The economic consequence of large-scale epidemic outbreak: The path and loss evaluation of COVID-19 in China based on input-output analysis

Abstract

ABSTRACT The COVID-19 pandemic has significantly impacted China's economic and social development. Understanding the direct and indirect effects of the epidemic on the economy is vital for formulating scientifically grounded epidemic management policies. This study assesses the economic losses and influence paths of a large-scale epidemic in China. We proposed three COVID-19 scenarios – serious, normal, and mild – to evaluate the direct economic impact on China's GDP from a demand perspective. An input-output model was used to estimate the indirect impact. Our findings show that China's GDP could lose 94,206, 75,365, and 56,524 hundred million yuan under serious, normal, and mild scenarios, respectively, with corresponding GDP decline rates of 9.27%, 7.42%, and 5.56%. Under the normal scenario, indirect economic loss and total loss are projected at 75,364 and 489,386 hundred million yuan, respectively. Additionally, the pandemic led to a reduction in carbon emissions: direct emissions decreased by 1,218.69 million tons, indirect emissions by 9,594.32 million tons, and total emissions by 10,813.01 million tons across various industries. This study provides a comprehensive analysis of the economic and environmental impacts of the pandemic.