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The COVID-19 Pandemic, Air Transport Perturbation, and Sector Impacts in ASEAN Plus Five: A Multiregional Input–Output Inoperability Analysis

ASEAN, Australia, China, Japan, New Zealand, South Korea, Connectivity, COVID-19, Transportation

The COVID-19 Pandemic, Air Transport Perturbation, and Sector Impacts in ASEAN Plus Five:  A Multiregional Input–Output Inoperability Analysis

This study simulates the sector impacts of demand-side perturbations on air transport sectors due to the COVID-19 pandemic, focusing on ASEAN members plus Australia, China, Japan, the Republic of Korea, and New Zealand. This study involves (i) the generation of a multiregional input–output table from the latest Global Trade Analysis Project data, (ii) a network analysis to determine the importance of the air transport industry in each country, (iii) multiplier and linkages analyses, (iv) determinations of sector impacts from demand-side perturbations on air transport sectors due to the COVID-19 pandemic, and (v) simulation of the effect of fiscal and monetary measures to mitigate the pandemic’s impact. This study demonstrates that the aviation industry is a key sector in domestic and regional economic activities, and the reduction in air transport consumer demand due to the pandemic is estimated to cause gross domestic product (GDP) reductions from 0.4% to 2.1%. Government intervention, through fiscal and monetary policies, has, however, mitigated severe impact, moderating GDP and value-added losses. Thus, a viable policy prescription for the aviation industry is of utmost importance.

This research was conducted as a part of the project ‘ERIA Research on Covid-19’ at the Economic Research Institute for ASEAN and East Asia (ERIA).

The COVID-19 Pandemic, Air Transport Perturbation, and Sector Impacts in ASEAN Plus Five:  A Multiregional Input–Output Inoperability Analysis

Date

16 April 2021

Category

Connectivity , COVID-19

Author

Tamat Sarmidi, Norlin Khalid, Muhamad Rias K. V. Zainuddin, Sufian Jusoh

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