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The economic effects of the COVID-19 tourism downturn

Nathaniel Debono and Noel Rapa

No PP/08/2021, CBM Policy Papers from Central Bank of Malta

Abstract: The COVID-19 pandemic has led to an unprecedented downturn in the global tourism industry. The Maltese tourism sector has also been severely hit by the crisis with total tourist expenditure in 2020 falling by 80% when compared to 2019. Given the unprecedented scale of the crisis and the considerable intersectoral linkages that characterise the industry, the downturn in the tourism industry is likely to have had far reaching effects in all sectors of the Maltese economy. The study uses a Leontief demand-driven model to estimate the overall effect that the COVID-19 related drop in tourism has had had on Maltese economic activity. Results show that the tourism drop has contributed to a 7.8% fall in overall GVA, with economic activity in sectors covering accommodation, food services activities, transportation services, agriculture, forestry and fishing and wholesale and retail trade being affected the most. The tourism industry has contributed to falls in private consumption and total exports of 6.4% and 6.2% respectively.

JEL-codes: C67 R15 Z31 (search for similar items in EconPapers)
Pages: 21 pgs
New Economics Papers: this item is included in nep-tur
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https://www.centralbankmalta.org/site/Publications ... rn.pdf?revcount=3979 First version, 2021 (application/pdf)

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