Global Economic Effects of COVID-19

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Global Economic Effects of COVID-19
June June 419, 2020 , 2020
Since the COVID-19 Since the COVID-19 outbreak was first diagnosed, it has spread to over outbreak was first diagnosed, it has spread to over ~~190~~200 countries and all countries and all
U.S. states. The pandemic is U.S. states. The pandemic is ~~having a noticeable impact on~~negatively affecting global economic growth global economic growth~~. Estimates so~~ beyond anything
James K. Jackson,
experienced in nearly a century. Estimates so far indicate the virus could trim global economic far indicate the virus could trim global economic ~~growth by as much as 2.0% per month if current~~
~~Coordinator~~
~~conditions persist and raise the risks of a global economic recession similar in magnitude to that~~
~~Specialist in International~~
~~experienced during the Great Depression of the 1930s~~ Coordinator growth by 3.0% to 6.0% in 2020, with a partial recovery in 2021, assuming there is not a second Specialist in International wave of infections. The economic fallout from the pandemic raises the risks of a global economic Trade and Finance recession with levels of unemployment not experienced since the Great Depression of the 1930s. The human costs in terms of lives lost will permanently affect global economic growth in Martin A. Weiss addition to the cost of rising levels of poverty, lives upended, careers derailed, and increased Specialist in International social unrest. Global trade could also fall by 13% to ~~. Global trade could also fall by 13% to~~
~~Trade and Finance~~
32%, depending on the depth and extent of 32%, depending on the depth and extent of ~~the global economic downturn~~ Trade and Finance the global economic downturn, exacting an especially heavy economic toll on trade-dependent developing and emerging economies. The full impact will ~~. The full impact will~~

not be known until the effects of the pandemic peak. This report provides an overview of the not be known until the effects of the pandemic peak. This report provides an overview of the
~~Martin A. Weiss~~
global economic costs to date and the global economic costs to date and the Andres B. Schwarzenberg response by governments and international institutions to response by governments and international institutions to
~~Specialist in International~~
~~address these effects.~~
~~Trade and Finance~~

~~Andres B. Schwarzenberg~~
address these effects. Analyst in International Analyst in International
Trade and Finance Trade and Finance

Rebecca M. Nelson
Specialist in International Specialist in International
Trade and Finance Trade and Finance

Congressional Research Service Congressional Research Service

Global Economic Effects of COVID-19

Overview
The World Health Organization (WHO) first declared COVID-19 a world health emergency in The World Health Organization (WHO) first declared COVID-19 a world health emergency in
January 2020. Since then, the emergency has evolved into a globalJanuary 2020. Since then, the emergency has evolved into a global public health and economic public health and economic
crisis that has affected the crisis that has affected the $90 trillion global economy beyond anything experienced in nearly a century. global economy beyond anything experienced in nearly a century.
Governments are attempting to balance often-competing policy objectives that include, but are Governments are attempting to balance often-competing policy objectives that include, but are
not limited to: not limited to:
 Confronting  Confronting ~~bal ooning~~ballooning budget deficits weighed against increasing spending to budget deficits weighed against increasing spending to
support unemployed workers and social safety nets; support unemployed workers and social safety nets;
 Providing financial support for national health systems that are under pressure to  Providing financial support for national health systems that are under pressure to
develop vaccines while also funding efforts to care for and safeguard citizens; develop vaccines while also funding efforts to care for and safeguard citizens;
and and
 Implementing monetary and fiscal policies that support credit markets and  Implementing monetary and fiscal policies that support credit markets and
sustain economic activity, while also assisting businesses under financial distress. sustain economic activity, while also assisting businesses under financial distress.
Policymakers and financial and commodity market participants generally are hopeful of a global economic recovery in the third quarter of 2020, assuming there is not a second wave of infections. Some forecasts, however, raise the prospects that the pandemic could negatively affect global economic growth for a considerable period of time with a slow, drawn-out recovery. Differences in policy approaches Differences in policy approaches ~~are also threatening to impair~~between countries are threatening to inflict longer-term damage to the global economy by impairing international political, trade, and international political, trade, and
economic relations, particularly between countries that promote nationalism and those that argue economic relations, particularly between countries that promote nationalism and those that argue
for a coordinated international responsefor a coordinated international response to the pandemic. Policy differences are also straining relations between . Policy differences are also straining relations between
developed and developing economies and between northern and southern members of the developed and developing economies and between northern and southern members of the
Eurozone, Eurozone, ~~chal enging al iances~~ challenging alliances and conventional concepts of national security, and raising and conventional concepts of national security, and raising
questions about the future of global questions about the future of global leadership. In some countries, the pandemic has elevated the importance of public health as a national security issue and as a national economic priority on a par with traditional national security concerns such as terrorism, cyberattacks, and proliferation of weapons of mass destruction.1~~leadership.~~ The pandemic-related economic and human costs The pandemic-related economic and human costs
could have long-term repercussions for economies through the tragic loss of life and job losses could have long-term repercussions for economies through the tragic loss of life and job losses
that derail careers and permanently shutter that derail careers and permanently shutter businesses. Fiscal and monetary measures implemented to prevent a financial crisis and sustain economic activity may also inadvertently be adding to income and wealth disparities. Within some countries, the economic fallout is widening racial and socio-economic cleavages and increasing social unrest. ~~businesses.~~ In speaking about these costs for In speaking about these costs for
Americans, Federal Reserve Chairman Americans, Federal Reserve Chairman ~~Powel~~ Powell said on May 19, 2020, said on May 19, 2020,
Since the pandemic arrived in force just two months ago, more than 20 million people have Since the pandemic arrived in force just two months ago, more than 20 million people have
lost their jobs, reversing nearly 10 years of job gains. This precipitous drop in economic lost their jobs, reversing nearly 10 years of job gains. This precipitous drop in economic
activity has caused a level of pain that is hard to capture in words, as lives are upended activity has caused a level of pain that is hard to capture in words, as lives are upended
amid great uncertainty about the future.amid great uncertainty about the future.12 1 Harris, Shane and Missy Ryan, To Prepare for the Next Pandemic, the U.S. Needs to Change its National Security Priorities, Experts Say, The Washington Post, June 16, 2020. https://www.washingtonpost.com/national-security/to-prepare-for-the-next-pandemic-the-us-needs-to-change-its-national-security-priorities-experts-say/2020/06/16/b99807c0-aa9a-11ea-9063-e69bd6520940_story.html. 2 Powell, Jerome H. Coronavirus and CARES Act, Testimony before the Committee on Banking, Housing and Urban Affairs, U.S. Senate, May 19, 2020. Congressional Research Service 1 Global Economic Effects of COVID-19
The virus was first diagnosed in Wuhan, China, but has been detected in over 200 countries and The virus was first diagnosed in Wuhan, China, but has been detected in over 200 countries and
al all U.S. states.U.S. states.23 In early March 2020, the focal point of infections shifted from China to Europe, In early March 2020, the focal point of infections shifted from China to Europe,
~~especial y~~especially Italy, but by April, the focus had shifted to the United States, where the number of Italy, but by April, the focus had shifted to the United States, where the number of
infections was accelerating. The infection has sickened more than infections was accelerating. The infection has sickened more than ~~6.1 mil ion~~8.3 million people, about one- people, about one-
third in the United States, with third in the United States, with ~~nearly 370~~over 440,000 fatalities. ,000 fatalities. ~~More~~At one point, more than 80 countries than 80 countries ~~have~~ had closed their closed their
borders to arrivals from countries with infections, ordered businesses to close, instructed their borders to arrivals from countries with infections, ordered businesses to close, instructed their
populations to self-quarantine, and closed schools to an estimated 1.5 populations to self-quarantine, and closed schools to an estimated 1.5 ~~bil ion children.3~~
billion children.4 Over the Over the ~~ten~~thirteen-week period from mid-March to -week period from mid-March to ~~late May 2020, more than 40.8 mil ion~~mid-June, 2020, about 46 million Americans Americans
filed for unemployment insurance.filed for unemployment insurance.45 On May 8, 2020, the Bureau of Labor Statistics (BLS) On May 8, 2020, the Bureau of Labor Statistics (BLS)

~~1 Powell, Jerome H. Coronavirus and CARES Act, T estimony before the Committee on Banking, Housing and Urban~~
~~Affairs, U.S. Senate, May 19, 2020.~~
~~2 “Mapping the Spread of the COVID-19 in the U.S. and Worldwide,”~~ reported that 20 million Americans lost their jobs in April 2020, pushing the total number of unemployed Americans to 23 million,6 out of a total civilian labor force of 158 million. The increase pushed the national unemployment rate to 14.7% (with some caveats), the highest since the Great Depression of the 1930s.7 On June 6, BLS reported that nonfarm employment increased by 2.5 million in May, reducing the total number of unemployed Americans to 21 million8 and pushing the unemployment rate down to 13.5%, again with some caveats.9 Preliminary data also indicate that U.S. GDP fell by 5.0% in the first quarter of 2020, the largest quarterly decline in GDP since the fourth quarter of 2008 during the global financial crisis.10 In its May 27 Beige Book analysis, the Federal Reserve reported that economic activity had fallen sharply in each of the 12 Federal Reserve districts.11 In Europe, over 30 million people in Germany, France, the UK, Spain, and Italy have applied for state support of their wages, while first quarter 2020 data indicate the Eurozone economy contracted by 3.8% at an annual rate, the largest quarterly decline since the series began in 1995.12 Industrial production across the Eurozone as a whole fell by 17% in April, raising the 3 “Mapping the Spread of the COVID-19 in the U.S. and Worldwide,” Washington Post Staff, Washington Post Staff, Washington Post, March , March
4, 2020. https://www.washingtonpost.com/world/2020/01/22/mapping-spread-new-COVID-19/?arc404=true.4, 2020. https://www.washingtonpost.com/world/2020/01/22/mapping-spread-new-COVID-19/?arc404=true.
~~3 “T he~~4 “The Day the World Stopped: How Governments Are Still Day the World Stopped: How Governments Are Still ~~Struggling~~ Struggling to Get Ahead of the COVID-19,” to Get Ahead of the COVID-19,” The
~~Econom ist~~Economist, March 17, 2020. https://www.economist.com/international/2020/03/17/governments-are-still-struggling-to-, March 17, 2020. https://www.economist.com/international/2020/03/17/governments-are-still-struggling-to-
get-ahead-of-the-COVID-19. get-ahead-of-the-COVID-19.
4 5 Unemployment Insurance Weekly Claims, Department of Labor, , Department of Labor, ~~May 28~~June 18, 2020. https://www.dol.gov/;, 2020. https://www.dol.gov/; Romm, Romm, ~~T ony~~Tony
and Jeff Stein, 2,4 Million Americans Filedand Jeff Stein, 2,4 Million Americans Filed ~~Jobless~~ Jobless Claims Last WeekClaims Last Week , Bringing Nine Week , Bringing Nine Week ~~T otal~~Total to 38.6 Million, to 38.6 Million, The
Washington Post, May 21, 2020. https://www.washingtonpost.com/business/2020/05/21/unemployment-claims- May 21, 2020. https://www.washingtonpost.com/business/2020/05/21/unemployment-claims-
~~Congressional Research Service~~

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~~Global Economic Effects of COVID-19~~

~~reported that 20 mil ion Americans lost their jobs in April 2020, pushing the total number of~~
~~unemployed Americans to 23 mil ion,5 out of a total civilian labor force of 156 mil ion. The~~
~~increase pushed the national unemployment rate to 14.7%, the highest since the Great Depression~~
~~of the 1930s.6 Preliminary data also indicate that U.S. GDP fell by 5.0% in the first quarter of~~
~~2020, the largest quarterly decline in GDP since the fourth quarter of 2008 during the global~~
~~financial crisis.7 In its May 27 Beige Book analysis, the Federal Reserve reported that economic~~
~~activity had fal en sharply in each of the 12 Federal Reserve districts.8~~
~~In Europe, over 30 mil ion people in Germany, France, the UK, Spain, and Italy have applied for~~
~~state support of their wages, while first quarter 2020 data indicate that the Eurozone economy~~
~~contracted by 3.8% at an annual rate, the largest quarterly decline since the series started in 1995.9~~
~~The European Commission’s May 6, 2020 forecast projected that EU economic growth in 2020~~
~~could contract by 7.4% and only partial y recover in 2021.10~~coronavirus/ 6 This total does not include 10.9 million workers who were working part time not by choice and 9.9 million individuals who were seeking employment. 7 The Employment Situation-April 2020, Bureau of Labor Statistics, May 8, 2020. https://www.bls.gov/. 8 This total does not include 10.6 million workers who were working part time not by choice and 9.4 million individuals who were seeking employment. 9 The Employment Situation-May 2020, Bureau of Labor Statistics, June 5, 2020, https://www.bls.gov/. BLS indicated that some individuals were miss-classified in April and May. Instead of being classified as unemployed, they were miss-classified as employed, but absent from work due to coronavirus-related business closures. If such individuals had been classified as unemployed, the unemployment rate would have been 3 percentage points higher. 10 Gross Domestic Product, First Quarter 2020 (Second Estimate), Bureau of Economic Analysis, May 28, 2020. https://www.bea.gov/data/gdp/gross-domestic-product. 11 The Beige Book, Federal Reserve System, May 27, 2020. https://www.federalreserve.gov/monetarypolicy/beige-book-default.htm. 12 Stott, Michael, Coronavirus Set to Push 29m Latin Americans Into Poverty, Financial Times, April 24, 2020. https://www.ft.com/content/3bf48b80-8fba-410c-9bb8-31e33fffc3b8; Hall, Benjamin, Coronavirus Pandemic Threatens Livelihoods of 59m European Workers, Financial Times, April 19, 2020, https://www.ft.com/content/ Congressional Research Service 2 Global Economic Effects of COVID-19 annual decline to 28%, surpassing the contraction experienced during the global financial crisis.13 The European Commission’s May 6, 2020 forecast projected that EU economic growth in 2020 could contract by 7.4% and only partially recover in 2021.14 On May 27, 2020, however, On May 27, 2020, however,
European Central Bank (ECB) President Christine Lagarde characterized that forecast as outdated European Central Bank (ECB) President Christine Lagarde characterized that forecast as outdated
and warned that the Eurozone economy could contact by 8% to 12% in 2020, a level of damage and warned that the Eurozone economy could contact by 8% to 12% in 2020, a level of damage
to the Eurozone economy that Lagarde characterized as being unsurpassed in peace time.to the Eurozone economy that Lagarde characterized as being unsurpassed in peace time.1115
Foreign investors have pulled an estimated $26 Foreign investors have pulled an estimated $26 ~~bil ion~~ billion out of developing Asian economies not out of developing Asian economies not
including more than $16 including more than $16 ~~bil ion~~ billion out of India, increasing concerns about a major economic out of India, increasing concerns about a major economic
recession in Asia. Some estimates indicate that 29 recession in Asia. Some estimates indicate that 29 ~~mil ion~~ million people in Latin America could people in Latin America could ~~fal~~ fall into into
poverty, reversing a decade of efforts to narrow income inequality.poverty, reversing a decade of efforts to narrow income inequality. Economic Policy Responses
After a delayed response, central banks and monetary authorities are engaging in an ongoing After a delayed response, central banks and monetary authorities are engaging in an ongoing
series of interventions in financial markets and national governments are announcing fiscal policy series of interventions in financial markets and national governments are announcing fiscal policy
initiativesinitiatives to stimulate their economies. International organizations are also taking steps to to stimulate their economies. International organizations are also taking steps to
provide loans and other financial assistance to countries in need. These and other actions have provide loans and other financial assistance to countries in need. These and other actions have
been labeledbeen labeled “unprecedented,” a term that has been used frequently to describe the pandemic and “unprecedented,” a term that has been used frequently to describe the pandemic and
the policy responses. the policy responses.
As one measure of the global fiscal and monetary responses, the International Monetary Fund As one measure of the global fiscal and monetary responses, the International Monetary Fund
(IMF) estimated that government spending and revenue measures to sustain economic activity (IMF) estimated that government spending and revenue measures to sustain economic activity
adopted through mid-April 2020 amounted to $3.3 adopted through mid-April 2020 amounted to $3.3 ~~tril ion~~trillion and that loans, equity injections and and that loans, equity injections and
guarantees totaled an additionalguarantees totaled an additional ~~$4.5 tril ion.12~~ $4.5 trillion.16 The IMF also estimated that the increase in The IMF also estimated that the increase in
borrowing by governments borrowing by governments ~~global y~~globally could rise from 3.7% of global gross domestic product (GDP) in 2019 to 9.9% in 2020, as indicated in Figure 1. Among developed economies, the fiscal balance to GDP ratio is projected to rise from 3.0% in 2019 to 10.7% in 2020; the ratio for the United States is projected to rise from 5.8% to 15.4%, the highest ratio for any country or region.17 According to the IMF, France, Germany, Italy, Japan, and the United Kingdom have each announced public sector support measures that total more than 10% of their annual GDP.18 For developing economies, the fiscal balance to GDP ratio is projected to rise from 4.8% to 9.1%, significantly increasing their debt burden and raising prospects of defaults or debt rescheduling.19 According to some estimates, the most fiscally vulnerable countries are: Argentina, Venezuela, Lebanon, Jordan, Iran, Zambia, Zimbabwe, and South Africa.20 ~~could rise from 3.7% of global gross domestic product~~

~~coronavirus/~~
~~5 T his total does not include 10.9 million workers who were working part time not by choice and 9.9 million~~
~~individuals who were seeking employment.~~
~~6 The Employment Situation-April 2020, Bureau of Labor Statistics, May 8, 2020. https://www.bls.gov/.~~
~~7 Gross Domestic Product, First Quarter 2020 (Second Estimate), Bureau of Economic Analysis, May 28, 2020.~~
~~https://www.bea.gov/data/gdp/gross-domestic-product .~~
~~8 The Beige Book, Federal Reserve System, May 27, 2020. https://www.federalreserve.gov/monetarypolicy/beige-book-~~
~~default.htm.~~
~~9 Stott, Michael, Coronavirus Set to Push 29m Latin Americans Into Poverty, Financial Times, April 24, 2020.~~
~~https://www.ft.com/content/3bf48b80-8fba-410c-9bb8-31e33fffc3b8; Hall, Benjamin, Coronavirus Pandemic~~
~~T hreatens Livelihoods of 59m European Workers, Financial Tim es, April 19, 2020, https://www.ft.com/content/~~
36239c82-84ae-4cc9-89bc-8e71e53d6649, Romei, Valentina and Martin Arnold, Eurozone Economy Shrinks by 36239c82-84ae-4cc9-89bc-8e71e53d6649, Romei, Valentina and Martin Arnold, Eurozone Economy Shrinks by
Fastest Rate on Record, Fastest Rate on Record, Financial ~~Tim es~~Times, April 30, 2020, https://www.ft.com/content/dd6cfafa-a56d-48f3-a9fd-, April 30, 2020, https://www.ft.com/content/dd6cfafa-a56d-48f3-a9fd-
aa71d17d49a8. aa71d17d49a8.
10 13 Arnold, Martin, Eurozone Industrial Production Falls by Record 17.1% in April, Financial Times, June 12, 2020. https://www.ft.com/content/e3301cd6-27ce-35f0-829a-c6613849b378, 14 European Economic Forecast Spring 2020, European Commission, May 2020. , European Commission, May 2020.
1115 Arnold, Martin, Coronavirus Hit to Eurozone Economy Set to Dwarf Financial Crisis, Arnold, Martin, Coronavirus Hit to Eurozone Economy Set to Dwarf Financial Crisis, Financial Times, May 27, , May 27,
2020. https://www.ft.com/content/a01424e8-089d-4618-babe-72f88184ac57. 2020. https://www.ft.com/content/a01424e8-089d-4618-babe-72f88184ac57.
1216 Global Financial Stability Report, International Monetary Fund, April 14, 2020. P. 2; , International Monetary Fund, April 14, 2020. P. 2;
~~Congressional Research Service~~

