US, Europe, Japan, China and India approve trillions of dollars in government spending and push for measures to try to prevent the global economy from sinking into recession. Commitments by governments and central banks under their programs to fight the coronavirus pandemic have so far totaled nearly $ 7 trillion, according to an analysis by CNN Business.
The total includes government spending, loan guarantees and tax deductions, as well as printing central bank money to buy assets such as bonds and mutual funds. That figure includes the US $ 2.2 trillion aid package, as well as Japan’s projected $ 274 billion stimulus program, which could be approved next month.
When it comes to Europe, CNN Business has included incentives in the major economies: Germany, France, the United Kingdom, Italy and Spain. Together, these funds exceed the amount the world has responded to in the 2008 financial crisis. Economists, however, fear that even these Herculean efforts undertaken so far will not be sufficient if the crisis continues beyond June. “The $ 2 trillion stimulus package is probably the basic minimum needed to counter the current downturn in the economy due to the epidemic,” he said.
The economy will probably need about $ 3 trillion of fiscal stimulus, if not more, “says Joseph Song, an economist at Bank of America. The last time global economic growth was in such peacetime depression was in 1938, said Chattan Ahja, chief economist at Morgan Stanley Bank. In general, high costs can only reduce some of the economic damage.
Although unemployment benefits and one-time cash support will provide citizens with the help they need, a serious economic recovery may not begin until it reopens bars and restaurants, bringing people back to work and restarting the travel industry, CNN Business concludes.