THE IMPACT OF COVID-19 ON THE ECONOMY OF NEW MEXICO: THREE SCENARIOS

Ali Arshad
New Mexico Highlands University

ABSTRACT
This study estimates the potential impact of another rise in COVID-19 on the economy of
New Mexico. Tracing changes in final demands in 220 key sectors, the consequences are assessed
based on three scenarios: low, medium, and high contractions representing the equivalent of one,
three, and six months contractions in output due to a resurgent COVID-19 induced shutdown of
non-essential businesses. Using the IMPLAN (economic impact assessment software system)
input-output technique and the New Mexico inflation-adjusted economic data for 2017, the direct,
indirect, and induced impacts on employment, labor income, output demand, and tax revenues
have been calculated. The estimates show that the 2020 pandemic poses a grave danger to the
State’s economy. The contractions in the economy have the potential of increasing the
unemployment rate throughout New Mexico.

Keywords: COVID 19, economy, New Mexico economic impact assessment software system