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~~Global Economic Effects of COVID-19~~

~~(GDP) in 2019 to 9.9% in 2020, as indicated in Figure 1. Among developed economies, the fiscal~~
~~balance to GDP ratio is projected to rise from 3.0% in 2019 to 10.7% in 2020; the ratio for the~~
~~United States is projected to rise from 5.8% to 15.4%. According to the IMF, France, Germany,~~
~~Italy, Japan, and the United Kingdom have each announced public sector support measures that~~
~~total more than 10% of their annual GDP.13 For developing economies, the fiscal balance to GDP~~
~~ratio is projected to rise from 4.8% to 9.1%, significantly increasing their debt burden and raising~~
~~prospects of defaults or debt rescheduling.14 According to some estimates, the most fiscal y~~
~~vulnerable countries are: Argentina, Venezuela, Lebanon, Jordan, Iran, Zambia, Zimbabwe, and~~
~~South Africa.15~~17 Fiscal Monitor, Statistical Appendix, International Monetary Fund, April 14, 2020, p. 90. 18 Fiscal Monitor, International Monetary Fund, April 14, 2020, p. 2. 19 Ibid, p. 6. 20 Wheatley, Jonathan, Tommy Stubbington, Michael Stott, Andrew England, and Joseph Cotterill, Debt Relief: Which Countries Are Most Vulnerable? Financial Times, May 6, 2020. https://www.ft.com/content/31ac88a1-9131-4531-99be-7bfd8394e8b9. Congressional Research Service 3 Global Economic Effects of COVID-19
Figure 1. IMF Projected Government Fiscal Balances Relative to GDP
In percentage shares of Gross Domestic Product In percentage shares of Gross Domestic Product

Source: Fiscal Monitor,, Statistical Appendix, International Monetary Fund, AprilInternational Monetary Fund, April 14, 202014, 2020, p. 90. Created by CRS. . Created by CRS.
Notes: Data for 2020 are estimates. Data for 2020 are estimates.
Among central banks, the Federal Reserve has taken extraordinary steps not experienced since the Among central banks, the Federal Reserve has taken extraordinary steps not experienced since the
2008-2009 global financial crisis to address the growing economic effects of COVID-19. The 2008-2009 global financial crisis to address the growing economic effects of COVID-19. The
U.S. Congress also has approved historic fiscal spending packages. In other countries, U.S. Congress also has approved historic fiscal spending packages. In other countries,
governments governments ~~have~~ abandoned traditional borrowing caps to abandoned traditional borrowing caps to ~~sustain~~increase fiscal spending in order to sustain economic growth. Simultaneously, growth. Simultaneously,
central banks and monetary authorities have lowered interest rates and reserve requirements, central banks and monetary authorities have lowered interest rates and reserve requirements,
announced new financing facilities, relaxed capital buffers and, in some cases, countercyclical announced new financing facilities, relaxed capital buffers and, in some cases, countercyclical
capital buffers,capital buffers,1621 adopted after the 2008-2009 financial crisis, adopted after the 2008-2009 financial crisis, ~~potential y~~potentially freeing up an estimated freeing up an estimated
~~$5 tril ion~~ $5 trillion in funds.in funds.1722 Capital buffers were raised after the Capital buffers were raised after the financial crisis to assist banks in ~~financial crisis to assist banks in~~

~~13 Fiscal Monitor, International Monetary Fund, April 14, 2020, p. 2.~~
~~14 Ibid., p. 6.~~
~~15 Wheatley, Jonathan, T ommy Stubbington, Michael Stott, Andrew England, and Joseph Cotterill, Debt Relief: Which~~
~~Countries ae Most Vulnerable? Financial Tim es, May 6, 2020. https://www.ft.com/content/31ac88a1-9131-4531-99be-~~
~~7bfd8394e8b9.~~
~~16 Countercyclical capital buffers require banks to increase their capital buffers during periods of rapid growth in assets~~
~~(when they are making a lot of loans), to en sure they have sufficient capital to absorb losses during a recession.~~
Countercyclical Capital Buffers, Bank for International Settlements, April 3, 2020. https://www.bis.org/bcbs/ccyb/.
~~17 Arnold, Martin, “Regulators Free up $500bn Capital for Lenders to Fight Virus Storm,” Financial Times, April 7,~~
~~2020. https://www.ft.com/content/9a677506-a44e-4f69-b852-4f34018bc45f.~~
~~Congressional Research Service~~

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~~Global Economic Effects of COVID-19~~

absorbing losses and staying solvent during financial crises. In some cases, governments have absorbing losses and staying solvent during financial crises. In some cases, governments have
directed banks to freeze dividend payments and halt pay bonuses. directed banks to freeze dividend payments and halt pay bonuses.
On March 11, the WHO announced that the On March 11, the WHO announced that the viral outbreak was outbreak was ~~official y~~officially a pandemic, the highest level a pandemic, the highest level
of health emergency.of health emergency.1823 A growing list of economic indicators makes it clear that the outbreak is A growing list of economic indicators makes it clear that the outbreak is
negatively affecting global economic growth on a scale negatively affecting global economic growth on a scale ~~that has~~ not been experienced since at not been experienced since at
least the global financial crisis of 2008-2009.least the global financial crisis of 2008-2009.1924 Global trade and GDP are forecast to decline Global trade and GDP are forecast to decline
sharply, at least through the first half of 2020. The global pandemic is affecting a broad swath of sharply, at least through the first half of 2020. The global pandemic is affecting a broad swath of
internationalinternational economic and trade activities, from services economic and trade activities, from services ~~general y~~generally to tourism and hospitality, to tourism and hospitality,
medical supplies and other global value chains, consumer electronics, and financial markets to medical supplies and other global value chains, consumer electronics, and financial markets to
energy, transportation, food, and a range of social activities, to name a few. The health and energy, transportation, food, and a range of social activities, to name a few. The health and
economic crises could have a particularly negative impact on the economies of developing economic crises could have a particularly negative impact on the economies of developing
21 Countercyclical capital buffers require banks to increase their capital buffers during periods of rapid growth in assets (when they are making a lot of loans), to ensure they have sufficient capital to absorb losses during a recession. Countercyclical Capital Buffers, Bank for International Settlements, April 3, 2020. https://www.bis.org/bcbs/ccyb/. 22 Arnold, Martin, “Regulators Free up $500bn Capital for Lenders to Fight Virus Storm,” Financial Times, April 7, 2020. https://www.ft.com/content/9a677506-a44e-4f69-b852-4f34018bc45f. 23 Bill Chappell, “COVID-19: COVID-19 Is Now Officially a Pandemic, WHO Says,” National Public Radio, March 11, 2020, https://www.npr.org/sections/goatsandsoda/2020/03/11/814474930/COVID-19-COVID-19-is-now-officially-a-pandemic-who-says. 24 Mapping the Spread of the COVID-19. Congressional Research Service 4 Global Economic Effects of COVID-19 countries that are constrained by limited financial resources and where health systems could ~~countries that are constrained by limited financial resources and where health systems could~~
quickly become overloaded. quickly become overloaded.
Without a clear understanding of when the global health and economic effects may peak and a Without a clear understanding of when the global health and economic effects may peak and a
greater understanding of the impact on economies, forecasts must necessarily be considered greater understanding of the impact on economies, forecasts must necessarily be considered
preliminary. Similarly, estimates of when any recovery might begin and the speed of the recovery preliminary. Similarly, estimates of when any recovery might begin and the speed of the recovery
are speculative. Efforts to reduce social interaction to contain the spread of the virus are are speculative. Efforts to reduce social interaction to contain the spread of the virus are
disrupting the daily lives of most Americans and adding to the economic costs. Increasing rates of disrupting the daily lives of most Americans and adding to the economic costs. Increasing rates of
unemployment are raising the prospects of widespread social unrest and demonstrations in unemployment are raising the prospects of widespread social unrest and demonstrations in
developed economies where lost incomes and health insurance are threatening living standards developed economies where lost incomes and health insurance are threatening living standards
and in developing economies where populations reportedly are growing concerned over access to and in developing economies where populations reportedly are growing concerned over access to
basic necessities and the prospects of rising levels of poverty.basic necessities and the prospects of rising levels of poverty.2025 U.N. Secretary General Antonio U.N. Secretary General Antonio
Guterres argued in a video conference before the U.N. Security Council on April 10, 2020, that:Guterres argued in a video conference before the U.N. Security Council on April 10, 2020, that:
…[T]he pandemic also poses a significant threat to the maintenance of international peace …[T]he pandemic also poses a significant threat to the maintenance of international peace
and security—potentially leading to an increase in social unrest and violence that would and security—potentially leading to an increase in social unrest and violence that would
greatly undermine our ability to fight the disease.greatly undermine our ability to fight the disease.2126
Economic Forecasts
Global Growth
The economic situationThe economic situation, remains highly fluid remains highly fluid globally and for most countries and regions. . Uncertainty about the length and depth of the health Uncertainty about the length and depth of the health
crisis-related economic effects are fueling perceptions of risk and volatility in financial markets crisis-related economic effects are fueling perceptions of risk and volatility in financial markets
and corporate decision-making. In addition, uncertainties concerning the global pandemic and the and corporate decision-making. In addition, uncertainties concerning the global pandemic and the
effectiveness of public policies intended to effectiveness of public policies intended to ~~curtail its spread~~ contain its spread and prevent a second wave of infections are adding to market volatility.are adding to market volatility. In a In a
growing number of cases, corporations are postponing investment decisions, laying off workers growing number of cases, corporations are postponing investment decisions, laying off workers

~~18 Bill Chappell, “COVID-19: COVID-19 Is Now Officially a Pandemic, WHO Says,” National Public Radio, March~~
~~11, 2020, https://www.npr.org/sections/goatsandsoda/2020/03/11/814474930/COVID-19-COVID-19-is-now-officially-~~
~~a-pandemic-who-says.~~
~~19 Mapping the Spread of the COVID-19.~~
~~20 Sly, Liz, Stirrings of Unrest Around the World Could Portend T urmoil as Economies Collapse~~~~, The Washington~~
~~Post,~~ ~~April 19, 2020; Ingraham, Christopher, Coronavirus Recession Could Plunge T ens~~who previously had been furloughed, and in some cases filing for bankruptcy. Compounding the economic situation has been a historic drop in the price of crude oil that reflects the global decline in economic activity and prospects for disinflation, while also contributing to the decline of the global economy through various channels. On April 29, 2020, Federal Reserve Chairman Jerome Powell stated that the Federal Reserve would use its “full range of tools” to support economic activity as the U.S. economic growth rate dropped by 5.0% at an annual rate in the first quarter of 2020. In assessing the state of the U.S. economy, the Federal Open Market Committee released a statement indicating that, “The ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term.”27 Before the COVID-19 outbreak, the global economy was struggling to regain a broad-based recovery as a result of the lingering impact of growing trade protectionism, trade disputes among 25 Sly, Liz, Stirrings of Unrest Around the World Could Portend Turmoil as Economies Collapse, The Washington Post, April 19, 2020; Ingraham, Christopher, Coronavirus Recession Could Plunge Tens of Millions Into Poverty, New of Millions Into Poverty, New
Report Warns, Report Warns, The Washington Post, April 20, 2020. https://www.washingtonpost.com/business/2020/04/20/, April 20, 2020. https://www.washingtonpost.com/business/2020/04/20/
coronavirus-recession-could-plunge-tens-millions-into-poverty-new-report-warns/. coronavirus-recession-could-plunge-tens-millions-into-poverty-new-report-warns/.
2126 Secretary-General’s Remarks to the Security Council on the COVID-19 Pandemic, United Nations, April 9, 2020. , United Nations, April 9, 2020.
https://www.un.org/sg/en/content/sg/statement/2020-04-09/secretary-generals-remarks-the-security-council-the-covid-https://www.un.org/sg/en/content/sg/statement/2020-04-09/secretary-generals-remarks-the-security-council-the-covid-
19-pandemic-delivered. 19-pandemic-delivered.
~~Congressional Research Service~~

4

~~link to page 10 link to page 10 link to page 10~~ ~~Global Economic Effects of COVID-19~~

~~who previously had been furloughed, and in some cases filing for bankruptcy. Compounding the~~
~~economic situation is a historic drop in the price of crude oil that reflects the global decline in~~
~~economic activity and prospects for disinflation, while also contributing to the decline of the~~
~~global economy through various channels. On April 29, 2020, Federal Reserve Chairman Jerome~~
~~Powel stated that the Federal Reserve would use its “full range of tools” to support economic~~
~~activity as the U.S. economic growth rate dropped 5.0% at an annual rate in the first quarter of~~
~~2020. In assessing the state of the U.S. economy, the Federal Open Market Committee released a~~
~~statement indicating that, “The ongoing public health crisis wil weigh heavily on economic~~
~~activity, employment, and inflation in the near term, and poses considerable risks to the economic~~
~~outlook over the medium term.”22~~
~~The Organization for Economic Cooperation and Development (OECD) on March 2, 2020,~~
~~lowered its forecast of global economic growth by 0.5% for 2020 from 2.9% to 2.4%, based on~~
~~the assumption that the economic effects of the virus would peak in the first quarter of 202023 (see~~
Table 1). However, the OECD estimated that if the economic effects of the virus did not peak in
~~the first quarter, which is now apparent that it did not, global economic growth would increase by~~
~~1.5% in 2020. That forecast now seems to have been highly optimistic.~~
~~On March 23, 2020, OECD Secretary General Angel Gurria stated that:~~
~~The sheer magnitude of the current shock introduces an unprecedented complexity to~~
~~economic forecasting. The OECD Interim Economic Outlook, released on March 2, 2020,~~
~~made a first attempt to take stock of the likely impact of COVID-19 on global growth, but~~
~~it now looks like we have already moved well beyond even the more severe scenario~~
~~envisaged then…. [T]he pandemic has also set in motion a major economic crisis that wil~~
~~burden our societies for years to come.24~~
~~On March 26, 2020, the OECD revised its global economic forecast based on the mounting~~
~~effects of the pandemic and measures governments have adopted to contain the spread of the~~
~~virus. According to the updated estimate, the current containment measures could reduce global~~
~~GDP by 2.0% per month, or an annualized rate of 24%, approaching the level of economic~~
~~contraction not experienced since the Great Depression of the 1930s. The OECD estimates in~~
Table 1 wil be revised when the OECD releases updated country-specific data.
~~Labeling the projected decline in global economic activity as the “Great Lockdown,” the IMF~~
~~released its forecast on April 14, 2020. The IMF concluded that the global economy would~~
~~experience its “worst recession since the Great Depression, surpassing that seen during the global~~
~~financial crisis a decade ago.”25 In addition, the IMF estimated that the global economy could~~
~~decline by 3.0% in 2020, before growing by 5.8% in 2021; global trade is projected to fal in~~
~~2020 by 11.0% and oil prices are projected to fal by 42%, also shown in Table 1.26 This forecast~~
~~assumes the pandemic fades in the second half of 2020 and that containment measures can be~~
~~reversed quickly. The IMF also stated that many countries are facing a multi-layered crisis that~~
~~includes a health crisis, a domestic economic crisis, fal ing external demand, capital outflows, and~~

~~22 Federal Reserve Issues FOMC Statement, Board of Governors of the Federal Reserve System, April 29, 2020.~~
~~https://www.federalreserve.gov/newsevents/pressreleases/monetary20200429a.htm.~~
23 OECD Interim Economic Assessment: COVID-19: The World Economy at Risk27 Federal Reserve Issues FOMC Statement, Board of Governors of the Federal Reserve System, April 29, 2020. https://www.federalreserve.gov/newsevents/pressreleases/monetary20200429a.htm. Congressional Research Service 5 Global Economic Effects of COVID-19 major trading partners, falling commodity and energy prices, and economic uncertainties in Europe over the impact of the UK withdrawal from the European Union. Individually, each of these issues presented a solvable challenge for the global economy. Collectively, however, the issues weakened the global economy and reduced the available policy flexibility of many national leaders, especially among the leading developed economies. In this environment, COVID-19 could have an outsized impact. While the level of economic effects is becoming clearer, the response to the pandemic could have a significant and enduring impact on the way businesses organize their work forces, on global supply chains, and how governments respond to a global health crisis.28 The OECD Forecast The Organization for Economic Cooperation and Development (OECD) on June 10, 2020, released an updated forecast that projects global economic growth will decline by 6.0% to 7.6% in 2020, depending on whether there is a second wave of infections. This forecast reflects the OECD’s a high level of uncertainty about the course of the global economy over the remainder of 2020, because the pandemic is “a global public health crisis without precedent in living memory.” The OECD also concluded that, “The global economy is now experiencing the deepest recession since the Great Depression of the 1930s.” In addition, the OECD argued that the pandemic is fragmenting the global economy through a growing number of trade and investment restrictions and diverging policy approaches that are being implemented on a country-by-country basis. As a result of uncertainty concerning the course of the global economy over the remainder of 2020, the OECD produced two “equally likely scenarios:” one that assumes the current containment measures are successful in curtailing infections, and another that assumes there is a second wave of rapid contagion.29 Under both scenarios, the OECD estimates that the global economic recovery will be slow and gradual.30 The OECD also estimates that the average unemployment rate among OECD countries is projected to rise to 9.2% under a single wave scenario and 10.0% under the second wave scenario. Global trade is also projected to contract by 9.5% or 11.4% in 2020 under the single or second wave scenarios, respectively. The OECD projections in Table 1 reflect the single wave scenario.31 According to this scenario, global economic growth is projected to fall by 6.0% in 2020, but rise by 5.2% in 2021. In contrast, the OECD’s second wave scenario projects a global economic contraction of 7.6% in 2020 and a growth rate of 2.8% in 2021, delaying a return to full recovery until 2022, as indicated in Figure 2. The OECD forecast also indicates that economic growth among developed economies will be particularly weak in Europe, where the growth rate is projected to fall by 9.0% and 11.5% in 2020, reflecting the one and two-wave scenarios, respectively. Similarly, U.S. economic growth is projected to contract in 2020 by 7.3%, but rebound by 4.1% in 2021. Under the second wave scenario, however, U.S. economic growth is projected to fall by 8.5% in 2020, but rise by 1.9% in 2021. The UK is projected to experience a contraction in GDP growth in 2020 of 11.5%, or 14% 28 Rowland, Christopher and Peter Whoriskey, “U.S. Health System is Showing Why It’s Not Ready for a COVID-19 Pandemic,” Washington Post, March 4, 2020. https://www.washingtonpost.com/business/economy/the-us-health-system-is-showing-why-its-not-ready-for-a-COVID-19-pandemic/2020/03/04/7c307bb4-5d61-11ea-b29b-9db42f7803a7_story.html. 29 OECD Economic Outlook, Organization for Economic , Organization for Economic
Cooperation and Development. Cooperation and Development. ~~March 2, 2020.~~ June 10, 2020; p. 12. http://www.oecd.org/economic-outlook/#resources. http://www.oecd.org/economic-outlook/#resources.
24 COVID-19: Joint Actions to Win the War, 30 Ibid, p. 23. 31 Ibid, p. 13. Congressional Research Service 6 Global Economic Effects of COVID-19 under the second wave scenario, the largest estimated annual decline in economic growth of any country in 2020. Figure 2. Major Economic Forecasts Source: OECD Economic Outlook, Organization for Economic Cooperation and Development. June 10, 2020; World ~~Organization for Economic Cooperation and Development, March 23,~~
~~2020. https://www.oecd.org/COVID-19/#op-ed.~~
25 ~~World~~ Economic Outlook,, International Monetary Fund, April 14, 2020; Global Economic Prospects, World Bank Group, June 2020, Created by CRS. Note: The OECD has estimated rates of growth as a result of two scenarios, indicated as OECD1 and OECD2. The first scenario assumes there is a single wave of infections from COVID-19, while the second scenario estimates the effect of two-wave scenario. Table 1. OECD, IMF and World Bank ~~International Monetary Fund, April 14, 2020, p. v.~~
~~26 T he IMF database indicates that global GDP fell by 0.075% in 2009 during the height of the global financial crisis.~~
~~Congressional Research Service~~

