Tourism Trauma and COVID-19

By External SourceAug 21 2020 (IPS-Partners) Pandemic-related lockdowns, flight cancellations, and border closures may be putting a crimp on summer vacation plans. However, the precipitous drop in tourism will have an outsized impact on countries that rely on foreign travelers—with potentially large-scale effects on their economies’ national accounts. Costa Rica, Greece, Morocco, Portugal, and Thailand could be among the hardest hit with losses in tourism proceeds exceeding 3 percent of GDP, according to the IMF’s recently released 2020 External Sector Report. The chart calculates direct tourism impacts on imports, exports, and current account balances under a scenario that envisions gradual reopenings in September but a drop of about 70 percent in tourism receipts and international tourism arrivals in 2020. A country’s current account balance is a measure of its total transactions—which includes but is not limited to trade in goods and services—with the rest of the world. For some economies, a drop in tourism (which is considered an export) could have an impact on overall current account balances. For example, in Thailand, a decrease in tourism due to COVID-19 could bring the country’s overall exports down by 8 percentage points of GDP and have a direct net impact of about 6 percentage points of GDP on its current account balance in 2020. That could erode part of the 7 percent overall current account surplus the country had in 2019. The outlook for smaller, t...
Source: IPS Inter Press Service - Health - Category: International Medicine & Public Health Authors: Tags: Economy & Trade Health Humanitarian Emergencies Source Type: news