The Covid-19 based economic shutdowns are unlike anything we've seen in the past 100 years. There will be a global recession as a result, but some countries will get hit harder than others. While there are a lot of complex factors, certainly countries heavily reliant upon tourism are going to take a big hit.
Let's take a look at how dependent several major economies are upon tourism, starting with Europe.
From Europe, we can see that Croatia, Portugal, Greece, Estonia, Spain, Austria, and Hungary all look very vulnerable, with over 5% of their respective GDPs coming from tourism. Germany and the UK, on the other hand, are less reliant upon tourism at under 2% of GDP. Surprisingly, France and Italy are only around 2.5% of GDP for tourism.
Portugal's tourism revenues account for roughly 10% of GDP, which is a major concern given that their Debt to GDP ratio is over 117% and they were one of the countries at the center of the last Eurozone crisis, alongside of Greece, Italy, and Spain.
Next, we'll take a glance at Asia. Asia is a bit more straightforward on the issue of tourism, with the countries closest to the equator drawing in bigger shares of tourism bucks, including Thailand, Malaysia, and Cambodia. The major Asia economic powers (Japan, China, South Korea, and India) are not that reliant upon tourism, all around or even under 1% of GDP.
Finally, we'll take a quick glance at the Americas. Once again, it's fairly straight-forward, with the tropical areas in the Caribbean being heavily reliant upon tourism and the larger states (e.g. US and Brazil) being less so.
While there are many other considerations than tourism, many European nations heavy reliance on tourism bodes ill for the next few years. Portugal, Greece, and Spain will all take major hits. Even Italy, with tourism at 2.5% of GDP, is above-average by global standards (even if about average in Europe).
A major Eurozone contraction could have global implications and it's not being talked about much right now. Even based solely on tourism receipts, another Eurozone crisis may be inevitable, and that's not even examining the much deeper banking or sovereign debt issues.
Author: Jake Huneycutt, Aardvark Data
Last Updated: 15 April 2020, 06:00 am EDT
Sources: World Bank, link