5

~~Global Economic Effects of COVID-19~~

~~a collapse in commodity prices. In combination, these various effects are interacting in ways that~~
~~make forecasting difficult.~~
~~Table 1. OECD and IMF~~ Economic Forecasts
Percentage change in Real GDP Growth Percentage change in Real GDP Growth
OECD ~~March 2020~~June IMF April World Bank 2020 2020 June
~~IMF April~~ 2020

Projections

Projections Projections
2019 2019
2020 2020
2021 2021
2019 2019
2020 2020
2021 2021 2019 2020 2021

World World
2. 2.9%
~~2.4%~~
~~3.3%~~
~~World~~
~~2.9%~~
~~–3.0%~~
~~5.8%~~
~~G20~~
~~3.1~~
~~2.7~~
~~3.5~~
~~Adv. Economies~~
~~1.7~~
~~–6.1~~
~~4.5~~
~~Australia~~
~~1.7~~
~~1.8~~
~~2.6~~
~~United States~~
~~2.3~~
~~–5.9~~
~~4.7~~
~~Canada~~
~~1.6~~
~~1.3~~
~~1.9~~
~~Euro Area~~
~~1.2~~
~~–7.5~~
~~4.7~~
~~Euro area~~
~~1.2~~
~~0.8~~
~~1.2~~
~~Germany~~
~~0.6~~
~~–7.0~~
~~5.2~~
~~Germany~~
~~0.6~~
~~0.3~~
~~0.9~~
~~France~~
~~1.3~~
~~–7.2~~
~~4.5~~
~~France~~
~~1.3~~
~~0.9~~
~~1.4~~
~~Italy~~
~~0.3~~
~~–9.1~~
~~4.8~~
~~Italy~~
~~0.2~~
~~0.0~~
~~0.5~~
~~Spain~~
~~2.0~~
~~–8.0~~
~~4.3~~
~~Japan~~
~~0.7~~
~~0.2~~
~~0.7~~
~~Japan~~
~~0.7~~
~~–5.2~~
~~3.0~~
~~Korea~~
~~2.0~~
~~2.0~~
~~2.3~~
~~United Kingdom~~
~~1.4~~
~~–6.5~~
~~4.0~~
~~Mexico~~
~~-0.1~~
~~0.7~~
~~1.4~~
~~Canada~~
~~1.6~~
~~–6.2~~
~~4.2~~
~~Turkey~~
~~0.9~~
~~2.7~~
~~3.3~~
~~China~~
~~6.1~~
~~1.2~~
~~9.2~~
~~United Kingdom~~
~~1.4~~
~~0.8~~
~~0.8~~
~~India~~
~~4.2~~
~~1.9~~
~~7.4~~
~~United States~~
~~2.3~~
~~1.9~~
~~2.1~~
~~Russia~~
~~1.3~~
~~–5.5~~
~~3.5~~
~~Argentina~~
~~-2.7~~
~~-2.0~~
~~0.7~~
~~Latin America~~
~~0.1~~
~~–5.2~~
~~3.4~~
~~Brazil~~
~~1.1~~
~~1.7~~
~~1.8~~
~~Brazil~~
~~1.1~~
~~–5.3~~
~~2.9~~
~~China~~
~~6.1~~
~~4.9~~
~~6.4~~
~~Mexico~~
~~–0.1~~
~~–6.6~~
~~3.0~~
~~India~~
~~4.9~~
~~5.1~~
~~5.6~~
~~Middle East~~
~~1.2~~
~~–2.8~~
~~4.0~~
~~Indonesia~~
~~5.0~~
~~4.8~~
~~5.1~~
~~Saudi Arabia~~
~~0.3~~
~~–2.3~~
~~2.9~~
~~Sub-Saharan~~
~~Russia~~
~~1.0~~
~~1.2~~
~~1.3~~
~~Africa~~
~~3.1~~
~~–1.6~~
~~4.1~~
~~Saudi Arabia~~
~~0.0~~
~~1.4~~
~~1.9~~
~~Nigeria~~
~~2.2~~
~~–3.4~~
~~2.4~~
~~South Africa~~
~~0.3~~
~~0.6~~
~~1.0~~
~~South Africa~~
~~0.2~~
~~–5.8~~
~~4.0~~
~~World Trade~~
~~Volume~~
~~0.9~~
~~–11.0~~
~~8.4~~

~~Oil prices ($)~~
~~–10.2~~
~~–42.0~~
~~6.3~~
~~Source: OECD Interim Economic Assessment: COVID-19: The World Economy at Risk~~7% -6.0% 5.2% World 2.9% –3.0% 5.8% World 2.4% -5.2% 4.2% Adv. Adv. Adv. Economies 1.7 -7.5 4.8 Economies 1.7 –6.1 4.5 Economies 1.6 -7.0 3.9 United United Australia 1.8 -5.0 4.1 States 2.3 –5.9 4.7 States 2.3 -6.1 4.0 Congressional Research Service 7 Global Economic Effects of COVID-19 OECD June IMF April World Bank 2020 2020 June 2020 Projections Projections Projections 2019 2020 2021 2019 2020 2021 2019 2020 2021 Canada 1.7 -8.0 3.9 Euro Area 1.2 –7.5 4.7 Euro Area 1.2 -9.1 4.5 Euro area 1.3 -9.1 6.5 Germany 0.6 –7.0 5.2 Japan 0.7 -6.1 2.5 Germany 0.6 -6.6 5.8 France 1.3 –7.2 4.5 Emerging 3.5 -2.5 4.6 France 1.5 -11.4 7.4 Italy 0.3 –9.1 4.8 E. Asia 5.9 0.5 6.6 Italy 0.3 -11.3 7.7 Spain 2.0 –8.0 4.3 China 6.1 1.0 6.9 Japan 0.7 -6.0 2.1 Japan 0.7 –5.2 3.0 Indonesia 5.0 0.0 4.8 United Thailand 2.4 -5.0 4.1 Korea 2.0 -1.2 3.1 Kingdom 1.4 –6.5 4.0 Mexico -0.1 -7.5 3.0 Canada 1.6 –6.2 4.2 Cen. Asia 2.2 -4.7 3.6 Turkey 0.9 -4.8 4.3 China 6.1 1.2 9.2 Russia 1.3 -6.0 2.7 United Kingdom 1.4 -11.5 9.0 India 4.2 1.9 7.4 Turkey 0.9 -3.8 5.0 United States 2.3 -7.3 4.1 Russia 1.3 –5.5 3.5 Poland 4.1 -4.2 2.8 Latin Argentina -2.2 -8.3 4.1 America 0.1 –5.2 3.4 Brazil 1.1 -8.0 2.2 Brazil 1.1 -7.4 4.2 Brazil 1.1 –5.3 2.9 Mexico -0.3 -7.5 3.0 China 6.1 -2.6 6.8 Mexico –0.1 –6.6 3.0 Argentina -2.2 -7.3 2.1 India 4.2 -3.7 7.9 Mid. East 1.2 –2.8 4.0 Mid. East -0.2 -4.2 2.3 Saudi Saudi Indonesia 5.0 -2.8 5.2 Arabia 0.3 –2.3 2.9 Arabia 0.3 -3.8 2.5 S. Africa 0.2 -7.5 2.5 Africa 3.1 –1.6 4.1 Iran -8.2 -5.3 2.1 Nigeria 2.2 –3.4 2.4 Egypt 5.6 3.0 2.1 S. Africa 0.2 –5.8 4.0 S. Asia 4.7 -2.7 2.8 World India 4.2 -3.2 3.1 Trade Volume 0.9 –11.0 8.4 Oil prices Pakistan 1.9 -2.6 -0.2 ($) –10.2 –42.0 6.3 Bangladesh 8.2 1.6 1.0 Africa 2.2 -2.8 3.1 Nigeria 2.2 -3.2 1.7 S. Africa 0.2 -7.1 2.9 Angola -0.9 -4.0 3.1 Source: OECD Economic Outlook, Organization for Economic , Organization for Economic
Cooperation and Development.Cooperation and Development. ~~March 2~~ June 10, 2020, 2020,; p. p. 212.; ; World Economic Outlook, International Monetary Fund, April International Monetary Fund, April
14, 2020, p. ix14, 2020, p. ix.
~~Advanced economies as a group are forecast to experience an economic contraction in 2020 of~~
~~7.8% of GDP, with the U.S. economy projected by the IMF to decline by 5.9%, about twice the~~
~~rate of decline experienced in 2009 during the financial crisis, as indicated in Figure 2. The rate~~
~~of economic growth in the Euro area is projected to decline by 7.5% of GDP. Most developing~~; Global Economic Prospects, World Bank Group, June 2020, p. 4.
Congressional Research Service Congressional Research Service

6

8 Global Economic Effects of COVID-19 Note: The OECD forecast includes a single-wave scenario and a double-wave scenario in which the pandemic remains under control and recedes and another in which there is a second wave of the pandemic, The OECD forecast numbers is this table reflect the single-wave scenario. Among developing and emerging economies, the economic downturn is projected to most negatively affect countries that rely on commodity exports to support annual economic growth. In addition to lower prices for commodity exports and reduced global demand for exports, developing countries will be negatively affected by reduced remittances, weaker currencies and tighter financial conditions. The OECD also concluded that:  Real per capita income in 2020 is projected to decline by 8% and 9.5%, respectively, depending on a one- or two-wave contagion, with substantial declines in all economies. Even with an economic recovery in 2021, real per capita income is projected to rise to only that of 2013.  Unemployment is projected to rise to its highest level in more than 25 years, while the average unemployment rate is projected to rise to 9.2% and 10%, respectively under a single or second-wave scenario and fall by only one percentage point through 2021. The OECD concludes that, “scarring effects from job losses are likely to be felt particularly by younger workers and lower-skilled workers, with attendant risks of many people becoming trapped in joblessness for an extended period.”  Net productive investment (business and government) was weak prior to the pandemic, falling behind the average rate of investment during the previous decade. Investment was forecast to contract by half as a percent of real GDP, falling from 4.7% to 2.3% and 2.0%, respectively for the one-wave and two-wave scenarios and increasing the risk of entrenched weak economic growth. Investment is also expected to be negatively affected by bankruptcies and insolvencies among corporations and financial institutions.32 The OECD estimated in its March 2020 forecast

~~Global Economic Effects of COVID-19~~

~~and emerging economies are projected to experience a decline in the rate of economic growth of~~
~~2.0%, reflecting tightening global financial conditions and fal ing global trade and commodity~~
~~prices. In contrast, China, India, and Indonesia are projected to experience smal , but positive~~
~~rates of economic growth in 2020. The IMF also argues that recovery of the global economy~~
~~could be weaker than projected as a result of: lingering uncertainty about possible contagion, lack~~
~~of confidence, and permanent closure of businesses and shifts in the behavior of firms and~~
~~households.27~~
~~Figure 2. Gross Domestic Product, Percentage Change~~

Source: World Economic Outlook, International Monetary Fund, April 14, 2020. Created by CRS.
~~As a result of the various chal enges, the IMF qualified its forecast by arguing that:~~
~~A partial recovery is projected for 2021, with above trend growth rates, but the level of~~
~~GDP will remain below the pre-virus trend, with considerable uncertainty about the~~
~~strength of the rebound. Much worse growth outcomes are possible and maybe even likely.~~
~~This would follow if the pandemic and containment measures last longer, emerging and~~
~~developing economies are even more severely hit, tight financial conditions persist, or if~~
~~widespread scarring effects emerge due to firm closures and extended unemployment.28~~
~~Before the COVID-19 outbreak, the global economy was struggling to regain a broad-based~~
~~recovery as a result of the lingering impact of growing trade protectionism, trade disputes among~~
~~major trading partners, fal ing commodity and energy prices, and economic uncertainties in~~
~~Europe over the impact of the UK withdrawal from the European Union. Individual y, each of~~
~~these issues presented a solvable chal enge for the global economy. Collectively, however, the~~
~~issues weakened the global economy and reduced the available policy flexibility of many national~~
~~leaders, especial y among the leading developed economies. In this environment, COVID-19~~
~~could have an outsized impact. While the level of economic effects wil eventual y become~~
~~clearer, the response to the pandemic could have a significant and enduring impact on the way~~

~~27 World Economic Outlook, p. 9.~~
~~28 Ibid., p. v.~~
~~Congressional Research Service~~

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~~Global Economic Effects of COVID-19~~

~~businesses organize their work forces, on global supply chains, and how governments respond to~~
~~a global health crisis.29~~
~~The OECD estimates~~ that increased direct and indirect economic costs through global supply that increased direct and indirect economic costs through global supply
chains, reduced demand for goods and services, and declines in tourism and business travel mean chains, reduced demand for goods and services, and declines in tourism and business travel mean
that, “the adverse consequences of these developments for other countries (non-OECD) are that, “the adverse consequences of these developments for other countries (non-OECD) are
significant.”significant.”3033 Global trade, measured by trade volumes, slowed in the last quarter of 2019 and Global trade, measured by trade volumes, slowed in the last quarter of 2019 and
had been expected to decline further in 2020, as a result of weaker global economic activity had been expected to decline further in 2020, as a result of weaker global economic activity
associated with the pandemic, which is negatively affecting economic activity in various sectors, associated with the pandemic, which is negatively affecting economic activity in various sectors,
including airlines, hospitality, ports, and the shipping industry.including airlines, hospitality, ports, and the shipping industry.31
34 According to the OECD’sAccording to the OECD’s ~~updated~~ forecast: forecast:
 The greatest impact of the containment restrictions  The greatest impact of the containment restrictions ~~wil~~ will be on retailbe on retail and and
wholesale trade, and in professional and real estate services, although there are wholesale trade, and in professional and real estate services, although there are
notable differences between countries. notable differences between countries.
32 Ibid, p. 31. 33 OECD Interim Economic Assessment: COVID-19: The World Economy at Risk, Organization for Economic Cooperation and Development. March 2, 2020, p. 2. 34 Ibid., p. 4. Congressional Research Service 9 Global Economic Effects of COVID-19  Business closures could reduce economic output in advanced and major  Business closures could reduce economic output in advanced and major
emerging economies by 15% or more; other emerging economies could emerging economies by 15% or more; other emerging economies could
experience a decline in output of 25%.experience a decline in output of 25%.
 Countries dependent on tourism could be affected more severely, while countries  Countries dependent on tourism could be affected more severely, while countries
with large agricultural and mining sectors could experience less severe effects. with large agricultural and mining sectors could experience less severe effects.
 Economic effects likely  Economic effects likely ~~wil~~ will vary across countries reflecting differences in the vary across countries reflecting differences in the
timing and degree of containment measures. timing and degree of containment measures.32
35 In addition, the OECD In addition, the OECD ~~argues~~argued that China’s emergence as a global economic actor that China’s emergence as a global economic actor ~~marks~~marked a a
significant departure from previous global health episodes. China’s growth, in combination with significant departure from previous global health episodes. China’s growth, in combination with
globalizationglobalization and the interconnected nature of economies through capital flows, supply chains, and the interconnected nature of economies through capital flows, supply chains,
and foreign investment, magnify the cost of containing the spread of the virus through and foreign investment, magnify the cost of containing the spread of the virus through
quarantines and restrictions on labor mobility and travel.quarantines and restrictions on labor mobility and travel.3336 China’s global economic role and China’s global economic role and
globalizationglobalization mean that trade mean that trade ~~is playing~~has played a role in spreading the economic effects of COVID-19. a role in spreading the economic effects of COVID-19.
More broadly, the economic effects of the pandemic More broadly, the economic effects of the pandemic ~~are being~~were spread through three trade spread through three trade
channels: (1) directly through supply chains as reduced economic activity channels: (1) directly through supply chains as reduced economic activity is spread from spread from
intermediate goods producers to finished goods producers; (2) as a result of a drop intermediate goods producers to finished goods producers; (2) as a result of a drop ~~overal in~~
overall in economic activity, which economic activity, which ~~reduces~~reduced demand for goods in general, including imports; and (3) demand for goods in general, including imports; and (3)
through reduced trade with commodity exporters that through reduced trade with commodity exporters that ~~supply~~supplied producers, which, in turn, producers, which, in turn, ~~reduces~~
reduced their imports and negatively their imports and negatively ~~affects~~affected trade and economic activity of exporters. The IMF Forecast Labeling the projected decline in global economic activity as the “Great Lockdown,” the IMF released its forecast on April 14, 2020. The IMF concluded that the global economy would experience its “worst recession since the Great Depression, surpassing that seen during the global financial crisis a decade ago.”37 In addition, the IMF estimated that the global economy could decline by 3.0% in 2020, before growing by 5.8% in 2021; global trade was projected to fall in 2020 by 11.0% and oil prices were projected to fall by 42%, also shown in Table 1.38 According to this scenario, global economic growth is projected to fall by 6.0% in 2020, but rise by 5.2% in 2021. In contrast, the OECD’s single-wave scenario projects a global economic contraction of 7.6% in 2020 and a growth rate of 2.8% in 2021, delaying a return to full recovery until 2022 This forecast assumed the pandemic would fade in the second half of 2020 and that containment measures could be reversed quickly. The IMF also stated that many countries were facing a multi-layered crisis that included a health crisis, a domestic economic crisis, falling external demand, capital outflows, and a collapse in commodity prices. In combination, these various effects were interacting in ways that made forecasting difficult. Advanced economies as a group were forecast to experience an economic contraction in 2020 of 7.8% of GDP, with the U.S. economy projected by the IMF to decline by 5.9%, about twice the rate of decline experienced in 2009 during the financial crisis, as indicated in Figure 3. The rate of economic growth in the Euro area was projected to decline by 7.5% of GDP. Most developing 35 Evaluating the Initial Impact of COVID ~~trade and economic activity of exporters.~~

