An Empirical Analysis of the Impact of COVID-19 on Trade: Evidence from a Small island economy

Mauritius - 16 April 2022

Trade topics: COVID-19

This study investigates the potential impacts of the COVID-19 pandemic and related
containment measures on the trade system of Mauritius for the period January 2020 to
June 2021. As the pandemic spreads across the globe due to high interconnectedness
across countries, stringent health containment measures in the form of restrictions on
people and businesses have also been established by the authorities to slow the
propagation of the virus. Being a small island economy highly dependent on
international trade, Mauritius is facing the brunt of the pandemic which is disrupting its
economic activities and trade flows with its main trading partners. COVID-19 incidence
and lockdown measures have impacted both exports and imports in Mauritius. The
analysis was conducted using monthly data and the Bayesian structural time-series
framework for causal analysis, well-known for its feature in exploring the impacts of any
intervention variable on time-series data. Our findings reveal that overall, the trade
values for each trading partner have significantly decreased. The results also suggest
that the stricter the containment measures, the bigger the size of the negative impact of
the pandemic on the trade values for both imports and exports.