Direct and indirect effects of the covid-19 pandemic and response in South Asia

Economic Impact of COVID-19 control measures

Measures to control the spread of COVID-19 have resulted in wide-ranging disruption of economic activities across the globe. We estimated the economic impact of

these strategies on the following outcomes:

• Change in GDP
• Job losses
• Change in poverty rate
• Change in proportion of population who is food insecure

Given the dynamic nature of the epidemic and the lag in production of many economic inputs, we assumed that the model will be static in nature (i.e. output, employment and poverty will not be an exponential function of ongoing changes per time period, but a

function of change from the period prior to the beginning of the epidemic) and as a result may be less sensitive than a fully dynamic model.

The severity of control measures was classified as follows:

• Stage 0 – Baseline: No changes
• Stage 1 – Limited: Warnings/advisories, public gatherings ban, social distancing, schools closures
• Stage 2 – Mild: Closure of shopping areas, imports/ exports reduced
• Stage 3 – Moderate: Closure of restaurants, public transport reduced, imports/exports reduced

to essential

• Stage 4 – Severe: Closure of parks, public transport closed, all trading restricted

To estimate the impact of the different stages of control measures on output (GDP) we deconstructed output into labor and non-labor related outputs (interest on loans, debt repayment, bonds, etc.).

Our model estimated changes in labor-related output only, as this is the area most likely to be affected by the

COVID-19 control measures, leading to reduced capacity of workplaces, factories etc.

© UNICEF/India/UN0379948/Panjwani/2020