Abstract
The outbreak of Covid-19 is the second most devastating event over a century. The pandemic, alongside deep health crises, has ushered the largest economic shocks, which require governments’ attention to ameliorate to avoid an economic downturn. The aim of this study is to measure the economic impacts of Covid-19 in Brunei by estimating the exposure, vulnerability, and resilience of the economy. This study deployed the United Nations Disaster Risk Reduction framework to examine the economic impact empirically. The data related to variables of gross domestic product, oil prices, international merchandise trade, tourism, unemployment, consumer price index, money supply, and national accounts were collected from September 2019 to July 2020 and analyzed through the fixed effects panel regression technique. The findings show that the news of the Covid-19 outbreak has exposed the weaknesses in energy sectors by having a significant negative impact. Additionally, analysis discloses that the energy and tourism sectors are vulnerable to the shocks of Covid-19. During the peak of the pandemic outbreak, unemployment in Brunei has also escalated. Additionally, the energy and tourism sectors are less resilient to pandemic shocks. The findings indicated that the consumer price index has significantly escalated during the economic recovery process. The findings elucidate that the overall GDP growth rate, international merchandise trade, and the financial sector continue exhibiting better performance amid Covid-19. The findings of this study contribute to developing policy implications for the emerging economies concerned with the economic recovery process during the pandemic.
Highlights
The case of respiratory infection caused by the novel Coronavirus (Covid-19) was first reported in Wuhan (China) on 31 December 2019, and the World Health Organization declared it a global pandemic on 11 March 2020 (WHO, 2020a)
The time event between 1 September to 9 January was considered as this duration covers the time when the first case of the Covid-19 outbreak was reported in China, which will directly analyze whether the economic system of Brunei experiences significant shocks due to the news of the outbreak
This study examined the economic shocks in Brunei triggered by the Covid-19 pandemic
Summary
The case of respiratory infection caused by the novel Coronavirus (Covid-19) was first reported in Wuhan (China) on 31 December 2019, and the World Health Organization declared it a global pandemic on 11 March 2020 (WHO, 2020a). As of 27 July 2020, there are more than 16.19 million confirmed cases of Covid-19 and 647,846 deaths in the world (WHO, 2020b). The American region is anticipated to be the epicenter of Covid-19 with more than 4,232,979 confirmed cases and 146,927 deaths, and many states decided to continue lockdown (WHO, 2020c). Covid-19 continues to surge globally at an alarming rate and burn economic activities to nearly a standstill as countries decided to reimpose tight safety measures to halt its spread (The World Bank, 2020a).
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