Posted: Friday, June 26, 2020. 1:27 pm CST.
By BBN Staff: The international risk assessment firm Moody’s is forecasting that the COVID-19 pandemic will have a negative impact on tourist arrivals in the Caribbean as countries reopen their borders, and that Belize is among the most vulnerable countries to suffer from that impact.
In a report issued this week, Moody’s said that the ongoing pandemic will continue to affect the movement of people and decrease visitor arrivals particularly in small island developing states. The firm said that those decreased vitisor inflows will have a major economic backlash for tourism-reliant countries which will include directly reducing export earnings and weakening the current accounts of those countries.
Moody’s also noted that the countries which are most vulnerable are those with structurally large current account deficits and those which have tourism as the main source of foreign currency earnings. Moody’s Vice President David Rogovic said that overall, the Maldives, Bahamas, Belize, St. Vincent and the Grenadines and Montenegro are the most exposed to a coronavirus-induced decline in tourism.
“The shock to the tourism sector will matter most for those sovereigns with weak credit fundamentals combined with an elevated susceptibility to event risk,” Rogovic said.
The report said that the decline in visitors, which will result in lower foreign exchange intake, will adversely impact tourism-dependent governments that lean on the industry for a large portion of tax revenue and will lead to a deterioration in fiscal balances and a rise in debt burdens for most of those countries.
This week, Prime Minister Dean Barrow announced that the Philip Goldson International Airport (PGIA) would reopen on August 15, which has been met with mixed responses countrywide. Many tourism industry stakeholders are hoping that the reopening will breathe life back into Belize’s tourism sector, which suffered the most at the hands of COVID-19. However, many are concerned that reopening the PGIA with the pandemic still ongoing as it is will put Belize at risk for a level of outbreak that the country is not prepared to handle.
With travelers from the United States (US) making up around 67 percent of all tourists visiting Belize (according to data from the Belize Tourism Board) the announcement might not be the symbol of hope the industry is looking for. The US currently ranks as the world’s hardest-hit country by COVID-10, with over 2.5 million positive cases and over 127,000 deaths. The European Union currently has in the draft stage a ban on US tourists as its member countries prepare to reopen their borders in July, amidst fears of those travelers ushering in a new wave of COVID-19 infections.
Belize reopening the PGIA in July may put the country at risk for the scenario that the EU is trying to avoid, or the situation could play out as Moody’s predicted and the high level of infections in the US results in travel restrictions and decreased tourist traffic. Breaking Belize News will be following these developments.
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