1. MOHAMED ABDULAHI KHALIF - Lecturer, Faculty of Economics and Management Science, Somali National University, Mogadishu, Somalia.
2. HUSSEIN MOHAMED JIMALE - Lecturer, Faculty of Economics and Management Science, Somali National University, Mogadishu, Somalia.
People's lives in Somalia were dramatically affected by Corona Virus Disease-2019 (COVID-19) pandemic, particularly the economic sector. So, this study investigates the impact COVID-19 cases on the cost of living in Somalia over a period spanning from 2020 to 2022. Johansen co-integration test and Vector error correction model were employed to establish the long-run and short-run co integrations using a monthly time series data. After checking the series for unit root by using the Augmented Dickey-Fuller (ADF) test, the research identified that all the variables are stationary at first difference, that is I~(1). The empirical results of the study revealed long co integration between the variables. The study found a negative relationship between the inflation rate and covid-19 cases in Somalia. Moreover, the results from the vector error correction model indicate that there is convergence among the variables in the long run. The speed of adjustment was 5.2% that indicates almost 5% of the deviation of the inflation from its short-run equilibrium level is corrected each year.
Inflation, COVID-19, Food inflation, Co integration.