~~29 Rowland, Christopher and Peter Whoriskey, “U.S. Health System is Showing Why It’s Not Ready for a COVID-19~~
~~Pandemic,” Washington Post, March 4, 2020. https://www.washingtonpost.com/business/economy/the-us-health-~~
~~system-is-showing-why-its-not-ready-for-a-COVID-19-pandemic/2020/03/04/7c307bb4-5d61-11ea-b29b-~~
~~9db42f7803a7_story.html.~~
~~30 World Economic Outlook, p. 2.~~
~~31 Ibid., p. 4.~~
32 ~~Evaluating the Initial Impact of COVID~~ Containment Measures on Activity, Organization for Economic Cooperation , Organization for Economic Cooperation
and Development, March 27, 2020. and Development, March 27, 2020.
3336 Goldin, Goldin, Ian, “COVID-19 ShowsIan, “COVID-19 Shows ~~How~~ How Globalization SpreadsGlobalization Spreads Contagion of All Kinds,”Contagion of All Kinds,” Financial Times, March 2, , March 2,
2020. https://www.ft.com/content/70300682-5d33-11ea-ac5e-df00963c20e6. 2020. https://www.ft.com/content/70300682-5d33-11ea-ac5e-df00963c20e6.
~~Congressional Research Service~~

8

~~link to page 13~~ ~~Global Economic Effects of COVID-19~~

~~Global Trade~~
~~According to an April 8, 2020, forecast by the World Trade Organization (WTO), global trade~~
37 World Economic Outlook, International Monetary Fund, April 14, 2020, p. v. 38 The IMF database indicates that global GDP fell by 0.075% in 2009 during the height of the global financial crisis. Congressional Research Service 10 Global Economic Effects of COVID-19 and emerging economies were projected to experience a decline in the rate of economic growth of 2.0%, reflecting tightening global financial conditions and falling global trade and commodity prices. In contrast, China, India, and Indonesia were projected to experience small, but positive rates of economic growth in 2020. The IMF also argued that recovery of the global economy could be weaker than projected as a result of lingering uncertainty about possible contagion, lack of confidence, and permanent closure of businesses and shifts in the behavior of firms and households.39 Figure 3. IMF Forecast, Gross Domestic Product, Percentage Change Source: World Economic Outlook, International Monetary Fund, April 14, 2020. Created by CRS. As a result of the various challenges, the IMF qualified its forecast by arguing that: A partial recovery is projected for 2021, with above trend growth rates, but the level of GDP will remain below the pre-virus trend, with considerable uncertainty about the strength of the rebound. Much worse growth outcomes are possible and maybe even likely. This would follow if the pandemic and containment measures last longer, emerging and developing economies are even more severely hit, tight financial conditions persist, or if widespread scarring effects emerge due to firm closures and extended unemployment.40 The World Bank Forecast On June 8, the World Bank released its forecast for global economic growth that estimated the economic recession in 2020 would be the deepest since World War II. It also estimated that the global economic recession would affect 90% of the world’s economies, a percentage that is greater than what was experienced during the Great Depression.41 The World Bank’s baseline estimate indicates that global economic growth could decline by 5.2% in 2020 and only partially recover in 2021 with a 4.2% rate of growth, assuming that the global economy can begin recovering in the second half of 2020.42 In contrast, the IMF forecasted a 3.0% rate of decline in 2020 and a recovery of growth to 5.8% in 2021. Similar to the OECD and the IMF forecasts, the 39 World Economic Outlook, p. 9. 40 Ibid., p. v. 41 Global Economic Prospects, World Bank Group, June 8, 2020, p. 15. 42 Ibid, p. 5. Congressional Research Service 11 link to page 17 Global Economic Effects of COVID-19 World Bank argues that the economic impact of the global recession will fall most heavily on developing and emerging economies that rely on global trade, tourism, or remittances from abroad, and those that depend on commodity exports. In addition, the World Bank forecasted that most emerging and developing economies could experience rates of growth in 2020 that are the lowest overall since the 1960s, with 90% of such economies expected to experience contractions in per capita incomes and many millions of people falling back into poverty. The World Bank also forecasts that economic growth in advanced economies will decline by 7.0% in 2020 and recover to 3.8% in 2021. The United States, the Euro area and Japan are all estimated to experience a slower rate of growth in 2020 and rise at a smaller rate in 2021 than the IMF forecast. The global economic recession is projected to affect all regions in a type of synchronous downturn, with some regions faring worse than others. Differences in the magnitude of regional growth rates are attributed to the “scale of the domestic outbreak, vulnerability of the economy to spillovers from global economic and financial stress the severity of pre-existing challenges such as widespread poverty, and the degree to which debt levels constrain the fiscal response.”43 According to the Bank’s baseline scenario, the projected economic recovery is expected to be slow, reflecting shifts in consumption and work patterns as consumers attempt to rebuild savings and businesses strengthen balance sheets. The World Bank also issued a downside and an upside scenario in which government lockdown policies are required to remain in effect for a longer or a shorter period of time, respectively. The downside scenario projects a contraction in global economic growth of 8% in 2020, as lockdown procedures are assumed to last an additional three months, followed by a sluggish recovery. In contrast, the upside scenario projects a decline in economic activity in 2020 of 4%, based on the assumption that economic activity rebounds quickly in the third quarter of 2020.44 The Bank also concludes that global value chains (GVCs) have been important conduits through which macroeconomic developments associated with the pandemic have been transmitted across national borders. The economic effects of the pandemic have been spread through trade linkages but also amplified through quarantines, production shutdowns and border closures.45 Estimates by the World Bank indicate that national policies adopted to blunt the spread of the virus affect the global economy through four shocks: a decline in employment due to factory closures and social distancing, a trade shock as a result of an increase in the cost of traded goods, a tourism shock through a sharp contraction in international tourism, and a services shock. The magnitude of the shocks varies by country depending on various factors, including the composition of output, reliance on trade, and the level of GVC integration. Global Trade According to an April 8, 2020, forecast by the World Trade Organization (WTO), global trade volumes are projected to decline between 13% and 32% in 2020 as a result of the economic volumes are projected to decline between 13% and 32% in 2020 as a result of the economic
impact of COVID-19, as indicated iimpact of COVID-19, as indicated in Table 2. The WTO argues that the wide range in the The WTO argues that the wide range in the
forecast represents the high degree of uncertainty concerning the length and economic impact of forecast represents the high degree of uncertainty concerning the length and economic impact of
the pandemic and that the actual economic outcome could be outside this range, either higher or the pandemic and that the actual economic outcome could be outside this range, either higher or
lower. The WTO’s more optimistic scenario assumes that trade volumes recover quickly in the lower. The WTO’s more optimistic scenario assumes that trade volumes recover quickly in the
second half of 2020 to their pre-pandemic trend, or that the global economy experiences a V-second half of 2020 to their pre-pandemic trend, or that the global economy experiences a V-
43 Ibid, p. 115. 44 Ibid, p. 33. 45 Ibid, p. 118. Congressional Research Service 12 Global Economic Effects of COVID-19 shaped recovery. The more pessimistic scenario assumes shaped recovery. The more pessimistic scenario assumes there is a partial recovery that lasts into 2021, or a partial recovery that lasts into 2021, or
that global economic activity experiences more of a U-shaped recovery. The WTO concludes, that global economic activity experiences more of a U-shaped recovery. The WTO concludes,
however, that the impact on global trade volumes could exceed the drop in global trade during the however, that the impact on global trade volumes could exceed the drop in global trade during the
height of the 2008-2009 financial crisis.height of the 2008-2009 financial crisis.34
46 Table 2. WTO Forecast: Merchandise Trade Volume and Real GDP 2018-2021
Annual percentage change Annual percentage change
Optimistic
Pessimistic
Historical
scenario
scenario

2018 2018
2019 2019
2020 2020
2021 2021
2020 2020
2021 2021

Volume of world merchandise trade
2.9% 2.9%
-0.1% -0.1%
-12.9% -12.9%
21.3% 21.3%
-31.9% -31.9%
24.0% 24.0%
Exports

North America North America
3.8 3.8
1.0 1.0
-17.1 -17.1
23.7 23.7
-40.9 -40.9
19.3 19.3
South and Central America South and Central America
0.1 0.1
-2.2 -2.2
-12.9 -12.9
18.6 18.6
-31.3 -31.3
14.3 14.3
Europe Europe
2.0 2.0
0.1 0.1
-12.2 -12.2
20.5 20.5
-32.8 -32.8
22.7 22.7
Asia Asia
3.7 3.7
0.9 0.9
-13.5 -13.5
24.9 24.9
-36.2 -36.2
36.1 36.1
Other regions Other regions
0.7 0.7
-2.9 -2.9
-8.0 -8.0
8.6 8.6
-8.0 -8.0
9.3 9.3
Imports

North America North America
5.2 5.2
-0.4 -0.4
-14.5 -14.5
27.3 27.3
-33.8 -33.8
29.5 29.5
South and Central America South and Central America
5.3 5.3
-2.1 -2.1
-22.2 -22.2
23.2 23.2
-43.8 -43.8
19.5 19.5
Europe Europe
1.5 1.5
0.5 0.5
-10.3 -10.3
19.9 19.9
-28.9 -28.9
24.5 24.5
Asia Asia
4.9 4.9
-0.6 -0.6
-11.8 -11.8
23.1 23.1
-31.5 -31.5
25.1 25.1
Other regions Other regions
0.3 0.3
1.5 1.5
-10 -10
13.6 13.6
-22.6 -22.6
18.0 18.0
Real GDP at market exchange rates
2.9 2.9
2.3 2.3
-2.5 -2.5
7.4 7.4
-8.8 -8.8
5.9 5.9
North America North America
2.8 2.8
2.2 2.2
-3.3 -3.3
7.2 7.2
-9.0 -9.0
5.1 5.1
South and Central America South and Central America
0.6 0.6
0.1 0.1
-4.3 -4.3
6.5 6.5
-11 -11
4.8 4.8
Europe Europe
2.1 2.1
1.3 1.3
-3.5 -3.5
6.6 6.6
-10.8 -10.8
5.4 5.4
Asia Asia
4.2 4.2
3.9 3.9
-0.7 -0.7
8.7 8.7
-7.1 -7.1
7.4 7.4
Other regions Other regions
2.1 2.1
1.7 1.7
-1.5 -1.5
6.0 6.0
-6.7 -6.7
5.2 5.2
Source: Trade Set to Plunge as COVID-19 Pandemic Upends ~~Global Economy~~~~, World Trade Organization, April 8,~~
~~2020.~~

34 Trade Set to Plunge as COVID-19 Pandemic Upends Global Economy~~, World T rade~~ Global Economy, World Trade Organization, April 8, Organization, April 8, 2020. ~~2020.~~
~~https://www.wto.org/english/news_e/pres20_e/pr855_e.htm.~~
~~Congressional Research Service~~

9

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Note: Data for 2020 and 2021 are projections; GDP Data for 2020 and 2021 are projections; GDP projections are based on scenariosprojections are based on scenarios simulated with the simulated with the
WTO Global Trade Model. WTO Global Trade Model.
The estimates indicate that The estimates indicate that al all geographic regions geographic regions ~~wil~~ will experience a double-digit drop in trade experience a double-digit drop in trade
volumes, except for “other regions,” which consists of Africa, the Middle East, and the volumes, except for “other regions,” which consists of Africa, the Middle East, and the
Commonwealth of Independent States. North America and Asia could experience the steepest Commonwealth of Independent States. North America and Asia could experience the steepest
declines indeclines in export volumes. The forecast also projects that sectors with extensive value chains, export volumes. The forecast also projects that sectors with extensive value chains,
such as automobile products and electronics, could experience the steepest declines. Although such as automobile products and electronics, could experience the steepest declines. Although
services are not included in the WTO forecast, this segment of the economy could experience the services are not included in the WTO forecast, this segment of the economy could experience the
largest disruption as a consequence of restrictions on travel and transport and the closure of retail largest disruption as a consequence of restrictions on travel and transport and the closure of retail
46 Trade Set to Plunge as COVID-19 Pandemic Upends Global Economy, World Trade Organization, April 8, 2020. https://www.wto.org/english/news_e/pres20_e/pr855_e.htm. Congressional Research Service 13 Global Economic Effects of COVID-19 and hospitality establishments. Such services as information technology, however, are growing to and hospitality establishments. Such services as information technology, however, are growing to
satisfy the demand of employees who are working from home.satisfy the demand of employees who are working from home.
The pandemic is also raising questions The pandemic is also raising questions ~~concerning~~about the costs and benefits of the global supply the costs and benefits of the global supply
chains businesses erected over the past three decades. Evidence indicates that growth in supply chains businesses erected over the past three decades. Evidence indicates that growth in supply
chains had slowed prior to the pandemic, but there is little consensus on the long-term impact of chains had slowed prior to the pandemic, but there is little consensus on the long-term impact of
the crisis. In some cases, businesses are reassessing their exposure to the risks posed by extensive the crisis. In some cases, businesses are reassessing their exposure to the risks posed by extensive
supply chains that supply chains that ~~potential y~~potentially are vulnerable to numerous points of disruption. Also, some are vulnerable to numerous points of disruption. Also, some
governments are assessing the risks supply chains pose to national supplies of items considered to governments are assessing the risks supply chains pose to national supplies of items considered to
be be ~~of importance~~important to national security as a result of firms shifting production offshore. For to national security as a result of firms shifting production offshore. For
multinationalmultinational businesses, changing suppliers and shifting production locations can be businesses, changing suppliers and shifting production locations can be ~~especial y~~
especially costly for some firms and can introduce additional risks.costly for some firms and can introduce additional risks.3547 In addition, businesses may be In addition, businesses may be
reluctant to relocate from production locations, such as China, that not only serve as production reluctant to relocate from production locations, such as China, that not only serve as production
platforms, but are also important markets for their output. For instance, the Bureau of Economic platforms, but are also important markets for their output. For instance, the Bureau of Economic
AnalysisAnalysis (BEA) reports that 10% of the global sales of the majority-owned foreign affiliates of U.S. reports that 10% of the global sales of the majority-owned foreign affiliates of U.S.
parent companies is shipped back to the U.S. parent company. In contrast, 60% of such sales take parent companies is shipped back to the U.S. parent company. In contrast, 60% of such sales take
place in the foreign country where the affiliate is located and another 30% is shipped to other place in the foreign country where the affiliate is located and another 30% is shipped to other
foreign countries in close proximity. For China, about 6% of such sales are shipped to the U.S. foreign countries in close proximity. For China, about 6% of such sales are shipped to the U.S.
parent, while 82% is sold in China and another 12% is shipped to other foreign countries.parent, while 82% is sold in China and another 12% is shipped to other foreign countries.3648
Economic Policy Challenges
The The ~~chal enge~~challenge for policymakers has been one of implementing targeted policies that address what for policymakers has been one of implementing targeted policies that address what
had been expected to be short-term problems without creating distortions in economies that can had been expected to be short-term problems without creating distortions in economies that can
outlast the impact of the virus itself. Policymakers, however, are being overwhelmed by the outlast the impact of the virus itself. Policymakers, however, are being overwhelmed by the
quickly changing nature of the global health crisis that appears to be turning into a global trade quickly changing nature of the global health crisis that appears to be turning into a global trade
and economic crisis whose effects on the global economy are escalating. As the economic effects and economic crisis whose effects on the global economy are escalating. As the economic effects
of the pandemic grow, policymakers are giving more weight to policies that address the of the pandemic grow, policymakers are giving more weight to policies that address the
immediate economic effects at the expense of longer-term considerations such as debt immediate economic effects at the expense of longer-term considerations such as debt
accumulation. During the early stages of the crisis, many policymakers felt constrained in their accumulation. During the early stages of the crisis, many policymakers felt constrained in their
abilityability to respond to the crisis as a result of limited flexibilityto respond to the crisis as a result of limited flexibility for monetary and fiscal support for monetary and fiscal support
within conventional standards, given the broad-based synchronized slowdown in global economic within conventional standards, given the broad-based synchronized slowdown in global economic
growth, growth, ~~especial y~~especially in manufacturing and trade in manufacturing and trade, that had developed prior to the viral outbreak. The that had developed prior to the viral outbreak. The
pandemic is also affecting global politics as world leaders are pandemic is also affecting global politics as world leaders are ~~cancel ing~~cancelling international international meetings,49 competing for medical supplies, and some nations reportedly are stoking conspiracy theories that shift blame to other countries.50 Initially, the economic effects of the virus were expected to be short-term supply issues as factory output fell because workers were quarantined to reduce the spread of the virus through social interaction. The drop in economic activity, initially in China, has had international repercussions 47~~meetings,37~~

35 Beattie, Alan, Will Coronavirus Pandemic Finally Kill Off Global Beattie, Alan, Will Coronavirus Pandemic Finally Kill Off Global ~~Supply~~ Supply Chains?, Chains?, Financial Times, May 28, 2020. , May 28, 2020.
https://www.ft.com/content/4ee0817a-809f-11ea-b0fb-13524ae1056b. https://www.ft.com/content/4ee0817a-809f-11ea-b0fb-13524ae1056b.
3648 Activities of U.S. Multinational Enterprises: U.S. Parent Companies and Their Foreign Affiliates, Preliminary 2017
Statistics, Bureau, Bureau of Economic Analysis, Augustof Economic Analysis, August 23, 2019, 23, 2019, ~~T able~~Table II.E.2. https://www.bea.gov/news/2019/activities-us- II.E.2. https://www.bea.gov/news/2019/activities-us-
multinational-enterprises-2017. multinational-enterprises-2017.
~~37 T aylor~~ 49 Taylor, Adam, , Adam, ~~T eo~~Teo Armus, and Rick Noak, “ Armus, and Rick Noak, “ Live updates: COVID-19 Live updates: COVID-19 ~~T urmoil~~Turmoil Widens as U.S. Death Toll Mounts; Xi Cancels Japan Trip, Washington Post, March 5, 2020, https://www.washingtonpost.com/world/2020/03/05/COVID-19-live-updates/. 50 Shih, Gerry, “China Is Subtly Stoking COVID-19 Conspiracy Theories That Blame the U.S. for Outbreak,” Washington Post, March 5, 2020. https://www.washingtonpost.com/world/2020/03/05/COVID-19-live-updates/. Congressional Research Service 14 Global Economic Effects of COVID-19 ~~Widens as U.S. Death T oll Mounts;~~
~~Congressional Research Service~~

