An Empirical Analysis of the Impact of COVID-19 on Trade: Evidence from a Small Island African Economy
Mauritius - 30 December 2023
This study investigates the potential impacts of the COVID-19 pandemic and the related containment measures on the trade system of Mauritius for the period January 2010 to June 2021. As the pandemic spread across the globe due to high interconnectedness across countries, the Mauritian authorities also established stringent health containment measures in the form of restrictions on people and businesses to slow the propagation of the virus. Being a small island economy highly dependent on international trade, Mauritius faced the brunt of the pandemic which disrupted its economic activities and trade flows with its main trading partners. COVID-19 incidence and lockdown measures impacted both exports and imports in Mauritius. The study was conducted using monthly data and the Bayesian structural time-series framework for causal analysis. Our findings reveal that the trade values for each of the country’s trading partners decreased substantially. Furthermore, the stricter the containment measures, the bigger the negative impacts on both imports and exports. This study thus highlights the vulnerability of Mauritius as a small island economy to pandemics, emphasizing the need for tailored response strategies to mitigate the effects on trade.