Stimulating the World’s Economies
Governments around the world are fighting battles on two fronts: On one side, they are enacting policies to reduce the spread of COVID-19 and treat those infected, while on the other they are trying to blunt the economic fallout the pandemic is causing.
This article provides a rundown of economic stimulus packages from around the world as the European Union (EU) is poised to pass a 500 billion Euro ($551 billion) stimulus package today (no official announcement as this article was published). The rundown relies heavily on the “Factbox: Global Economic Policy Response to Coronavirus Crisis” from Reuters and “Government Bailouts Are Beginning: We’re Keeping Track” from Quartz. When other sources are used, a link is provided. U.S. dollar equivalents were obtained using the 1 April United Nations Operational Rates of Exchange.
Austria announced a package totaling 72 billion euro ($79 billion) to support hard-hit companies, guarantee loans, provide aid to individuals, and defer taxes.
Denmark's government announced a policy to pay 75 percent of laid off or furloughed employee wages up to a weekly cap equivalent to $3,288 per month. The government will also protect hard hit companies by covering such costs as rent. The estimated cost is 42.6 billion kroner ($6.3 billion).
The European Union package expected to be passed today includes a 240 billion euro ($264 billion) standby lines of credit for the euro zone; increasing the European Investment Bank’s lending capability by 200 billion euros ($220 billion); subsidizing wages by 100 billion euros ($110 billion); and 20 billion euro ($22 billion) in grants for medical supplies and health care. Notably, the package is not expected to include the so-called “coronabonds,” or joint-issued debt from EU countries.
Germany's total stimulus package of 750 billion euros ($827 billion), includes plans to stabilize large companies, loans to hard-hit businesses, and loan guarantees to secure corporate debt risk.
France's mid-March measures included 45 billion euros ($50 billion) to help small businesses and workers and 300 billion euro ($331 billion) guarantees of corporate borrowing.
Italy suspended loan and mortgage payments for companies and families and provided aid to workers with a 25 billion euro ($28 billion) program in March. Yesterday, the government offered 400 billion euros ($442 billion) worth of liquidity and bank loans to companies.
Poland's stimulus package is worth 212 zlotys ($51 billion). The package supports five goals: employee safety, company financing, health protection, strengthening the financial system, and public investment programs.
Spain's stimulus packages included 200 billion euros ($221 billion) in credit guarantees for companies and loans and aid for people hardest hit; 700 million euros ($849 million) to prevent evictions.
United Kingdom passed stimulus packages totaling 390 billion pounds ($483 billion), including loan guarantees to businesses, paying a portion of furloughed staff wages, delayed tax collection for companies.
Brazil announced a 51 billion reis ($9.9 billion) program to aid companies, enabling them to reduce salaries, or hours, and temporarily suspend contracts.
Canada's stimulus package will cover up to 75 percent of wages of people working for small- and medium-sized companies. The $107 billion ($73 billion USD) is split roughly half of it on stimulus guaranteeing up to 75 percent of wages in hard-hit companies, loans to companies, delayed student loan payments; and the other half on tax deferments.
Mexico President Obrador announced the government would not have an expansive stimulus package, focusing instead on expanding social programs, supporting the state-owned oil company, and tightening government expenditures (cutting executive salaries as an example).
Peru's stimulus package worth 80 billion soles ($26.4 billion) will have three phases: spending to support public health and containing spread of disease, credit guarantees to companies, and reactivating copper production (the country’s largest industry).
Africa and the Middle East
Bahrain enacted a stimulus worth $11.4 billion, including payroll assistance, utility bill assistance, and exempting people and businesses from municipal fees.
Egypt announced a stimulus package of 100 billion Egyptian pounds ($6.4 billion), mostly loans to the manufacturing sector. The country also ordered a real estate tax exemption for three months and enlisted the army to distribute rations.
Nigeria launched a COVID-19 relief fund featuring 50 billion naira ($130 million) in loans to businesses and individual in need.
Saudi Arabia enacted various tax relief efforts and announced a 50 billion riyal ($13 billion) measure to support the banking and financial sector.
South Africa outlined 12 financial measures to aid hard-hit businesses. Total financial expenditures were not available.
The United Arab Emirates issued a 16 billion dirham ($19 billion) package, reducing government fees related to labor costs and support for banking and financial systems.
Asia and Oceania
Australia's stimulus package of $213 billion Australian dollars ($131 billion) will subsidize wages for approximately 6 million people, small business assistance, and support for large companies.
China will multiple monetary stimulus and central bank programs. It also announced infrastructure investments of at least 2.8 trillion yuan ($400 billion).
India announced 1.7 trillion rupees ($23 billion) in funding, mostly direct cash transfers and food security measures.
Indonesia announced a plan worth approximately $25 billion to reduce corporate taxes and expand social services to citizens.
Japan, along with its emergency declaration, announced 108 trillion yen ($1 trillion) for stimulus.
New Zealand's stimulus package of 12.1 billion New Zealand dollars ($7.3 billion) includes wage subsidies, bolstering public health capabilities, social welfare increases, and changes to business taxes.
Russia created a fund of 300 billion rubles ($3.8 billion) to include tax breaks for tourism and travel companies and expand preferential loan programs to businesses.
South Korea's two stimulus packages worth 70.8 trillion won ($58 billion) include cash payments to citizens, small business assistance, and loan and financial support.
Thailand approved 1.9 trillion baht ($58 billion) to aid temporary workers, contract workers and the self-employed, direct payments to workers, and other stimulus.
For more pandemic response articles and resources, visit the ASIS Disease Outbreak: Security Resources page.