10

~~Global Economic Effects of COVID-19~~

~~competing for medical supplies, and some nations reportedly are stoking conspiracy theories that~~
~~shift blame to other countries.38~~
~~Initial y, the economic effects of the virus were expected to be short-term supply issues as factory~~
~~output fel because workers were quarantined to reduce the spread of the virus through social~~
~~interaction. The drop in economic activity, initial y in China, has had international repercussions~~
as firms experienced delays in supplies of intermediate and finished goods through supply chains. as firms experienced delays in supplies of intermediate and finished goods through supply chains.
Concerns are growing, however, that virus-related supply shocks Concerns are growing, however, that virus-related supply shocks ~~are creating~~have created more prolonged and more prolonged and
wide-ranging demand shocks as reduced activity by consumers and businesses leads to a lower wide-ranging demand shocks as reduced activity by consumers and businesses leads to a lower
rate of economic growth. As demand shocks unfold, businesses experience reduced activity and rate of economic growth. As demand shocks unfold, businesses experience reduced activity and
profits and profits and ~~potential y~~potentially escalating and binding credit and liquidity escalating and binding credit and liquidity constraints. While constraints. While
manufacturing firms are experiencing supply chain shocks, reduced consumer activity through manufacturing firms are experiencing supply chain shocks, reduced consumer activity through
social distancing is affecting the services sector of the economy, which accounts for two-thirds of social distancing is affecting the services sector of the economy, which accounts for two-thirds of
annual U.S. economic output. In this environment, manufacturing and services firms have tended annual U.S. economic output. In this environment, manufacturing and services firms have tended
to hoard cash, which affects market liquidity. In response, central banks have lowered interest to hoard cash, which affects market liquidity. In response, central banks have lowered interest
rates where possible and expanded lending facilities to provide liquidityrates where possible and expanded lending facilities to provide liquidity to financial markets and to financial markets and
to firms to firms ~~potential y~~potentially facing insolvency. facing insolvency.
The longer the economic effects persist, the greater the economic impacts are likely to be as the The longer the economic effects persist, the greater the economic impacts are likely to be as the
effects are spread through trade and financial linkages to an ever-broadening group of countries, effects are spread through trade and financial linkages to an ever-broadening group of countries,
firms and households. These growing economic effects firms and households. These growing economic effects ~~potential y~~potentially increase liquidity constraints increase liquidity constraints
and credit market tightening in global financial markets as firms hoard cash, with negative and credit market tightening in global financial markets as firms hoard cash, with negative ~~fal out~~fallout
effects on economic growth. At the same time, financial markets are factoring in an increase in effects on economic growth. At the same time, financial markets are factoring in an increase in
government bond issuance in the United States, Europe, and elsewhere as government debt levels government bond issuance in the United States, Europe, and elsewhere as government debt levels
are set to rise to meet spending obligations during an expected economic recession and increased are set to rise to meet spending obligations during an expected economic recession and increased
fiscal spending to fight the effects of COVID-19. Unlike the 2008-2009 financial crisis, reduced fiscal spending to fight the effects of COVID-19. Unlike the 2008-2009 financial crisis, reduced
demand by consumers, labor market issues, and a reduced level of activity among businesses, demand by consumers, labor market issues, and a reduced level of activity among businesses,
rather than risky trading by global banks, has led to corporate credit issues and potential rather than risky trading by global banks, has led to corporate credit issues and potential
insolvency. These market dynamics have led some observers to question if these events mark the insolvency. These market dynamics have led some observers to question if these events mark the
beginning of a full-scale global financial crisis.beginning of a full-scale global financial crisis.3951
Liquidity Liquidity and credit market issues present policymakers with a different set of and credit market issues present policymakers with a different set of ~~chal enges~~challenges than than
addressing supply-side constraints. As a result, the focus of government policy has expanded addressing supply-side constraints. As a result, the focus of government policy has expanded
from a health crisis to macroeconomic and financial market issues that are being addressed from a health crisis to macroeconomic and financial market issues that are being addressed
through a combination of monetary, fiscal, and other policies, including border closures, through a combination of monetary, fiscal, and other policies, including border closures,
quarantines, and restrictions on social interactions. quarantines, and restrictions on social interactions. ~~Essential y~~Essentially, while businesses are attempting to , while businesses are attempting to
address worker and output issues at the firm level, national leaders are attempting to implement address worker and output issues at the firm level, national leaders are attempting to implement
fiscal policies to prevent economic growth from fiscal policies to prevent economic growth from ~~fal ing~~contracting sharply by assisting workers and sharply by assisting workers and
businesses that are facing financial strains, and central bankers are adjusting monetary policies to businesses that are facing financial strains, and central bankers are adjusting monetary policies to
address mounting credit market issues. address mounting credit market issues.
In the initial In the initial stages of the health crisis, households did not experience the same kind of wealth stages of the health crisis, households did not experience the same kind of wealth
losses they saw during the 2008-2009 financial crisis when the value of their primary residence losses they saw during the 2008-2009 financial crisis when the value of their primary residence
dropped sharply. However, with unemployment numbers rising rapidly, job losses could result in dropped sharply. However, with unemployment numbers rising rapidly, job losses could result in

~~Xi Cancels Japan T rip, Washington Post, March 5, 2020, https://www.washingtonpost.com/world/2020/03/05/COVID-~~
~~19-live-updates/.~~
~~38 Shih, Gerry, “ China Is Subtly Stoking COVID-19 Conspiracy T heories T hat Blame the U.S. for Outbreak,”~~
Washington Post, March 5, 2020. https://www.washingtonpost.com/world/2020/03/05/COVID-19-live-updates/.
~~39 Foroohar, Rana, “ How COVID-19 Became a Corporate Credit Run,” Financial Times, March 15, 2020.~~
~~https://www.ft.com/content/f1ea5096-6531-11ea-a6cd-df28cc3c6a68.~~
~~Congressional Research Service~~

11

~~Global Economic Effects of COVID-19~~

defaults on mortgages and delinquencies on rent payments, unless financial institutions provide defaults on mortgages and delinquencies on rent payments, unless financial institutions provide
loan forbearance or there is a mechanism to provide financial assistance. In turn, mortgage loan forbearance or there is a mechanism to provide financial assistance. In turn, mortgage
defaults could negatively affect the market for mortgage-backed securities, the availabilitydefaults could negatively affect the market for mortgage-backed securities, the availability of of
funds for mortgages, and negatively affect the funds for mortgages, and negatively affect the ~~overal~~ overall rate of economic growth. Losses in the rate of economic growth. Losses in the
value of most equity markets in the U.S., Asia, and Europe could also affect household wealth, value of most equity markets in the U.S., Asia, and Europe could also affect household wealth,
~~especial y~~especially that of retirees living that of retirees living on a fixed income and others who own equities. Investors that on a fixed income and others who own equities. Investors that
trade in mortgage-backed securities reportedly trade in mortgage-backed securities reportedly ~~have been reducing~~reduced their holdings while the their holdings while the
Federal Reserve Federal Reserve ~~has been attempting~~attempted to support the market. to support the market.4052 In the current environment, even In the current environment, even
traditional policy tools, such as monetary accommodation, apparently have not traditional policy tools, such as monetary accommodation, apparently have not always been processed by been processed by
~~markets in a~~ markets in a 51 Foroohar, Rana, “How COVID-19 Became a Corporate Credit Run,” Financial Times, March 15, 2020. https://www.ft.com/content/f1ea5096-6531-11ea-a6cd-df28cc3c6a68. 52 Armstrong, Robert, “Mortgage Investment Funds Become ‘Epicenter’ of Crisis,” Financial Times, March 24, 2020. https://www.ft.com/content/18909cda-6d40-11ea-89df-41bea055720b. Congressional Research Service 15 Global Economic Effects of COVID-19 traditional manner, with equity market indices displaying heightened, rather than traditional manner, with equity market indices displaying heightened, rather than
lower, levels of uncertainty following the Federal Reserve’s cut in interest rates. Such volatility is lower, levels of uncertainty following the Federal Reserve’s cut in interest rates. Such volatility is
adding to uncertainties about what governments can do to address weaknesses in the global adding to uncertainties about what governments can do to address weaknesses in the global
economy.economy.
Major Economic Developments
Between late February and late May, 2020, financial markets from the United States to Asia and Between late February and late May, 2020, financial markets from the United States to Asia and
Europe have been whipsawed as investors alternated between optimism and pessimism amid Europe have been whipsawed as investors alternated between optimism and pessimism amid
concerns that COVID-19 would create a global economic and financial crisis with few metrics to concerns that COVID-19 would create a global economic and financial crisis with few metrics to
indicate how prolonged and extensive the economic effects may be.indicate how prolonged and extensive the economic effects may be.4153 Investors have searched for Investors have searched for
safe-haven investments, such as the benchmark U.S. Treasury 10-year security, which safe-haven investments, such as the benchmark U.S. Treasury 10-year security, which
experienced a historic drop in yieldexperienced a historic drop in yield to below 1% on March 3, 2020.to below 1% on March 3, 2020.4254 In response to concerns that In response to concerns that
the global economy was in a the global economy was in a ~~freefal~~ freefall, the Federal Reserve lowered key interest rates on March 3, , the Federal Reserve lowered key interest rates on March 3,
2020, to shore up economic activity, while the Bank of Japan engaged in asset purchases to 2020, to shore up economic activity, while the Bank of Japan engaged in asset purchases to
provide short-term liquidity to Japanese banks; Japan’s government indicated it would also assist provide short-term liquidity to Japanese banks; Japan’s government indicated it would also assist
workers with wage subsidies. The Bank of Canada also lowered its key interest rate. The workers with wage subsidies. The Bank of Canada also lowered its key interest rate. The
International Monetary Fund (IMF) announced that it was making about $50 International Monetary Fund (IMF) announced that it was making about $50 ~~bil ion~~billion available available
through emergency financing facilities for low-income and emerging market countries and through emergency financing facilities for low-income and emerging market countries and
through funds available in its Catastrophe Containment and Relief Trust (CCRT).through funds available in its Catastrophe Containment and Relief Trust (CCRT).4355
Reflecting investors’ uncertainties, the Dow Jones Industrial Average (DJIA) lost about one-third Reflecting investors’ uncertainties, the Dow Jones Industrial Average (DJIA) lost about one-third
of its value between February 14, 2020, and March 23, 2020, as indicated in of its value between February 14, 2020, and March 23, 2020, as indicated in Figure 34. .
Expectations that the U.S. Congress would adopt a $2.0 Expectations that the U.S. Congress would adopt a $2.0 ~~tril ion~~trillion spending package moved the spending package moved the
DJIA up by more than 11% on March 24, 2020. From March 23 to April 15, the DJIA moved DJIA up by more than 11% on March 24, 2020. From March 23 to April 15, the DJIA moved
higher by18%, paring its initialhigher by18%, paring its initial losses by half. Since then, the DJIA has losses by half. Since then, the DJIA has ~~moved erratical y as~~
trended upward, but moved erratically as investors have weighed news about the human cost and economic impact of the pandemic and the investors have weighed news about the human cost and economic impact of the pandemic and the
prospects of various medical treatments. For some policymakers, the drop in equity prices has prospects of various medical treatments. For some policymakers, the drop in equity prices has
raised concerns that foreign investors might attempt to exploit the situation by raised concerns that foreign investors might attempt to exploit the situation by increasing their purchases of firms in sectors considered important to national security. For instance, Ursula von der Leyen, president of the European Commission, urged EU members to better screen foreign investments, especially in areas such as health, medical research, and critical infrastructure.56 Similar to the 2008-2009 global financial crisis, central banks have implemented a series of monetary operations to provide liquidity to their economies. These actions, however, initially were not viewed entirely positively by all financial market participants who questioned the use of policy tools by central banks that are similar to those employed during the 2008-2009 financial crisis, despite the fact that the current and previous crisis are fundamentally different in origin. During the previous financial crisis, central banks intervened to restart credit and spending by banks that had engaged in risky assets. In the current environment, central banks are attempting to 53 Samson, Adam and Hudson Lockett~~increasing their~~

~~40 Armstrong, Robert, “ Mortgage Investment Funds Become ‘Epicenter’ of Crisis,” Financial Times, March 24, 2020.~~
~~https://www.ft.com/content/18909cda-6d40-11ea-89df-41bea055720b.~~
~~41 Samson, Adam and Hudson Lockett~~ , “Stocks Fall Again in Worst Week Since 2008 Crisis,”, “Stocks Fall Again in Worst Week Since 2008 Crisis,” Financial Times, ,
February 28. https://www.ft.com/content/4b23a140-59d3-11ea-a528-dd0f971febbc. February 28. https://www.ft.com/content/4b23a140-59d3-11ea-a528-dd0f971febbc.
~~42 T he~~ 54 The price and yield price and yield of a bond are inversely related; increased demandof a bond are inversely related; increased demand ~~for T reasury~~ for Treasury securities raises their price, which securities raises their price, which
lowerslowers their yield. Levisohn, Ben, “their yield. Levisohn, Ben, “ ~~T he~~The 10-Year Treasury Yield Fell Below 10-Year Treasury Yield Fell Below 1% for the First 1% for the First ~~T ime~~Time Ever. What Ever. What ~~T hat~~That
Means,” Means,” Barrons, March 3, 2020. https://www.barrons.com/articles/the-10-year-treasury-yield-fell-below-1-for-the-, March 3, 2020. https://www.barrons.com/articles/the-10-year-treasury-yield-fell-below-1-for-the-
first-time-ever-whatfirst-time-ever-what -that-means-51583267310. -that-means-51583267310.
4355 Georgieva, Kristalina, “Potential Impact of the COVID-19 Epidemic: What We Know and What We Can Do,” Georgieva, Kristalina, “Potential Impact of the COVID-19 Epidemic: What We Know and What We Can Do,”
International Monetary Fund, March 4, 2020. https://blogs.imf.org/2020/03/04/potential-impact-of-the-COVID-19-, March 4, 2020. https://blogs.imf.org/2020/03/04/potential-impact-of-the-COVID-19-
epidemic-what-we-know-and-whatepidemic-what-we-know-and-what ~~-we-can-do/.~~
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~~purchases of firms in sectors considered important to national security. For instance, Ursula von~~
~~der Leyen, president of the European Commission, urged EU members to better screen foreign~~
~~investments, especial y in areas such as health, medical research, and critical infrastructure.44~~
~~Similar to the 2008-2009 global financial crisis, central banks have implemented a series of~~
~~monetary operations to provide liquidity to their economies. These actions, however, initial y~~
~~were not viewed entirely positively by al financial market participants who questioned the use of~~
~~policy tools by central banks that are similar to those employed during the 2008-2009 financial~~
~~crisis, despite the fact that the current and previous crisis are fundamental y different in origin.~~
~~During the previous financial crisis, central banks intervened to restart credit and spending by~~
~~banks that had engaged in risky assets. In the current environment, central banks are attempting to~~
~~address financial market volatility~~ -we-can-do/. 56 Chazan, Guy and Jim Brunsden, “COVID-19 Crisis Pushes Europe into Nationalist Economic Turn,” Financial Times, March 26, 2020. https://www.ft.com/content/79c0ae80-6df1-11ea-89df-41bea055720b. Congressional Research Service 16 Global Economic Effects of COVID-19 address financial market volatility and prevent large-scale corporate insolvencies that reflect the and prevent large-scale corporate insolvencies that reflect the
underlying economic uncertainty caused by the pandemic. underlying economic uncertainty caused by the pandemic.
Figure 34. Dow Jones Industrial Average Index
February 14, 2020 to June February 14, 2020 to June 118, 2020 , 2020

Source: Financial Times.Financial Times. Created by CRS. Created by CRS.
Similar to conditions during the 2008-2009 financial crisis, the dollar has emerged as the Similar to conditions during the 2008-2009 financial crisis, the dollar has emerged as the
preferred currency by investors, reinforcing its role as the dominant global reserve currency. As preferred currency by investors, reinforcing its role as the dominant global reserve currency. As
indicated in indicated in Figure 45, the dollar appreciated more than 3.0% during the period between March 3 , the dollar appreciated more than 3.0% during the period between March 3
and March 13, 2020, reflecting increased international demand for the dollar and dollar-and March 13, 2020, reflecting increased international demand for the dollar and dollar-
denominated assets. Since the highs reached on March 23, the dollar has given up some of its denominated assets. Since the highs reached on March 23, the dollar has given up some of its
value against other currencies, but has remained about 10% higher than it was at the beginning of value against other currencies, but has remained about 10% higher than it was at the beginning of
the year. According to a recent survey by the Bank for International Settlements (BIS),the year. According to a recent survey by the Bank for International Settlements (BIS),4557 the the
dollar accounts for 88% of global foreign exchange market turnover and is key in funding an dollar accounts for 88% of global foreign exchange market turnover and is key in funding an
array of financial transactions, including serving as an invoicing currency to facilitate array of financial transactions, including serving as an invoicing currency to facilitate
international trade. It also accounts for two-thirds of central bank foreign exchange holdings, half international trade. It also accounts for two-thirds of central bank foreign exchange holdings, half
of non-U.S. banks foreign currency deposits, and two-thirds of non-U.S. corporate borrowings of non-U.S. banks foreign currency deposits, and two-thirds of non-U.S. corporate borrowings

