Cyril Rebillard an Economist in the Open Economy Macroeconomics Division of the Research Department at the International Monetary Fund recently offered a chart to show the trauma that the Pandemic has caused countries which rely heavily on tourism. We thought it was important to share this with you, as we all know the travel industry is in crisis. But what we really want to know is how hard COVID will hit tourism. He and the IMF have correctly concluded that it’s going to be bad, with some countries like Thailand being particularly hard hit.
According to Rebillard, “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 which the IMF created, and which we have presented below, 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.
As he notes, “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.”
This is a significant hit which unfortunately proves just how hard COVID will hit tourism.