%-26%-29% to -15%

45%

Jan '21

Feb '21-3%

44%

Home appliance stores4

Jan '21

China1

24%-14% to 0%

-5%
19%

17%

> 0%

1. For China, Jan & Feb 2021 are reported together due to national holidays; food & beverages category includes only food & grains; 2. UK data set switched over from Eurostat to
Office for National Statistics following Brexit. 3. Includes clothing accessories, shoes, etc. 4. Includes audio video & home appliances stores. Note: For US, share in retail store
sales in Q4 2019: F&B ~25%, personal care & cosmetics ~12%, apparel ~6%, home appliances ~3%, general merchandising ~25%, and building material & gardening equipment~13%. Sector classification and mix may be different across countries. Sources: US Census Bureau; PRC National Bureau of Statistics; Eurostat; Office for National Statistics
United Kingdom; Ministry of Economy Japan.

China and US have seen
strong rebounds in almost
all categories, most even
above 2019 levels
Retail store sales recovery
driven by food and beverage
across almost all countries.
Personal care andcosmetics also seeing strong
growth across countries
Apparel category continues
to see decline compared with2019, except for US and China
Home appliances sales had
mixed development acrosscountries but have returned to
pre-pandemic levels
25

Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Executive Perspectives updated 17 August 2021 Version 2.0

Retail store sales breakdown by category, % change vs. same month in 2019

Stock markets continue to have an optimistic outlook:
20 out of 24 sectors currently above pre-crisis TSR levels

Based on top S&P
Global 1200 companies

As of 13 Aug 2021

Economic Impact
Companies with default probability >15%2

21 Feb 2020–
13 Aug 2021

21 Feb 2020

13 Aug 2021

Semiconductors

69%

0%

0%

Tech Hardware

47%

0%

0%

Materials

44%

5%

2%

Durable Goods

40%

0%

0%

Auto

35%

0%

0%

Retailing

34%

0%

17%

Capital Goods

34%

2%

2%

Media

32%

0%

0%

Financials

27%

0%

0%

Software

25%

0%

0%

Food/staples Retail

24%

0%

0%

Health Equipment

20%

0%

0%

Prof. Services

18%

0%

0%

Insurance

13%

0%

0%

Banks

10%

0%

0%

Pharma7%

0%

5%

Food & Beverage

6%

0%

0%

Telecom

4%

0%

4%

Household Products

3%

0%

0%

Real Estate

1%

0%

0%

Utilities

-1%

0%

0%

Hospitality

-2%

8%

15%

Energy

-10%

0%

6%

Transport

-12%

0%

24%

1. Performance is tracked for two periods, first from 21 February 2020 (before international acceleration of outbreak) to 20 March 2020 (trough of the market) and from 21 February 2020 through 13 Aug 2021; 2. Implied by 5-year credit
default swap based on median; Note: Based on top S&P Global 1200 companies; sectors are based on GICS definitions; Sources: S&P Capital IQ; BCG ValueScience Center; BCG

26

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TSR1

The COVID-19 US
Vaccine Sentiment
SeriesReimagining Global
Health After theCoronavirus

Lessons in Resiliencefrom Companies That
Were Down but NeverOutHow to End the Global
Pandemic in 2022

Fixing the Fallout
from a Myopic Focus
on Black Vaccine
Hesitancy

The Consumer
Sentiment Series

Leading Through the
Big Transition to the
New Reality

The COVID-19
Investor Pulse Check
SeriesTransform for
Resilience: An
Imperative for Good
Times Too

Click here to read past editions of Executive Perspectives
Source: BCG

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Additional perspectives on navigating the pandemic

Disclaimer

The materials contained in this presentation are designed for the sole use by the board of directors or senior management of
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The situation surrounding COVID-19 is dynamic and rapidly evolving, on a daily basis. Although we have taken great careprior to producing this presentation, it represents BCG’s view at a particular point in time. This presentation is not intended
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The services and materials provided by Boston Consulting Group (BCG) are subject to BCG's Standard Terms(a copy of which is available upon request) or such other agreement as may have been previously executed by BCG.
BCG does not provide legal, accounting, or tax advice. The Client is responsible for obtaining independent advice concerningthese matters. This advice may affect the guidance given by BCG. Further, BCG has made no undertaking
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Executive
Perspectives

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