~~44 Chazan, Guy and Jim Brunsden, “COVID-19 Crisis Pushes Europe into Nationalist Economic T urn,”~~ ~~Financial~~
~~Tim es, March 26, 2020. https://www.ft.com/content/79c0ae80-6df1-11ea-89df-41bea055720b.~~
~~45 Foreign Exchange Turnover in April 2019, Bank for International Settlements, September 16, 2019.~~
~~https://www.bis.org/statistics/rpfx19_fx.htm.~~
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~~from banks and the corporate bond market.46 As a result, disruptions in the smooth functioning of~~
~~the global dollar market can have wide-ranging repercussions on international trade and financial~~
~~transactions.~~
~~The international role of the dollar also increases pressure on the Federal Reserve essential y~~from banks and the corporate bond market.58 As a result of the role of the dollar as the dominant global reserve currency, disruptions in the smooth functioning of the global dollar market can have wide-ranging repercussions on international trade and financial transactions. A June 2020 report by the Bank for International Settlements stresses the central role of the dollar in the global economy. The report concludes that dollar funding activities are highly complex, geographically dispersed, and interconnected in ways that provide benefits to the stability of the global financial system. This also means, however, that strains in the system can easily be transmitted across different financial markets and across regions.59 57 Foreign Exchange Turnover in April 2019, Bank for International Settlements, September 16, 2019. https://www.bis.org/statistics/rpfx19_fx.htm. 58 See CRS In Focus IF10112, Introduction to Financial Services: The International Foreign Exchange Market. 59 Bank for International Settlements, U.S, Dollar Funding: An International Perspective, CGFS Papers, No. 65, June 2020, p. 52. https://www.bis.org/publ/cgfs65.htm. Congressional Research Service 17 Global Economic Effects of COVID-19 The international role of the dollar also increases pressure on the Federal Reserve essentially to to
assume the lead role as the global lender of last resort. Reminiscent of the financial crisis, the assume the lead role as the global lender of last resort. Reminiscent of the financial crisis, the
global economy has experienced a period of dollar shortage, requiring the Federal Reserve to take global economy has experienced a period of dollar shortage, requiring the Federal Reserve to take
numerous steps to ensure the supply of dollars to the U.S. and global economies, including numerous steps to ensure the supply of dollars to the U.S. and global economies, including
activating existing currency swap arrangements, establishing such arrangements with additional activating existing currency swap arrangements, establishing such arrangements with additional
central banks, and creating new financial facilities to provide liquiditycentral banks, and creating new financial facilities to provide liquidity to central banks and to central banks and
monetary authorities.monetary authorities.~~47 Typical y~~60 Typically, banks lend long-term and borrow short-term and can only , banks lend long-term and borrow short-term and can only
borrow from their home central bank. In turn, central banks can only provide liquidity in their borrow from their home central bank. In turn, central banks can only provide liquidity in their
own currency. Consequently, a bank can become own currency. Consequently, a bank can become ~~il iquid~~illiquid in a panic, meaning it cannot borrow in in a panic, meaning it cannot borrow in
private markets to meet short-term cash flow needs. Swap lines are designed to private markets to meet short-term cash flow needs. Swap lines are designed to ~~al ow~~allow foreign foreign
central banks the funds necessary to provide needed liquidity to their country’s banks in dollars.central banks the funds necessary to provide needed liquidity to their country’s banks in dollars.
Figure 45. U.S. Dollar Trade-Weighted Broad Index, Goods and Services
January 2, 2020 through January 2, 2020 through ~~May 22~~June 12, 2020 , 2020

Source: St. Louis Federal ReserveSt. Louis Federal Reserve Bank. Created by CRS. Bank. Created by CRS.
Notes: January 2006 = 100. January 2006 = 100.
March 2020
The yield on U.S. Treasury securities dropped to historic levels on March 6, 2020, and March 9, The yield on U.S. Treasury securities dropped to historic levels on March 6, 2020, and March 9,
2020, as investors continued to move out of stocks and into Treasury securities and other 2020, as investors continued to move out of stocks and into Treasury securities and other
sovereign bonds, including UK and German bonds, due in part to concerns over the impact the sovereign bonds, including UK and German bonds, due in part to concerns over the impact the
pandemic would have on economic growth and expectations the Federal Reserve and other pandemic would have on economic growth and expectations the Federal Reserve and other
central banks would lower short-term interest rates.central banks would lower short-term interest rates.4861 On March 5, the U.S. Congress passed a $8 On March 5, the U.S. Congress passed a $8

~~46 See CRS In Focus IF10112, Introduction to Financial Services: The International Foreign Exchange Market.~~
47billion spending bill to provide assistance for health care, sick leave, small business loans, and international assistance. At the same time, commodity prices dropped sharply as a result of 60 Politi, James, Brendan Greeley, and Colby Politi, James, Brendan Greeley, and Colby Smith, “Fed Sets Up Scheme to Meet Booming Foreign Demand for Smith, “Fed Sets Up Scheme to Meet Booming Foreign Demand for
Dollars,” Dollars,” Financial ~~Tim es~~Times, March 31, 2020. https://www.ft.com/content/6c976586-a6ea-42ec-a369-9353186c05bb. , March 31, 2020. https://www.ft.com/content/6c976586-a6ea-42ec-a369-9353186c05bb.
48 61 Smith, Colby, Richard Smith, Colby, Richard Henderson, Philip Georgiadis,Henderson, Philip Georgiadis, and Hudsonand Hudson Lockett, “Lockett, “ Stocks Stocks ~~T umble~~Tumble and Government Bonds and Government Bonds
Hit HighsHit Highs on Viruson Virus Fears,” Fears,” Financial ~~Tim es~~Times, March 6, 2020. https://www.ft.com/content/9f94d6f8-5f51-11ea-b0ab-, March 6, 2020. https://www.ft.com/content/9f94d6f8-5f51-11ea-b0ab-
339c2307bcd4. 339c2307bcd4.
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~~bil ion spending bil to provide assistance for health care, sick leave, smal business loans, and~~
~~international assistance. At the same time, commodity prices dropped sharply as a result of~~
reduced economic activity and disagreements among oil producers over production cuts in crude reduced economic activity and disagreements among oil producers over production cuts in crude
oil and lower global demand for commodities, including crude oil. oil and lower global demand for commodities, including crude oil.
The drop in some commodity prices raised concerns about corporate profits and led some The drop in some commodity prices raised concerns about corporate profits and led some
investors to investors to ~~sel~~ sell equities and buy sovereign bonds. In overnight trading in various sessions equities and buy sovereign bonds. In overnight trading in various sessions
between March 8, and March 24, U.S. stock market indexes moved sharply (both higher and between March 8, and March 24, U.S. stock market indexes moved sharply (both higher and
lower), triggering automatic circuit breakers designed to halt trading if the indexes rise or lower), triggering automatic circuit breakers designed to halt trading if the indexes rise or ~~fal by~~
fall by more than 5% when markets are closed and 7% when markets are open.more than 5% when markets are closed and 7% when markets are open.4962 By early April, the By early April, the
global mining industry had reduced production by an estimated 20% in response to global mining industry had reduced production by an estimated 20% in response to ~~fal ing~~
falling demand and labor quarantines and as a strategy for raising prices.demand and labor quarantines and as a strategy for raising prices.50
63 Ahead of a March 12, 2020, scheduled meeting of the European Central Bank (ECB), the German Ahead of a March 12, 2020, scheduled meeting of the European Central Bank (ECB), the German
central bank (Deutsche Bundesbank) announced a package of measures to provide liquidity central bank (Deutsche Bundesbank) announced a package of measures to provide liquidity
support to German businesses and financial support for public infrastructure projects.support to German businesses and financial support for public infrastructure projects.5164 At the At the
same time, the Fed announced that it was expanding its repo market transactions (in the same time, the Fed announced that it was expanding its repo market transactions (in the
repurchase market, investors borrow cash for short periods in exchange for high-quality collateral repurchase market, investors borrow cash for short periods in exchange for high-quality collateral
like Treasury securities) after stock market indexes like Treasury securities) after stock market indexes ~~fel~~ fell sharply, government bond yields sharply, government bond yields ~~fel~~ fell to to
record lows (reflecting increased demand), and demand for corporate bonds record lows (reflecting increased demand), and demand for corporate bonds ~~fel~~ fell. Together these . Together these
developments raised concerns for some analysts that instability in stock markets could threaten developments raised concerns for some analysts that instability in stock markets could threaten
global financial conditions.global financial conditions.52
65 On March 11, as the WHO designated COVID-19 a pandemic, governments and central banks On March 11, as the WHO designated COVID-19 a pandemic, governments and central banks
adopted additional monetary and fiscal policies to address the growing economic impact. adopted additional monetary and fiscal policies to address the growing economic impact.
European Central Bank (ECB) President Christine Lagarde in a conference European Central Bank (ECB) President Christine Lagarde in a conference ~~cal~~ call to EU leaders to EU leaders
warned that without coordinated action, Europe could face a recession similar to the 2008-2009 warned that without coordinated action, Europe could face a recession similar to the 2008-2009
financial crisis.financial crisis.5366 The Bank of England lowered its key interest rate, reduced capital buffers for The Bank of England lowered its key interest rate, reduced capital buffers for
UK banks, and provided a funding program for UK banks, and provided a funding program for ~~smal~~ small and medium businesses. The UK and medium businesses. The UK
~~Chancel or~~Chancellor of the Exchequer also proposed a budget that would appropriate £30 of the Exchequer also proposed a budget that would appropriate £30 ~~bil ion~~billion (about (about
$35 $35 ~~bil ion)~~ billion) for fiscal stimulus spending, including funds for sick pay for workers, guarantees for for fiscal stimulus spending, including funds for sick pay for workers, guarantees for
loans to loans to ~~smal~~ small businesses, and cuts in business taxes. The European Commission announced a €25 businesses, and cuts in business taxes. The European Commission announced a €25
~~bil ion~~ billion (about $28 (about $28 ~~bil ion)~~ billion) investment fund to assist EU countries and the Federal Reserve investment fund to assist EU countries and the Federal Reserve
announced that it would expand its repo market purchases to provide larger and longer-term announced that it would expand its repo market purchases to provide larger and longer-term
funding to provide added liquidityfunding to provide added liquidity to financial markets. to financial markets.
President Trump imposed restrictions on travel from Europe to the United States on March 12, President Trump imposed restrictions on travel from Europe to the United States on March 12,
2020, surprising European leaders and adding to financial market volatility.2020, surprising European leaders and adding to financial market volatility.5467 At its March 12 At its March 12

~~49 Georgiadis,~~ 62 Georgiadis, Philip, Adam Samson, and HudsonPhilip, Adam Samson, and Hudson Lockett, “Stocks Plummet as Oil Crash ShakesLockett, “Stocks Plummet as Oil Crash Shakes Financial Markets,” Financial Markets,”
Financial ~~Tim es~~Times, March 9, 2020. https://www.ft.com/content/8273a32a-61e4-11ea-a6cd-df28cc3c6a68. , March 9, 2020. https://www.ft.com/content/8273a32a-61e4-11ea-a6cd-df28cc3c6a68.
5063 Hume, Neil, “Mine Closures Hume, Neil, “Mine Closures Bolster Metals Prices as Demand Collapses,” Bolster Metals Prices as Demand Collapses,” Financial Times, April 7, 2020. , April 7, 2020.
https://www.ft.com/content/06ef38c9-18d8-427e-8675-a567227397c0. https://www.ft.com/content/06ef38c9-18d8-427e-8675-a567227397c0.
5164 Chazan, Guy, Chazan, Guy, David Keohane, and Martin Arnold, “Europe’s Policymakers Search for AnswersDavid Keohane, and Martin Arnold, “Europe’s Policymakers Search for Answers to Virusto Virus Crisis,” Crisis,”
Financial ~~Tim es~~Times, March 9, 2020. https://www.ft.com/content/d46467da-61e1-11ea-b3f3-fe4680ea68b5. , March 9, 2020. https://www.ft.com/content/d46467da-61e1-11ea-b3f3-fe4680ea68b5.
52 65 Smith, Colby Smith, Colby and Brendan Greeley, “Fed Pumps Extra Liquidity Into Overnight Lending Markets,” and Brendan Greeley, “Fed Pumps Extra Liquidity Into Overnight Lending Markets,” Financial Times, ,
March 9, 2020. https://www.ft.com/content/e8c7b5f0-6200-11ea-a6cd-df28cc3c6a68. March 9, 2020. https://www.ft.com/content/e8c7b5f0-6200-11ea-a6cd-df28cc3c6a68.
5366 O’Brien, Fergal, O’Brien, Fergal, “ECB’s Lagarde“ECB’s Lagarde Warns of 2008-Style CrisisWarns of 2008-Style Crisis Unless Europe Acts,” Unless Europe Acts,” Washington Post, March 11, , March 11,
2020. https://www.bloomberg.com/news/articles/2020-03-11/ecb-s-lagarde-warns-of-2008-style-crisis-without2020. https://www.bloomberg.com/news/articles/2020-03-11/ecb-s-lagarde-warns-of-2008-style-crisis-without -urgent-urgent --
action. action.
54 67 McAuley, James and Michael Birnbaum, McAuley, James and Michael Birnbaum, “Europe Blindsided“Europe Blindsided ~~by T rump’s T ravel~~ by Trump’s Travel Restrictions, with Many Seeing Restrictions, with Many Seeing
Political Motive,” Political Motive,” Washington Post, March 12, 2020. https://www.washingtonpost.com/world/europe/europe-, March 12, 2020. https://www.washingtonpost.com/world/europe/europe-
blindsided-by-trumps-travel-restrictions-with-many-seeing-political-motive/2020/03/12/42a279d0-6412-11ea-8a8e-5c5336b32760_story.html. Congressional Research Service Congressional Research Service

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meeting, the ECB meeting, the ECB announced €27 announced €27 ~~bil ion~~billion (about $30 (about $30 ~~bil ion)~~ billion) in stimulus funding, combining in stimulus funding, combining
measures to expand low-cost loans to Eurozone banks and measures to expand low-cost loans to Eurozone banks and ~~smal~~ small and medium-sized businesses and medium-sized businesses
and implement an asset purchase program to provide liquidity to firms. Germany indicated that it and implement an asset purchase program to provide liquidity to firms. Germany indicated that it
would provide tax breaks for businesses and “unlimited” loans to affected businesses. The ECB’s would provide tax breaks for businesses and “unlimited” loans to affected businesses. The ECB’s
Largarde roiled markets by stating that it was not the ECB’s job to “close the spread” between Largarde roiled markets by stating that it was not the ECB’s job to “close the spread” between
Italian and German government bond yields (a key risk indicator for Italy), a comment reportedly Italian and German government bond yields (a key risk indicator for Italy), a comment reportedly
interpreted as an indicator the ECB was preparing to abandon its support for Italy, a notion that interpreted as an indicator the ECB was preparing to abandon its support for Italy, a notion that
was denied by the ECB.was denied by the ECB.5568 The Fed also announced that it would further increase its lending in the The Fed also announced that it would further increase its lending in the
repo market and its purchases of Treasury securities to provide liquidity. As a result of tight repo market and its purchases of Treasury securities to provide liquidity. As a result of tight
market conditions for corporate bonds, firms turned to their revolving lines of credit with banks to market conditions for corporate bonds, firms turned to their revolving lines of credit with banks to
build up their cash reserves. The price of bank shares build up their cash reserves. The price of bank shares ~~fel~~ fell, reflecting sales by investors who , reflecting sales by investors who
reportedly had grown concerned that banks would experience a rise in loan defaults.reportedly had grown concerned that banks would experience a rise in loan defaults.5669 Despite the Despite the
various actions, the DJIA various actions, the DJIA ~~fel~~ fell by nearly 10% on March 12, recording the worst one-day drop since by nearly 10% on March 12, recording the worst one-day drop since
1987. Between February 14 and March 12, the DJIA 1987. Between February 14 and March 12, the DJIA ~~fel~~ fell by more than 8,000 points, or 28% of its by more than 8,000 points, or 28% of its
value. Credit rating agencies began reassessing corporate credit risk, including the risk of firms value. Credit rating agencies began reassessing corporate credit risk, including the risk of firms
that had been considered stable.that had been considered stable.57
70 On March 13, President Trump declared a national emergency, On March 13, President Trump declared a national emergency, ~~potential y~~potentially releasing $50 releasing $50 ~~bil ion~~ billion in in
disaster relief funds to state and local governments. The announcement moved financial markets disaster relief funds to state and local governments. The announcement moved financial markets
sharply higher, with the DJIA rising 10%.sharply higher, with the DJIA rising 10%.5871 Financial markets also reportedly moved higher on Financial markets also reportedly moved higher on
expectations the Fed would lower interest rates. House Democrats and President Trump agreed to expectations the Fed would lower interest rates. House Democrats and President Trump agreed to
a $2 a $2 ~~tril ion~~ trillion spending package to provide paid sick leave, unemployment insurance, food stamps, spending package to provide paid sick leave, unemployment insurance, food stamps,
support for support for ~~smal~~ small businesses, and other measures.businesses, and other measures.5972 The EU indicated that it would relax budget The EU indicated that it would relax budget
rules that restrict deficit spending by EU members. In other actions, the People’s Bank of China rules that restrict deficit spending by EU members. In other actions, the People’s Bank of China
cut its reserve requirements for Chinese banks, cut its reserve requirements for Chinese banks, ~~potential y~~potentially easing borrowing costs for firms and easing borrowing costs for firms and
adding $79 adding $79 ~~bil ion~~ billion in funds to stimulate the Chinese economy; Norway’s central bank reduced its in funds to stimulate the Chinese economy; Norway’s central bank reduced its
key interest rate; the Bank of Japan acquired key interest rate; the Bank of Japan acquired ~~bil ions~~billions of dollars of government securities (thereby of dollars of government securities (thereby
increasing liquidity); and the Reserve Bank of Australia injected nearly $6 increasing liquidity); and the Reserve Bank of Australia injected nearly $6 ~~bil ion~~ billion into its into its
financial system.financial system.6073 The Bank of Canada also lowered its overnight bank lending rate. The Bank of Canada also lowered its overnight bank lending rate.

