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However, this has not saved Thailand from an economic recession that seems much bigger than that of its neighbors or the United States. This is largely due to the fact that the Thai economy is highly dependent on foreign tourists, for whom the country closed its doors at the beginning of the pandemic and who can only now return to the country under extremely strict conditions.
In an analysis of the impact of COVID-19 tourist bankruptcies on the current account balances of 52 countries, the International Monetary Fund (IMF) concluded that Thailand would be the hardest hit.
The current account measures trade in goods and services plus remittances. The countries with the highest negative rates in the previous graph tend to export much more tourism services than they import, and COIVD-19 has significantly reduced the tourism trade surplus. Among the other countries most affected is Greece, with -5.9 percent. gross domestic product (GDP), Portugal, -4.45%, Morocco, -3.64%. and Costa Rica, -3.38 percent.
Assessing tourism through the prism of a trade balance may seem a bit difficult at first glance. Countries that admit more tourists than they spend abroad actually export more tourism services than they import and therefore face a tourism surplus. Countries that spend large population flows and receive fewer visitors to enjoy the sun and other entertainment abroad are pure importers of tourism. By stopping or slowing travel, the pandemic has reduced countries’ tourism trade deficits.
As my Bloomberg Opinion colleague Noah Smith, the author of the articles, explained a few years ago in response to naive comments from Peter Navarre, a trade adviser to the Donald Trump administration: positive does not necessarily mean reducing the first indicator or increasing the second will drive growth.
But in this case, more or less short-term effects can be observed. The inevitable need to forego spending by foreign tourists is significantly reducing Thailand’s GDP. Meanwhile, in Norway, where people have no choice but to spend money in their own country, other than Marbella or Phuket, GDP is likely to grow as a result, despite many other negative factors, such as falling prices. oil prices.
In Europe, where the richest northern states tend to send far more tourists to the poorer southern countries than they return, it means that a pandemic upsets the continent’s north-south balance. 750 billion The stimulus package of 885 billion euros agreed by the European Union in June, according to which most of it will go to Italy and Spain, seems to be the right answer, although perhaps insufficient.
The United States is not a poor country or too southern, but it also belongs to countries that receive more money from foreign visitors than residents of the country spend abroad.
This trade surplus is not huge, and most of it is not driven by tourists, but by business travelers and foreign students studying at the colleges or universities that operate here. America is not Thailand. But international travel brings them undoubted economic benefits, which means that a pandemic or some other deterrent to such travel is bad news.
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