Flight cancellations, border closures and lockdowns had put a crimp on vacation plans, which means a drop in tourism and negative impacts on countries that rely mainly on the sector, according to the IMF.
The IMF says that Thailand, Costa Rica, Morocco, Greece and Portugal could be among the hardest hit countries. The losses in tourism proceeds for these countries could exceed three [per cent of the GDP, the IMF warned in its recent 2020 External Sector report.
For many countries that mainly rely on tourism, a drop in tourist arrivals could have an impact on the overall economy of the country, the IMF said.
The IMF said that the impact of covid 19 was severe mainly on smaller countries that mainly relied on tourism. They could see a larger direct impact on their trade and current account balances.
Smaller, tourism dependent countries and even larger economies with a large tourism industry may see offsetting indirect effects. It said that smaller nations with less domestic resources often rely on more imports to support their tourism industries. A drop in tourism exports and the economic activity that it drives, both directly and indirectly, will lead to a corresponding drop in imports.
The IMF also said that it was still not known about the pace of tourism recovery in 2020. There are also fears that the desire of the people to travel abroad will have many hardships in 2021 also because of the pandemic situation.