~~blindsided-by-trumps-travel-restrictions-with-many-seeing-political-motive/2020/03/12/42a279d0-6412-11ea-8a8e-~~
~~5c5336b32760_story.html.~~
55 The Federal Reserve lowered its key interest rate to near zero on March 15, 2020, arguing that the pandemic had “harmed communities and disrupted economic activity in many countries, 68 Arnold, Martin, “ECB Enters Damage-Limitation Mode with Pledge Arnold, Martin, “ECB Enters Damage-Limitation Mode with Pledge of More Action,” of More Action,” Financial Times, March 13, , March 13,
2020. https://www.ft.com/content/f1cbd4f8-650f-11ea-b3f3-fe4680ea68b5. 2020. https://www.ft.com/content/f1cbd4f8-650f-11ea-b3f3-fe4680ea68b5.
5669 Morris, Stephen, Laura Noonan, Henny Sender, and Olaf Storbeck, “Banks Scramble Morris, Stephen, Laura Noonan, Henny Sender, and Olaf Storbeck, “Banks Scramble as Companies Rushas Companies Rush ~~to T ap~~ to Tap
Back-up Credit Lines,” Back-up Credit Lines,” Financial ~~Tim es~~Times, March 12, 2020. https://www.ft.com/content/a3513a54-6486-11ea-b3f3-, March 12, 2020. https://www.ft.com/content/a3513a54-6486-11ea-b3f3-
fe4680ea68b5. fe4680ea68b5.
5770 Edgecliffe-Johnson, Andrew, Edgecliffe-Johnson, Andrew, Peggy Hollinger, Joe Rennison, and Robert Smith, “Will the COVID-19 Peggy Hollinger, Joe Rennison, and Robert Smith, “Will the COVID-19 ~~T rigger~~Trigger a a
Corporate Debt Crisis?”Corporate Debt Crisis?” Financial ~~Tim es~~Times, March 12, 2020. https://www.ft.com/content/4455735a-63bc-11ea-b3f3-, March 12, 2020. https://www.ft.com/content/4455735a-63bc-11ea-b3f3-
fe4680ea68b5. Sectors most exposed to debt financing issuesfe4680ea68b5. Sectors most exposed to debt financing issues ~~include~~ include automotive, insurance, capital goods, utilities, oil automotive, insurance, capital goods, utilities, oil
and gas,and gas, technology, aerospace and defense, real estate, telecoms, consumer products, metals, mining and steel, technology, aerospace and defense, real estate, telecoms, consumer products, metals, mining and steel,
healthcare, retail/restaurants, chemicals, packaging, transportation, media and entertainment, and forest products.healthcare, retail/restaurants, chemicals, packaging, transportation, media and entertainment, and forest products.
58 71 Fritz, Angela and Meryl Kornfield, “President Fritz, Angela and Meryl Kornfield, “President ~~T rump~~Trump Declares a National Emergency, Freeing $50 Billion in Declares a National Emergency, Freeing $50 Billion in
Funding,”Funding,” Washington Post, March 13, 2020. https://www.washingtonpost.com/world/2020/03/13/COVID-19-latest-, March 13, 2020. https://www.washingtonpost.com/world/2020/03/13/COVID-19-latest-
news. news.
5972 Werner, Erica, Mike DeBonis, Paul Kane, Jeff Stein, “White House, House Democrats Reach Deal on COVID-19 Werner, Erica, Mike DeBonis, Paul Kane, Jeff Stein, “White House, House Democrats Reach Deal on COVID-19
Economic Relief Package, Pelosi Announces,” Economic Relief Package, Pelosi Announces,” Washington Post, March 13, 2020. https://www.washingtonpost.com/, March 13, 2020. https://www.washingtonpost.com/
us-policy/2020/03/13/paid-leave-democrats-trump-deal-COVID-19/. us-policy/2020/03/13/paid-leave-democrats-trump-deal-COVID-19/.
6073 Georgiadis, Georgiadis, Philip, Hudson Lockett, and Leo Lewis,Philip, Hudson Lockett, and Leo Lewis, “European Stocks and US“European Stocks and US Futures SoarFutures Soar After Historic Rout,” After Historic Rout,”
Financial ~~Tim es~~Times, March 13, 2020. https://www.ft.com/content/3bab76ac-64cd-11ea-a6cd-df28cc3c6a68. , March 13, 2020. https://www.ft.com/content/3bab76ac-64cd-11ea-a6cd-df28cc3c6a68.
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~~The Federal Reserve lowered its key interest rate to near zero on March 15, 2020, arguing that the~~
~~pandemic had “harmed communities and disrupted economic activity in many countries,~~
including the United States” and that it was prepared to use its “full range of tools.”including the United States” and that it was prepared to use its “full range of tools.”6174 It also It also
announced an additional $700 announced an additional $700 ~~bil ion~~ billion in asset purchases, including Treasury securities and in asset purchases, including Treasury securities and
mortgage-backed securities, expanded repurchase operations, activated dollar swap lines with mortgage-backed securities, expanded repurchase operations, activated dollar swap lines with
Canada, Japan, Europe, the UK, and Switzerland, opened its discount window to commercial Canada, Japan, Europe, the UK, and Switzerland, opened its discount window to commercial
banks to ease household and business lending, and urged banks to use their capital and liquidity banks to ease household and business lending, and urged banks to use their capital and liquidity
buffers to support lending.buffers to support lending.62
75 Despite the Fed’s actions the previous day to lower interest rates, interest rates in the U.S. Despite the Fed’s actions the previous day to lower interest rates, interest rates in the U.S.
commercial paper market, where corporations raise cash by commercial paper market, where corporations raise cash by ~~sel ing~~selling short-term debt, rose on short-term debt, rose on
March 16, 2020, to their highest levels since the 2008-2009 financial crisis, prompting investors March 16, 2020, to their highest levels since the 2008-2009 financial crisis, prompting investors
to to ~~cal~~ call on the Federal Reserve to intervene.on the Federal Reserve to intervene.6376 The DJIA dropped nearly 3,000 points, or about The DJIA dropped nearly 3,000 points, or about
13%. Most automobile manufacturers announced major declines in sales and production;13%. Most automobile manufacturers announced major declines in sales and production;6477
similarly, most airlines reported they faced major cutbacks in flights and employee layoffs due to similarly, most airlines reported they faced major cutbacks in flights and employee layoffs due to
diminished economic activity.diminished economic activity.6578 Economic data from China indicated the economy would slow Economic data from China indicated the economy would slow
markedly in the first quarter of 2020, markedly in the first quarter of 2020, ~~potential y~~potentially greater than that experienced during the global greater than that experienced during the global
financial crisis.financial crisis.6679 The Bank of Japan announced that it would double its purchases of exchange The Bank of Japan announced that it would double its purchases of exchange
traded funds and the G-7 traded funds and the G-7 ~~countries67~~countries80 issued a joint statement promising “a strongly coordinated issued a joint statement promising “a strongly coordinated
international approach,” although no specific actions were mentioned. The IMF issued a international approach,” although no specific actions were mentioned. The IMF issued a
statement indicating its support for additional fiscal and monetary actions by governments and statement indicating its support for additional fiscal and monetary actions by governments and
that the IMF “stands ready to mobilize its $1 that the IMF “stands ready to mobilize its $1 ~~tril ion~~ trillion lending capacity to help its membership.” lending capacity to help its membership.”
The World Bank also promised an additionalThe World Bank also promised an additional ~~$14 bil ion~~ $14 billion to assist governments and companies to assist governments and companies
address the pandemic.address the pandemic.6881
Following the drop in equity market indexes the previous day, the Federal Reserve unveiled a Following the drop in equity market indexes the previous day, the Federal Reserve unveiled a
number of facilities on March 17, 2020, in some cases reviving actions it had not taken since the number of facilities on March 17, 2020, in some cases reviving actions it had not taken since the
financial crisis. It announced that it would financial crisis. It announced that it would ~~al ow~~allow the 24 primary dealers in Treasury securities to the 24 primary dealers in Treasury securities to
borrow cash collateralized against some stocks, municipal debt, and higher-rated corporate bonds; borrow cash collateralized against some stocks, municipal debt, and higher-rated corporate bonds;
revive a facility to buy commercial paper; and provide additional funding for the overnight repo revive a facility to buy commercial paper; and provide additional funding for the overnight repo
market.market.6982 The UK government proposed government-backed loans to support business; a three- The UK government proposed government-backed loans to support business; a three-

61 74 Federal Reserve Releases FOMC Statement, Board of Governors of the Federal, Board of Governors of the Federal Reserve System, March 15, 2020. Reserve System, March 15, 2020.
https://www.federalreserve.gov/newsevents/pressreleases/monetary20200315a.htm. https://www.federalreserve.gov/newsevents/pressreleases/monetary20200315a.htm.
6275 Greeley, Brendan, Colby Smith, Adam Samson, Joe Rennison, Katie Martin, and Jennifer Ablan, “Fed Cuts Greeley, Brendan, Colby Smith, Adam Samson, Joe Rennison, Katie Martin, and Jennifer Ablan, “Fed Cuts Rates to Rates to
Zero as Part of SweepingZero as Part of Sweeping ~~Crisis~~ Crisis Measures,” Measures,” Financial ~~Tim es~~Times, March 15, 2020. https://www.ft.com/content/a9a28bc0- March 15, 2020. https://www.ft.com/content/a9a28bc0-
66fb-11ea-a3c9-1fe6fedcca75. 66fb-11ea-a3c9-1fe6fedcca75.
6376 Rennison, Joe Rennison and Colby Smith, “Investors Call for Fed Help in ‘Frozen’ Commercial Paper Market,” Rennison, Joe Rennison and Colby Smith, “Investors Call for Fed Help in ‘Frozen’ Commercial Paper Market,”
Financial ~~Tim es~~Times, March 16, 2020. https://www.ft.com/content/34213560-677b-11ea-a3c9-1fe6fedcca75. , March 16, 2020. https://www.ft.com/content/34213560-677b-11ea-a3c9-1fe6fedcca75.
64 77 Campbell, Peter, Joe Miller, and David Keohane, “European Car Plants Close as Industry Crisis Campbell, Peter, Joe Miller, and David Keohane, “European Car Plants Close as Industry Crisis Deepens,” Deepens,” Financial
~~Tim es~~Times, March 16, 2020. https://www.ft.com/content/dd76d42a-678b-11ea-a3c9-1fe6fedcca75. , March 16, 2020. https://www.ft.com/content/dd76d42a-678b-11ea-a3c9-1fe6fedcca75.
6578 Smyth, Jamie Smyth, Andrew Smyth, Jamie Smyth, Andrew Edgecliffe-Johnson, Peggy Hollinger, Myles McCormick, David Keohane, and Edgecliffe-Johnson, Peggy Hollinger, Myles McCormick, David Keohane, and
Richard Milne, “Richard Milne, “ Most Airlines Face Bankruptcy by End of May, Industry Body Warns,” Most Airlines Face Bankruptcy by End of May, Industry Body Warns,” Financial ~~Tim es~~Times, March 16, , March 16,
2020. https://www.ft.com/content/30a3a26e-674f-11ea-800d-da70cff6e4d3. 2020. https://www.ft.com/content/30a3a26e-674f-11ea-800d-da70cff6e4d3.
66 79 Weinland, Don and Xinning Liu, “Chinese Economy Suffers Weinland, Don and Xinning Liu, “Chinese Economy Suffers Record BlowRecord Blow from COVID-19,” from COVID-19,” Financial Times, ,
March 16, 2020. https://www.ft.com/content/318ae26c-6733-11ea-800d-da70cff6e4d3. March 16, 2020. https://www.ft.com/content/318ae26c-6733-11ea-800d-da70cff6e4d3.
~~67 T he~~80 The G-7 is G-7 is comprised of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States.comprised of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States.
68 81 Wheatley, Jonathan, “Surging Dollar, Coronavirus and Oil Wheatley, Jonathan, “Surging Dollar, Coronavirus and Oil ~~Slump~~ Slump Hit Emerging Economies,” Hit Emerging Economies,” Financial Times,
March 18, 2020. https://www.ft.com/content/69fc6e2a-69d3-11ea-a3c9-1fe6fedcca75. March 18, 2020. https://www.ft.com/content/69fc6e2a-69d3-11ea-a3c9-1fe6fedcca75.
69 82 Politi, James, Brendan Greeley, Colby Smith, and Joe Rennison, “Fed to Lend Against Stocks and Bonds in Bid Politi, James, Brendan Greeley, Colby Smith, and Joe Rennison, “Fed to Lend Against Stocks and Bonds in Bid to to
StabilizeStabilize Markets,” Markets,” Financial ~~Tim es~~Times, March 17, 2020. https://www.ft.com/content/cf485398-689d-11ea-800d-, March 17, 2020. https://www.ft.com/content/cf485398-689d-11ea-800d-
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month moratorium on mortgage payments for homeowners; a new lending facility with the Bank month moratorium on mortgage payments for homeowners; a new lending facility with the Bank
of England to provide low-cost commercial paper to support lending; and loans for businesses. of England to provide low-cost commercial paper to support lending; and loans for businesses.
In an emergency session on March 18, the ECB announced a temporary, non-standard asset In an emergency session on March 18, the ECB announced a temporary, non-standard asset
purchase program, the Pandemic Emergency Purchase Program (PEPP), to acquire an additional purchase program, the Pandemic Emergency Purchase Program (PEPP), to acquire an additional
€750 €750 ~~bil ion~~ billion (over $820 (over $820 ~~bil ion)~~ billion) in public and private sector bonds to counter the risks posed by in public and private sector bonds to counter the risks posed by
the pandemic crisis (as of May 5, the ECB had purchased about $180 the pandemic crisis (as of May 5, the ECB had purchased about $180 ~~bil ion~~billion in securities). in securities).7083 The The
ECB also broadened the types of assets it would accept as collateral to include non-financial ECB also broadened the types of assets it would accept as collateral to include non-financial
commercial paper, eased collateral standards for banks, and waived restrictions on acquiring commercial paper, eased collateral standards for banks, and waived restrictions on acquiring
Greek government debt.Greek government debt.7184 The program was expected to end no later than yearend 2020. The program was expected to end no later than yearend 2020.
The Federal Reserve broadened its central bank dollar swap lines to include Brazil, Mexico, The Federal Reserve broadened its central bank dollar swap lines to include Brazil, Mexico,
Australia, Denmark, Norway, and Sweden. Automobile manufacturers announced they were Australia, Denmark, Norway, and Sweden. Automobile manufacturers announced they were
suspending production at an estimated 100 plants across North America, following similar plant suspending production at an estimated 100 plants across North America, following similar plant
closures in Europe.closures in Europe.7285 Major U.S. banks announced a moratorium on share repurchases, or stock Major U.S. banks announced a moratorium on share repurchases, or stock
buy-backs, denying equity markets a major source of support and buy-backs, denying equity markets a major source of support and ~~potential y~~potentially amplifying market amplifying market
volatility.volatility.73 86 During the week, more than 22 central banks in emerging economies, including During the week, more than 22 central banks in emerging economies, including
Brazil, Turkey, and Vietnam, lowered their key interest rates. Brazil, Turkey, and Vietnam, lowered their key interest rates.
By March 19, 2020, investors were By March 19, 2020, investors were ~~sel ing~~selling sovereign and other bonds as firms and other financial sovereign and other bonds as firms and other financial
institutions attempted to increase their cash holdings, although actions central banks took during institutions attempted to increase their cash holdings, although actions central banks took during
the week appeared to calm financial markets. Compared to previous financial market dislocations the week appeared to calm financial markets. Compared to previous financial market dislocations
in which stock market values declined while bond prices rose, stock and bond values in which stock market values declined while bond prices rose, stock and bond values ~~fel~~ fell at the at the
same time in March 2020 as investors reportedly adopted a “same time in March 2020 as investors reportedly adopted a “~~sel~~ sell everything” mentality to build everything” mentality to build
up cash reserves.up cash reserves.7487 Senate Republicans introduced the Coronavirus Aid, Relief, and Economic Senate Republicans introduced the Coronavirus Aid, Relief, and Economic
Security Act to provide $2 Security Act to provide $2 ~~tril ion~~trillion in spending to support the U.S. economy. in spending to support the U.S. economy.
By the close of trading on March 20, the DJIA index had By the close of trading on March 20, the DJIA index had ~~fal en~~fallen by 17% from March 13. At the by 17% from March 13. At the
same time, the dollar continued to gain in value against other major currencies and the price of same time, the dollar continued to gain in value against other major currencies and the price of
Brent crude oil dropped close to $20 per barrel on March 20, as indicated in Brent crude oil dropped close to $20 per barrel on March 20, as indicated in Figure 56. The The
Federal Reserve announced that it would expand a facility to support the municipal bond market. Federal Reserve announced that it would expand a facility to support the municipal bond market.
Britain’s Finance Minister announced an “unprecedented” fiscal package to pay up to 80% of an Britain’s Finance Minister announced an “unprecedented” fiscal package to pay up to 80% of an
employee’s wages and deferring value added taxes by businesses.employee’s wages and deferring value added taxes by businesses.7588 The ECB’s Largarde justified The ECB’s Largarde justified
actions by the Bank during the week to provide liquidityactions by the Bank during the week to provide liquidity by arguing that the “coronavirus by arguing that the “coronavirus
pandemic is a public health emergency unprecedented in recent history.” Market indexes pandemic is a public health emergency unprecedented in recent history.” Market indexes ~~fel~~
fell again on March 23 as the Senate debated the parameters of a new spending again on March 23 as the Senate debated the parameters of a new spending ~~bil~~ bill to support the to support the
economy. Oil prices also continued to economy. Oil prices also continued to ~~fal~~ fall as oil producers appeared to be in a standoff over cuts as oil producers appeared to be in a standoff over cuts
~~to production.~~

~~da70cff6e4d3.~~
70to production. 83 “ECB Announces €750 Billion Pandemic Emergency Purchase Program (PEPP),” European Central Bank, March “ECB Announces €750 Billion Pandemic Emergency Purchase Program (PEPP),” European Central Bank, March
18, 2020. https://www.ecb.europa.eu/press/pr/date/2020/html/ecb.pr200318_1~3949d6f266.en.html. 18, 2020. https://www.ecb.europa.eu/press/pr/date/2020/html/ecb.pr200318_1~3949d6f266.en.html.
7184 Arnold, Martin, “ECB to Launch €750 Billion Purchase Program in Response to Coronavirus,” Arnold, Martin, “ECB to Launch €750 Billion Purchase Program in Response to Coronavirus,” Financial Times, ,
March 18, 2020. https://www.ft.com/content/5919c6fb-1f5f-315d-8353-94f04afcf340. March 18, 2020. https://www.ft.com/content/5919c6fb-1f5f-315d-8353-94f04afcf340.
72 85 Campbell, Peter and Claire Campbell, Peter and Claire Bushey, “Ford, General Motors and Fiat Chrysler AgreeBushey, “Ford, General Motors and Fiat Chrysler Agree Widespread Shutdown,” Widespread Shutdown,”
Financial ~~Tim es~~Times, March 18, 2020. https://www.ft.com/content/feae3808-6949-11ea-800d-da70cff6e4d3. , March 18, 2020. https://www.ft.com/content/feae3808-6949-11ea-800d-da70cff6e4d3.
7386 Henderson, Richard, “Bank-Led Freeze on Stock Buybacks Henderson, Richard, “Bank-Led Freeze on Stock Buybacks ~~Could Spread~~ Could Spread Across USAcross US Market,” Market,” Financial Times, ,
March 18, 2020. https://www.ft.com/content/b1fa1688-68f6-11ea-a3c9-1fe6fedcca75. March 18, 2020. https://www.ft.com/content/b1fa1688-68f6-11ea-a3c9-1fe6fedcca75.
7487 Stubbington, Stubbington, ~~T ommy~~Tommy and Colby Smith, “Investment Veterans and Colby Smith, “Investment Veterans ~~T ry~~Try to Get to Grips With ‘Broken’ Markets,” to Get to Grips With ‘Broken’ Markets,”
Financial ~~Tim es~~Times, March 20, 2020. https://www.ft.com/content/97186440-6aa0-11ea-800d-da70cff6e4d3. , March 20, 2020. https://www.ft.com/content/97186440-6aa0-11ea-800d-da70cff6e4d3.
75 88 Parker, George Parker, Chris Giles, Parker, George Parker, Chris Giles, and Sebastianand Sebastian Payne, “Sunak Payne, “Sunak ~~T urns~~Turns on Financial Firepower to Help Workers,” on Financial Firepower to Help Workers,”
Financial ~~Tim es~~Times, March 20, 2020, https://www.ft.com/content/826d465a-6ac3-11ea-a3c9-1fe6fedcca75. , March 20, 2020, https://www.ft.com/content/826d465a-6ac3-11ea-a3c9-1fe6fedcca75.
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Figure 56. Brent Crude Oil Price per Barrel in Dollars
January 9, 2020 to January 9, 2020 to ~~May 29~~June 18, 2020 , 2020

