Global economy can lose $4 trillion due to Covid-19 impact on tourism: UNCTAD

Geneva [Switzerland], June 30 (ANI): The crash in international tourism due to coronavirus pandemic can cause a loss of more than four trillion dollars to the global GDP for the years 2020 and 2021, according to an UNCTAD report published on Wednesday.

The estimated loss has been caused by the pandemic’s direct impact on tourism and its ripple effect on other sectors closely linked to it.
The report, jointly presented with the UN World Tourism Organisation (UNWTO), says international tourism and its closely linked sectors suffered an estimated loss of 2.4 trillion dollars in 2020 due to direct and indirect impacts of a steep drop in international tourist arrivals.

A similar loss may occur this year, the report warns, noting that the tourism sector’s recovery will largely depend on the uptake of Covid-19 vaccines globally.

“The world needs a global vaccination effort that will protect workers, mitigate adverse social effects and make strategic decisions regarding tourism, taking potential structural changes into account,” UNCTAD Acting Secretary-General Isabelle Durant said.

UNWTO Secretary-General Zurab Pololikashvili said: “Tourism is a lifeline for millions, and advancing vaccination to protect communities and support tourism’s safe restart is critical to the recovery of jobs and generation of much-needed resources, especially in developing countries, many of which are highly dependent on international tourism.”

With Covid-19 vaccinations being more pronounced in some countries than others, the report says, tourism losses are reduced in most developed countries but worsened in developing countries.

Covid-19 vaccination rates are uneven across countries, ranging from below one per cent of the population in some countries to above 60 per cent in others.

According to the report, the asymmetric roll-out of vaccines magnifies the economic blow tourism has suffered in developing countries, as they could account for up to 60 per cent of the global GDP losses.

The tourism sector is expected to recover faster in countries with high vaccination rates like France, Germany, Switzerland, the United Kingdom and the United States, the report says.

But experts do not expect a return to pre-Covid-19 international tourist arrival levels until 2023 or later, according to UNWTO.

The main barriers are travel restrictions, slow containment of the virus, low traveller confidence and a poor economic environment.

A rebound in international tourism is expected in the second half of this year, but the UNCTAD report still shows a loss of between 1.7 trillion dollars and 2.4 trillion dollars in 2021, compared with 2019 levels.

The results are based on simulations that capture the effects of international tourism reduction only, not policies such as economic stimulus programmes that may soften the pandemic’s impact on the sector.

According to the report, the reduction in tourism causes a 5.5 per cent rise in unemployment of unskilled labour on average, with a high variance of zero per cent to 15 per cent, depending on the importance of tourism for the economy.

Labour accounts for around 30 per cent of tourist services’ expenditure in both developed and developing economies. Entry barriers in the sector which employs many women and young employees are relatively low.

In July last year, UNCTAD estimated that a four- to 12-month standstill in international tourism will cost the global economy between 1.2 trillion dollars and 3.3 trillion dollars, including indirect costs.

But the losses are worse than previously expected, as even the worst-case scenario UNCTAD projected last year has turned out to be optimistic, with international travel still low more than 15 months after the pandemic started.

According to UNWTO, international tourist arrivals declined by about 1 billion or 74 per cent between January and December 2020. In the first quarter of 2021, the UNWTO World Tourism Barometer points to a decline of 84 per cent.

Developing countries have borne the biggest brunt of pandemic’s impact on tourism. They suffered the largest reductions in tourist arrivals in 2020 estimated at between 60 per cent and 80 per cent.

The most-affected regions are North-East Asia, South-East Asia, Oceania, North Africa and South Asia, while the least-affected ones are North America, Western Europe and the Caribbean. (ANI)
To receive ChiniMandi updates on WhatsApp, please click on the link below.
WhatsApp Group Link


Please enter your comment!
Please enter your name here