Impact of The COVID-19 Pandemic on Trade in Medical Products and Economic Development

Abstract

Purpose: In this study, it is aimed to examine the economic effects of medical device exports and imports during the COVID-19 period. Design/Methodology/Approach- In this paper, time series and trade data spanning from January 2003 to November 2021 are adopted to empirically investigate the impact of the COVID-19 pandemic on exports and imports in Türkiye. Data on COVID-19 were obtained from the official website of the MoH. Data on the medical device industry is the import and export data set from the ITC TradeMap database. The effects of the medical device trade during the pandemic on the economy were analyzed econometrically by considering the industrial production index, exchange rate, and inflation variables. Results – Medical device exports boosted economic growth during COVID-19. The effect of import was not found significant. It has been observed that imports of medical devices increase the exchange rate, while exports decrease the exchange rate. In this period, it was observed that medical device exports had an increasing effect on inflation. Discussion – In this study, it is seen that imports and exports of medical devices have significant effects on GDP industrial index, foreign exchange and inflation variables, and while exports are expected to reduce inflation in the normal period, this result is not observed in our study. This result is attributed to the exchange rate and excess money supply along with the situational factors introduced by COVID-19. The effect of imports and exports on the exchange rate is explained by the monetary policy of our country, access to financing and increased risk premium factors rather than the pandemic.