Portugal is among the countries that are expected to have losses in the tourism sector in excess of 2% of the Gross Domestic Product (GDP) due to the Covid-19 pandemic, according to a report by the International Monetary Fund (IMF) released today.
"Losses in tourism receipts that exceed 2% of GDP should be concentrated in major tourism exporters such as Costa Rica, Egypt, Greece, Morocco, New Zealand, Portugal, Spain, Sri Lanka, Thailand and Turkey." it can be read in the report on the external sector released today by the IMF.
Tourism data were analyzed from a study by the International Tourism Organization, which "includes a scenario involving a gradual lifting of travel restrictions starting in September", which implies "tourism revenues 73% below 2019 levels ».
“For economies dependent on sectors affected [by the pandemic], such as oil and tourism, or dependent on remittances, the impact of the crisis was especially acute, with negative effects on the current external balance at 2% of GDP that will likely need a significant economic adjustment', warns the IMF.
Worldwide, the institution led by Kristalina Georgieva points out that there will be a "modest shrinkage" in current account deficits and surpluses, of 0,3% of global GDP, a value subject to "great uncertainty".
“The deterioration in financial market sentiment at the start of the crisis triggered a sudden reversal of capital flows and currency depreciations in several emerging and developing economies”, while reserves appreciated, “reflecting their safe harbor in times of crisis”.
In the short term, the IMF argues that “policy efforts should continue to focus on providing relief and promoting economic recovery”, and to adjust to the external shock, countries with flexible exchange rates should “allow themselves to adjust when necessary'.
"In the medium term, the political and economic distortions that preceded the crisis may persist or worsen, implying the need for reforms", also says the institution based in Washington.
In cases where 'excess current account deficits in 2019 reflect larger-than-desirable budget deficits and where such imbalances persist after the crisis, medium-term fiscal consolidation would promote debt sustainability, reduce the current account gap and facilitate the accumulation of international reserves,” according to the IMF.
“The outlook for [countries'] external positions remains highly uncertain, with significant risks,” notes the fund.
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