A brand new report estimates that in 2020, Guam’s economic system retracted between 0.7% and 18.9%, and as a lot as 49% with out federal pandemic help.
The “2020 Guam Economic Report” launched Wednesday by economics professor Maria Claret Ruane and a workforce of college, college students, and alumni from the Faculty of Enterprise and Public Administration on the College of Guam studied Guam’s economic system in the course of the pandemic.
The estimate foreshadows Guam’s actual gross home product for 2020, which might not be launched from the Bureau of Financial Evaluation beneath the U.S. Division of Commerce till late 2021 or early 2022.
“Guam’s actual GDP for 2020 is anticipated to say no, which might replicate the financial impression of this COVID-19 pandemic to incorporate the decimation of tourism and the ensuing lack of output, revenue, employment, and tax revenues in different sectors of Guam’s economic system,” the report states.
The authors estimate that Guam’s 76% lower in tourism from 2019, as reported by the Guam Guests Bureau, resulted in a lack of native revenue and spending of $1.38 billion. The loss from tourism was greater than offset by the $1.6 billion Guam obtained in varied types of federal help by the coronavirus reduction invoice.
Within the absence of this help, the report estimates Guam’s economic system would have declined 42% to 49%. For reference, the U.S. economic system decreased 25% between 1929 and 1933 in the course of the Nice Melancholy.
The authors calculated the unemployment price to be 19.8% utilizing one method and 26.6% utilizing one other. This dietary supplements an official unemployment price launched by Guam’s Bureau of Labor Statistics for June 2020 of 17.3%.
The authors calculated that family spending decreased between 30% and 50%, whereas enterprise spending decreased 50% to 70% within the absence of federal help.
The report notes that the authors couldn’t reference a few of the typical main sources of financial information on account of restricted or delayed availability. As a substitute, the workforce used media studies and educated assumptions primarily based on finest practices to provide their very own estimates.
“This undertaking offered college students a precious expertise to research a turbulent financial surroundings and its impression on a small island economic system like Guam,” mentioned Annette T. Santos, dean of the Faculty of Enterprise and Public Administration.
Disaster in self-identity
The report notes that the pandemic has been a wake-up name for the island to scale back its reliance on the tourism trade and that the pandemic highlighted the benefits and drawbacks of Guam’s relationship with the US.
“The COVID-19 pandemic of 2020 is not only a well being disaster. It’s an financial disaster and a disaster in self-identity,” Ruane mentioned. “Though the connection with the U.S. might have restricted the island in its response efforts towards COVID-19, Guam obtained funding and assist from the federal authorities, which mitigated the financial impression. All components should be thought-about when discussing self-determination.”
The report states that “an impartial Guam characterised by a weak tourism trade and a scarcity of recent native industries to diversify our present financial construction would [have forced] us to study to reside with a lot much less materials safety and alternatives than our present relationship with the U.S. affords us, much more so throughout this pandemic.”