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International Monetary Fund. Middle East and Central Asia Dept.

Engine of Growth? Tourism in Jordan's Economy 1 Tourism has grown to become Jordan’s largest service export, representing a third of total exports prior to the pandemic. We present evidence that tourism fluctuations are an important source of business cycle variation in Jordan, with a negative tourism shock reducing growth and inflation and rising unemployment. More importantly, we document significant positive complementarities of tourism with other sectors, especially finance, restaurants and hotels, construction, and manufacturing, suggesting that

Vivian Parlak, Mr. Gonzalo Salinas, and Mr. Mauricio Vargas
We measure the impact of frequent exogeneous shocks on small ECCU economies, including changes to global economic activity, tourism flows, oil prices, passport sales, FDI, and natural disasters. Using Canonical-Correlation Analysis (CCA) and dynamic panel regression analysis we find significant effects of most of these shocks on output, while only fluctuations in oil prices have significant effects on inflation. Results also suggest a significant impact of FDI and passport sales on the external balance, a link that CCA identifies as the strongest among all analyzed relations. The model also shows how Covid-19 related shocks lead to substantial contractions in output in all ECCU countries and deterioration of the current account balance in most of them, depending on countries’ tourism dependency.
International Monetary Fund. African Dept.

The Tourism Sector in São Tomé and Príncipe 1 The global pandemic shock has caused an unprecedented shock to the tourism industry, severely impacting tourism-dependent economies such as São Tomé and Príncipe. This chapter seeks to examine the recent developments in the tourism sector in São Tomé and Príncipe. It further examines the outlook for recovery prospects and outlines some policy priorities given the economic vulnerability to the tourism shock and the need to minimize scarring and protect the vulnerable workers . A. Recent Trends in the Tourism

Vivian Parlak, Mr. Gonzalo Salinas, and Mr. Mauricio Vargas

III. STYLIZED FACTS A. Global Economic Activity B. Oil Prices C. Foreign Direct Investment D. Natural Disasters E. Citizen-by-Investment programs IV. DATA AND METHODOLOGY A. Data B. Methodology V. MAIN RESULTS A. Baseline Econometric Results B. Extensions/Robustness Checks VI. AN APPLICATION TO THE COVID-19 SHOCK VII. CONCLUDING REMARKS REFERENCES TABLES 1. Data Deninition and Sources 2. Canonical Correlation Analysis-Standardized Coefficients FIGURES 1. Impact of 2009 Tourism Shock 2. Impact of Oil Price Slump in

International Monetary Fund. European Dept.

in tourism, the engine of growth over the past five years, and the associated increase in uncertainty has triggered a drop in domestic demand and an increase in unemployment. Fiscal relaxation and monetary easing have stabilized expectations and cushioned the effects of the tourism shock, averting a deeper growth slowdown. The recent collective wage agreement, completed with active government involvement, has dampened the negative impact on employment. Solid economic fundamentals have also allowed the economy to weather the downturn, although significant downside

International Monetary Fund. Western Hemisphere Dept.

of a Credible Postponement of the Regional Debt Target 5. COVID-19 Tourism Shock’s Impact on the ECCU Banking Sector’s Asset Quality 6. Assessing Currency Crisis Risk in the ECCU: Macroeconomic Perspective FIGURES 1. External Sector Developments 2. Monetary Developments 3. Financial Sector Developments TABLES 1. Selected Economic and Financial Indicators, 2017–21 2. Selected Economic Indicators by Country, 2018–26 3. Selected Central Government Fiscal Indicators by Country, 2018–26 4. Selected Public Sector Debt Indicators by Country, 2018

Ms. Evridiki Tsounta

level in the receiving country, the lower will be the demand for tourism. Price elasticities vary considerably across studies, and in many cases unexpected signs or insignificant values have been recorded ( Crouch, 1994b ). We will examine the importance of price movements using competitor-based and customer-based indices of the real effective exchange rate. We also investigate whether oil price changes influence tourism demand, since they would clearly affect the cost of transportation . Tourism Shocks . Dummy variables have been frequently introduced to account for

International Monetary Fund. Western Hemisphere Dept.

Governments to build the databases that are needed to enrich the quality of banking sector assessments. These assessments will help with the identification of institutions which pose high systemic risk, especially those with very elevated NPL levels. The tourism shock is projected to almost triple banks’ NPLs. Regional efforts to reduce NPLs will continue. One option is through purchases by the Eastern Caribbean Asset Management Corporation (ECAMC) which was established by the Monetary Council for that purpose. The alternative is through private sector asset management