Early estimates of the impact of the COVID-19 pandemic on GDP: a case study of Saudi Arabia

David Havrlant, Abdulelah Darandary () and Abdelrahman Muhsen

Applied Economics, 2021, vol. 53, issue 12, 1317-1325

Abstract: The COVID-19 pandemic has affected economic sectors in a very heterogeneous way. In the early stages of the economic lockdown, only limited economic data, if any, related to the event were available. With the government’s discretionary measures to contain the infection, it became obvious that some sectors will suffer more than others. We have used this information within the input-output framework to calibrate demand shocks to individual sectors and to obtain early estimates of the impact on sectoral and overall GDP. Given the high level of uncertainty, we designed three scenarios, reflecting the severity of the shock, its sectoral distribution, and the time needed for recovery, and applied to the Saudi economy. The negative impact on headline GDP in 2020 is estimated to range from −4.8% to −9.8% compared to the baseline level, while the government’s fiscal countermeasures result in a positive effect of some 2.5% in real GDP. The study also shows how to accommodate a qualitative shift in economic conditions given the still-evolving pandemic. We consider the potential situation of a second wave of the infection that would enforce a protracted lockdown and imply second-round effects.

Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://hdl.handle.net/10.1080/00036846.2020.1828809 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:applec:v:53:y:2021:i:12:p:1317-1325

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/00036846.2020.1828809

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().