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.