By Mike Cherney 

SYDNEY -- Australia expects its Covid-19 vaccination campaign to be delayed by months because of concerns over side effects from the AstraZeneca PLC vaccine and supply-chain issues, in a setback that threatens to extend its border closure and weigh on its economic recovery.

Australian Prime Minister Scott Morrison initially said he wanted four million people vaccinated against the coronavirus by the end of March, though health officials later clarified they were targeting four million doses. Mr. Morrison said Monday that Australia has vaccinated only about 1.2 million people, or roughly 5% of the population. Government data show about 1.2 million doses have been administered.

Officials previously said they would aim to vaccinate the entire population by the end of October, but now aren't sure when that might happen.

"Rather than set targets that can get knocked about by every to and fro of international supply chains and other disruptions that can occur, we're just getting on with it," Mr. Morrison said Monday in a video posted to Facebook. Over the weekend, Mr. Morrison said he now hoped Australians could get a first dose before the end of the year, but he didn't commit to that date and said the government wouldn't set a new target.

Australian officials were relying in large part on the AstraZeneca vaccine because it can be produced locally. But they have blamed the slow rollout on a delay in shipping AstraZeneca vaccines from Europe, which was supposed to boost early vaccination efforts as Australia ramped up its ability to make the vaccines domestically.

The bet on AstraZeneca ran into further challenges last week when Australia's drug regulator said the vaccine should be given only to people age 50 and over because of the risk of rare but sometimes deadly blood clotting. That forced Australian officials to restrict the rollout of the vaccine, with other countries taking similar steps.

Australia is also administering the Pfizer Inc. vaccine, but all the Pfizer vaccines need to be imported and are also at risk of shipping delays.

The revised timeline for the rollout means Australia's international border, which has been shut to most visitors since the pandemic began and has helped keep the country safe from the virus, could remain closed for longer than expected.

Australian officials previously said the border could be closed for the rest of the year, but an extended closure beyond that would deal yet another blow to tourism businesses that are already struggling and universities that relied heavily on international students.

Australia's economic recovery has been stronger than many forecasters expected, some economists say, driven in part by effective containment of the coronavirus, interest-rate cuts and large government stimulus. There are few coronavirus restrictions in many Australian cities, given that there is virtually no community transmission of the virus, with bars and restaurants largely full and some offices open.

Still, Australian officials have briefly locked down some cities in recent months to prevent small outbreaks from growing, so the virus continues to pose an economic threat. A three-day lockdown in Brisbane, Australia's third-largest city, just before the Easter holiday forced many travelers to cancel their holiday plans. Officials in Sydney locked down parts of the city around Christmas because of an outbreak there.

Economists at Commonwealth Bank recently raised their 2021 growth forecasts to 4.7% from 4.4%, but the vaccination delay increases the coronavirus-related risks to the forecast, said Gareth Aird, head of Australian economics at Commonwealth Bank.

"At the margin, the risk of Covid getting into the community then is obviously a little bit higher," Mr. Aird said.

Even if Australia immediately increased the pace of its vaccinations to match the U.K., where vaccinations are occurring at the second-fastest rate globally, Australia would still need an extra 116 days to reach herd immunity compared with earlier plans of giving everyone at least one dose by the end of October, according to an analysis from the McKell Institute, a progressive think tank. It estimated that delay would cost the economy 1.4 billion Australian dollars, equivalent to $1.1 billion, because of more lockdowns.

"I was surprised at the scale of the numbers, and I was also surprised at how bad they got quickly based on the rollout," said Michael Buckland, chief executive at the institute. "As the delays start to accumulate, you start to get some very big blowouts in costs."

Some 30% of visitors to Tropical Fruit World, a tourist attraction in New South Wales state that includes tours of its fruit farm, came from overseas before the pandemic, said Sales and Marketing Manager Shona Fuller. She said some group bookings had already come from international visitors for Christmas this year, but she isn't now sure if those people will be able to visit, given Australia's vaccine delay.

"It's really disappointing, to be honest," she said of the delay. "Hopefully it all works itself out and we can start traveling and we can get some international tourists back."

Australia was able to afford a slow start to its rollout because the spread of the coronavirus was largely contained, but officials should have used the extra time to ensure the rollout went smoothly, said Dr. Stephen Duckett, health program director at the Grattan Institute, a think tank based in Melbourne.

"We ended up with both a slow start and a stuffed-up rollout," Dr. Duckett said. "We got the worst of both worlds."

Write to Mike Cherney at mike.cherney@wsj.com

 

(END) Dow Jones Newswires

April 12, 2021 20:01 ET (00:01 GMT)

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