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Covid-hit tourism could leave $4 trillion hole in global economy: UN report

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  • The estimate of losses is based on direct impact on tourism and ripple effect on related sectors

 

Geneva: Covid-19 has deeply impacted all sectors, but among the worst sufferers is the tourism industry. The impact of the pandemic on the sector could result in a more than $4 trillion loss to the global economy, UN trade and development body UNCTAD said on Wednesday in a report issued jointly with the UN World Tourism Organization (UNWTO). As per the report, the industry is not expect to rebound until 2023 or even later.

The estimate is based on losses caused by the pandemic’s direct impact on tourism and the ripple effect on related sectors, and is worse than previously expected. Last year, UNCTAD had estimated that the stagnant international travel would cost the global economy anywhere between $1.2 trillion and $3.4 trillion.

When the first wave struck, countries across the world had imposed travel restrictions. Subsequently, these restrictions have been lifted and re-imposed depending on the Covid situation from time to time.

International tourist arrivals declined by about 1 billion, or 73 per cent, last year, while in the first quarter of 2021 the drop was around 88 per cent, the report said.

Developing countries have been badly affected by the pandemic’s impact on international travel, with arrivals having dropped by 60-80 per cent. Vaccine inequity has only magnified the economic blow to the tourism sector in these nations. Countries with higher vaccination rate are expected to recover faster.

However, it will be a while before international tourism returns to the pre-pandemic levels. According to the report, tourism will remain affected at least till 2023 due to barriers like travel restrictions, slow containment of the virus, low traveller confidence and poor economic environment.

The study anticipates a rebound later this year, but also expects a loss of between $1.7 trillion and $2.4 trillion in 2021, based on simulations which exclude stimulation programmes and similar policies.

 

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