Global economy could lose over 3.37 trillion euros because of Covid

The global economy could lose over 3.37 trillion euros because of Covid-19. Economic losses are mounting in developing countries due to the absence of widespread vaccinations.

The crash in international tourism due to the coronavirus pandemic could cause a loss of more than 3.37 trillion euros to the global GDP for the years 2020 and 2021, according to UNCTAD, the UN’s trade and development body.

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 Organization (UNWTO), says international tourism and its closely linked sectors suffered an estimated loss of just over two trillion euros 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 added, “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.

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.

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

But experts do not expect a return to pre-Covid-19 international tourist arrival levels until 2023 or later, although Europe is expected to start rebounding later this year.

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

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