COVID-19 impact study: assessing the consequences of the pandemic on economic output in developing countries for targeted sectors

Abstract

This paper presents a model for how the impact of the COVID-19 pandemic on economic output in developing countries can be assessed with a new approach. Existing models lack sectoral granularity in developing countries, which can, however, be obtained through input-output modelling by changing the social accounting matrix to simulate a COVID-19 economy. Results have been estimated for 65 sectors and 141 regions which correspond to the Global Trade Analysis Project’s data. The analyses showed that the average impact in Africa and Asia on industry output is −2.6 per cent and −2.9 per cent, respectively. It is estimated that tourism and services are the most heavily impacted sectors, between −15 per cent and −19 per cent for hospitality, recreation, and other service activities, and between −4 per cent and −7 per cent for transport services. The model is a first attempt at estimating impact at this level of granularity per country and sector, which by triangulation with empirical data can be used to make substantiated management or policy decisions.