Source: Markets Insider.Markets Insider. Created by CRS. Created by CRS.
Financial markets continued to Financial markets continued to ~~fal~~ fall on March 23, 2020, as market indexes reached their lowest on March 23, 2020, as market indexes reached their lowest
point since the start of the pandemic crisis. The Federal Reserve announced a number of new point since the start of the pandemic crisis. The Federal Reserve announced a number of new
facilities to provide an unlimited expansion in bond buying programs. The measures included facilities to provide an unlimited expansion in bond buying programs. The measures included
additional purchases of Treasury and mortgage-backed securities; additional funding for additional purchases of Treasury and mortgage-backed securities; additional funding for
employers, consumers, and businesses; establishing the Primary Market Corporate Credit Facility employers, consumers, and businesses; establishing the Primary Market Corporate Credit Facility
(PMCCF) to support issuing new bonds and loans and the Secondary Market Corporate Credit (PMCCF) to support issuing new bonds and loans and the Secondary Market Corporate Credit
Facility (SMCCF) to provide liquidityFacility (SMCCF) to provide liquidity for outstanding corporate bonds; establishing the Term for outstanding corporate bonds; establishing the Term
Asset-Backed Securities Loan Facility (TALF), to support credit to consumers and businesses; Asset-Backed Securities Loan Facility (TALF), to support credit to consumers and businesses;
expanding the Money Market Mutual Fund Liquidity Facility (MMLF) to provide credit to expanding the Money Market Mutual Fund Liquidity Facility (MMLF) to provide credit to
municipalities; and expanding the Commercial Paper Funding Facility (CPFF) to facilitate the municipalities; and expanding the Commercial Paper Funding Facility (CPFF) to facilitate the
flow of credit to municipalities.flow of credit to municipalities.7689 The OECD released a statement encouraging its members to The OECD released a statement encouraging its members to
support “immediate, large-scale and coordinated actions.” These actions included (1) more support “immediate, large-scale and coordinated actions.” These actions included (1) more
international cooperation to address the health crisis; (2) coordinated government actions to international cooperation to address the health crisis; (2) coordinated government actions to
increase spending to support health care, individuals, and firms; (3) coordinated central bank increase spending to support health care, individuals, and firms; (3) coordinated central bank
action to supervise and regulate financial markets; and (4) policies directed at restoring action to supervise and regulate financial markets; and (4) policies directed at restoring
confidence.confidence.77
90 Reacting to the Fed’s announcement, the DJIA closed up 11% on March 24, marking one of the Reacting to the Fed’s announcement, the DJIA closed up 11% on March 24, marking one of the
sharpest reversals in the market index since February 2020. European markets, however, did not sharpest reversals in the market index since February 2020. European markets, however, did not
follow U.S. market indexes as various indicators signaled a decline in business activity in the follow U.S. market indexes as various indicators signaled a decline in business activity in the
Eurozone that was greater than that during the financial crisis and indicated the growing potential Eurozone that was greater than that during the financial crisis and indicated the growing potential
for a severe economic recession.for a severe economic recession.7891 U.S. financial markets were buoyed on March 25 and 26 over U.S. financial markets were buoyed on March 25 and 26 over
passage in Congress of a $2.2 passage in Congress of a $2.2 ~~tril ion~~trillion economic stimulus package. economic stimulus package.

76 89 Federal Reserve Announces Extensive New Measures to Support the Economy, Board of Governors of the Federal , Board of Governors of the Federal
Reserve System, March 23, 2020. https://www.federalreserve.gov/newsevents/pressreleases/monetary20200323b.htm. Reserve System, March 23, 2020. https://www.federalreserve.gov/newsevents/pressreleases/monetary20200323b.htm.
7790 Gurria, Gurria, Angel, Angel, COVID-19: Joint Actions to Win the War,, Organization for Economic Cooperation and Development, Organization for Economic Cooperation and Development,
March 23, 2020. https://www.oecd.org/coronavirus/#op-ed. March 23, 2020. https://www.oecd.org/coronavirus/#op-ed.
7891 Arnold, Martin Arnold and Arnold, Martin Arnold and Valentina Romei, “BusinessValentina Romei, “Business Activity Crashes to Record LowActivity Crashes to Record Low in Eurozone,” in Eurozone,” Financial
~~Tim es~~Times, March 24, 2020. https://www.ft.com/content/f5ebabd4-6dad-11ea-89df-41bea055720b. , March 24, 2020. https://www.ft.com/content/f5ebabd4-6dad-11ea-89df-41bea055720b.
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On March 27, leaders of the G-20 countries announced through a video conference they had On March 27, leaders of the G-20 countries announced through a video conference they had
agreed to inject $5 agreed to inject $5 ~~tril ion~~ trillion into the global economy and to do “whatever it takes to overcome the into the global economy and to do “whatever it takes to overcome the
pandemic.” Also at the meeting, the OECD offered an updated forecast of the viral infection, pandemic.” Also at the meeting, the OECD offered an updated forecast of the viral infection,
which projected that the global economy could shrink by as much as 2% a month. Nine Eurozone which projected that the global economy could shrink by as much as 2% a month. Nine Eurozone
countries, including France, Italy, and Spain countries, including France, Italy, and Spain ~~cal ed~~called on the ECB to consider issuing on the ECB to consider issuing
“coronabonds,” a common European debt instrument to assist Eurozone countries in fighting “coronabonds,” a common European debt instrument to assist Eurozone countries in fighting
COVID-19.COVID-19.7992 The ECB announced that it was removing self-imposed limits that it had followed The ECB announced that it was removing self-imposed limits that it had followed
in previous asset purchase programs that restricted its purchases of any one country’s bonds.in previous asset purchase programs that restricted its purchases of any one country’s bonds.8093
Japan announced that it would adopt an emergency spending package worth $238 Japan announced that it would adopt an emergency spending package worth $238 ~~bil ion~~billion, or , or
equivalent to 10% of the country’s annual GDP.equivalent to 10% of the country’s annual GDP.8194 Despite the various actions, global financial Despite the various actions, global financial
markets turned down March 27 (the DJIA dropped by 900 points) reportedly over volatility in oil markets turned down March 27 (the DJIA dropped by 900 points) reportedly over volatility in oil
markets and concerns that the economic effects of the COVID-19 pandemic were worsening.markets and concerns that the economic effects of the COVID-19 pandemic were worsening.82
95 By March 30, central banks in developing countries from Poland, Columbia, South Africa, the By March 30, central banks in developing countries from Poland, Columbia, South Africa, the
Philippines, Brazil, and the Czech Republic reportedly had begun adopting monetary policies Philippines, Brazil, and the Czech Republic reportedly had begun adopting monetary policies
similar to that of the Federal Reserve to stimulate their economies.similar to that of the Federal Reserve to stimulate their economies.8396 In commodity markets, In commodity markets,
Brent crude oil prices continued to Brent crude oil prices continued to ~~fal~~ fall, reaching a low of $22.76. Strong global demand for , reaching a low of $22.76. Strong global demand for
dollars continued to put upward pressure on the international value of the dollar. In response, the dollars continued to put upward pressure on the international value of the dollar. In response, the
Federal Reserve introduced a new temporary facility that would work with its swap lines to Federal Reserve introduced a new temporary facility that would work with its swap lines to ~~al ow~~allow
central banks and international monetary authorities to enter into repurchase agreements with the central banks and international monetary authorities to enter into repurchase agreements with the
Fed.Fed.8497 From mid-March to mid-April, U.S. workers’ claims for unemployment benefits reached From mid-March to mid-April, U.S. workers’ claims for unemployment benefits reached
over 17 over 17 ~~mil ion~~ million as firms faced a collapse in demand and requirements for employees to self-as firms faced a collapse in demand and requirements for employees to self-
quarantine caused them to begin furloughing or laying off employees. Financial markets began to quarantine caused them to begin furloughing or laying off employees. Financial markets began to
recover somewhat in early Aprilrecover somewhat in early April in response to the accumulated monetary and fiscal policy in response to the accumulated monetary and fiscal policy
initiatives,initiatives, but remained volatile as a result of uncertainty over efforts to reach an output but remained volatile as a result of uncertainty over efforts to reach an output
agreement among oil producers and the continued impact of the viral health effects.agreement among oil producers and the continued impact of the viral health effects.
April 2020
The Federal Reserve announced on April 8 that it was establishing a facility to fund The Federal Reserve announced on April 8 that it was establishing a facility to fund ~~smal~~
small businesses through the Paycheck Protection Program. Japan also announced that it was preparing businesses through the Paycheck Protection Program. Japan also announced that it was preparing
to declare areas around Tokyo to be in a state of emergency and that it would adopt a $989 to declare areas around Tokyo to be in a state of emergency and that it would adopt a $989 ~~bil ion~~
billion funding package.98 92~~funding package.85~~

79 Dombrey, Daniel, Guy Dombrey, Daniel, Guy Chazan, and Jim Brunsden,Chazan, and Jim Brunsden, “Nine Eurozone Countries Issue“Nine Eurozone Countries Issue ~~Call~~ Call for ‘Coronabonds,’” for ‘Coronabonds,’”
Financial ~~Tim es~~Times, March 26, 2020. https://www.ft.com/content/258308f6-6e94-11ea-89df-41bea055720b. March 26, 2020. https://www.ft.com/content/258308f6-6e94-11ea-89df-41bea055720b.
8093 Arnold, Martin and Arnold, Martin and ~~T ommy~~Tommy Stubbington, “ECB Shakes Off Limits on New Stubbington, “ECB Shakes Off Limits on New €750bn Bond-Buying€750bn Bond-Buying Plan,” Plan,” Financial
~~Tim es~~Times, March 27, 2020. https://www.ft.com/content/d775a99e-13b2-444e-8de5-fd2ec6caf4bf. , March 27, 2020. https://www.ft.com/content/d775a99e-13b2-444e-8de5-fd2ec6caf4bf.
81 94 Kajimoto, Kajimoto, ~~T etsushi~~Tetsushi, Izumi Nakagawa,, Izumi Nakagawa, “Japan Plans Huge“Japan Plans Huge ~~Stimulus~~ Stimulus Package to Cushion BlowPackage to Cushion Blow from Coronavirus,” from Coronavirus,”
Reuters, March 27, 2020, https://www.reuters.com/article/us-health-coronavirus-japan-stimulus/japan-plans-huge-, March 27, 2020, https://www.reuters.com/article/us-health-coronavirus-japan-stimulus/japan-plans-huge-
stimulus-package-to-cushion-blow-from-coronavirus-idUSKBN21E0UW. stimulus-package-to-cushion-blow-from-coronavirus-idUSKBN21E0UW.
8295 Georgiadis, Georgiadis, Philip, Hudson Lockett, and Leo Lewis,Philip, Hudson Lockett, and Leo Lewis, “Global Stocks Falter After “Global Stocks Falter After ~~T wo~~Two Days of Big Days of Big Gains,”Gains,” Financial
~~Tim es~~Times, March 27, 2020. https://www.ft.com/content/bc33c31c-f019-4ef8-85df-0014a5406ac1. , March 27, 2020. https://www.ft.com/content/bc33c31c-f019-4ef8-85df-0014a5406ac1.
83 96 Wheatley, Jonathan, “Emerging Market Central Banks Embark on Radical Stimulus Wheatley, Jonathan, “Emerging Market Central Banks Embark on Radical Stimulus Policies,” Policies,” Financial Times, ,
March 30, 2020. https://www.ft.com/content/70398316-3fd5-4428-88ab-6f898ee42fd5. March 30, 2020. https://www.ft.com/content/70398316-3fd5-4428-88ab-6f898ee42fd5.
8497 Politi, James, Brendan Greeley, and Colby Politi, James, Brendan Greeley, and Colby Smith, “Fed Sets Up Scheme to Meet Booming Foreign Demand for Smith, “Fed Sets Up Scheme to Meet Booming Foreign Demand for
Dollars,” Dollars,” Financial ~~Tim es~~Times, March 31, 2020. https://www.ft.com/content/6c976586-a6ea-42ec-a369-9353186c05bb. , March 31, 2020. https://www.ft.com/content/6c976586-a6ea-42ec-a369-9353186c05bb.
~~85 T akeo~~98 Takeo, Yuko and Yoshiaki Nohara, “Japan’s Virus, Yuko and Yoshiaki Nohara, “Japan’s Virus ~~Stimulus~~ Stimulus Package to Come in Package to Come in ~~T wo~~Two Phases,” Phases,” Bloomberg, April 5, , April 5,
2020. https://www.bloomberg.com/news/articles/2020-04-06/japan-s-virus-stimulus-package-to-come-in-two-phases-2020. https://www.bloomberg.com/news/articles/2020-04-06/japan-s-virus-stimulus-package-to-come-in-two-phases-
documents-k8nuj552. documents-k8nuj552.
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On April On April 9, OPEC and Russia agreed to cut oil production by 10 9, OPEC and Russia agreed to cut oil production by 10 ~~mil ion~~ million barrels per day.barrels per day.8699 On On
April 15, G-20 finance ministers and central bank governors announced their support for the April 15, G-20 finance ministers and central bank governors announced their support for the
proposed agreement by Saudi Arabia and Russia to reduce oil production.proposed agreement by Saudi Arabia and Russia to reduce oil production.87100 They also announced They also announced
an agreement to freeze government loan payments until the end of the year to help lowan agreement to freeze government loan payments until the end of the year to help low -income -income
developing countries address the pandemic and asked international financial institutions to do developing countries address the pandemic and asked international financial institutions to do
likewise.likewise.88101 G-7 finance ministers and central bank governors agreed to support the G-20 proposal G-7 finance ministers and central bank governors agreed to support the G-20 proposal
to suspend debt payments by developing countries.to suspend debt payments by developing countries.89102 Eurozone finance ministers announced a Eurozone finance ministers announced a
€500 €500 ~~bil ion~~ billion (about $550 (about $550 ~~bil ion)~~ billion) emergency spending package to support governments, emergency spending package to support governments,
businesses, and workers. Reportedly, the measure businesses, and workers. Reportedly, the measure ~~wil~~ will provide funds to the European Stability provide funds to the European Stability
Mechanism, the European Investment Bank, and for unemployment insurance.Mechanism, the European Investment Bank, and for unemployment insurance.90
103 In other policy areas, the IMF announced that it was doubling its emergency lending capability to In other policy areas, the IMF announced that it was doubling its emergency lending capability to
$100 $100 ~~bil ion,~~ billion, in response to requests from more than 100 countries for assistance.in response to requests from more than 100 countries for assistance.91104 The Bank of The Bank of
England announced that it would take the unprecedented move of temporarily directly financing England announced that it would take the unprecedented move of temporarily directly financing
UK government emergency spending needs through monetary measures rather than through the UK government emergency spending needs through monetary measures rather than through the
typical method of issuing securities to fight the effects of COVID-19.typical method of issuing securities to fight the effects of COVID-19.92105 Secretary-General of the Secretary-General of the
United Nations Guterres declared on April 9, 2020, before the United Nations Security Council United Nations Guterres declared on April 9, 2020, before the United Nations Security Council
that the pandemic poses a significant threat to the maintenance of international peace and security that the pandemic poses a significant threat to the maintenance of international peace and security
and outlined eight specific risks, including the erosion of trust in public institutions, increased and outlined eight specific risks, including the erosion of trust in public institutions, increased
risks from terrorism and bioterrorism, and worsening existing human rights abuses.risks from terrorism and bioterrorism, and worsening existing human rights abuses.93
106 Federal Reserve Chairman Jerome Federal Reserve Chairman Jerome ~~Powel~~ Powell, stating that the U.S. economy was deteriorating “with , stating that the U.S. economy was deteriorating “with
alarming speed,” announced on April 10 that the Fed would provide an additional $2.3 alarming speed,” announced on April 10 that the Fed would provide an additional $2.3 ~~tril ion~~trillion in in
loans, including a new financial facility to assist firms by acquiring shares in exchange traded loans, including a new financial facility to assist firms by acquiring shares in exchange traded
funds that own the debt of lower-rated, riskier firms that are among the most exposed to funds that own the debt of lower-rated, riskier firms that are among the most exposed to
deteriorating economic conditions associated with COVID-19 and low oil prices.deteriorating economic conditions associated with COVID-19 and low oil prices.94107 On April 16, On April 16,
the U.S. Labor Department reported that 5.2 the U.S. Labor Department reported that 5.2 ~~mil ion~~million Americans filed for unemployment insurance Americans filed for unemployment insurance

86 99 Sheppard, David, Anjli Raval, Derek Brower, Sheppard, David, Anjli Raval, Derek Brower, and Henry Foy, “G20 Ministers Meet to Endorse OPEC-Russiaand Henry Foy, “G20 Ministers Meet to Endorse OPEC-Russia Deal to Deal to
SlashSlash Oil Production,” Oil Production,” Financial ~~Tim es~~Times, April 10, 2020. https://www.ft.com/content/c7a1e2e6-8c17-48d5-8c16-, April 10, 2020. https://www.ft.com/content/c7a1e2e6-8c17-48d5-8c16-
edce911b5cbb. edce911b5cbb.
87100 Sheppard, David, Anjli Raval, Derek Brower. Sheppard, David, Anjli Raval, Derek Brower. and Henry Foy, G20 Backs Largest Oil Supplyand Henry Foy, G20 Backs Largest Oil Supply Agreement in History,Agreement in History,
Financial ~~Tim es~~Times, April 15, 2020. https://www.ft.com/content/16ac91d8-42bf-4190-88de-f3d89b2b36f4. , April 15, 2020. https://www.ft.com/content/16ac91d8-42bf-4190-88de-f3d89b2b36f4.
88 101 England, Andrew, England, Andrew, Jonathan Wheatley and James Politi, G20 AgreesJonathan Wheatley and James Politi, G20 Agrees Debt ReliefDebt Relief for Low Income Nations, for Low Income Nations, Financial
~~Tim es~~Times, April 15, 2020. https://www.ft.com/content/5f296d54-d29e-4e87-ae7d-95ca6c0598d5. , April 15, 2020. https://www.ft.com/content/5f296d54-d29e-4e87-ae7d-95ca6c0598d5.
89102 Politi, James and Jonathan Wheatley, G7 Countries Back Debt Relief Politi, James and Jonathan Wheatley, G7 Countries Back Debt Relief For Poorest Nations, For Poorest Nations, Financial Times, April , April
14, 2020. https://www.ft.com/content/c384ed59-1ca3-476f-9b89-eaf5cf31e42c. 14, 2020. https://www.ft.com/content/c384ed59-1ca3-476f-9b89-eaf5cf31e42c.
90 103 Fleming, Sam Fleming, Sam and Mehreen Khan, “Eurozone Countries Strike Emergency Deal on Coronavirus Rescue,”and Mehreen Khan, “Eurozone Countries Strike Emergency Deal on Coronavirus Rescue,” Financial
~~Tim es~~Times, April 9, 2020. https://www.ft.com/content/b984101a-42b8-40db-9a92-6786aec2ba5c. , April 9, 2020. https://www.ft.com/content/b984101a-42b8-40db-9a92-6786aec2ba5c.
91104 Politi, James, “IMF Boosts Emergency Lending Politi, James, “IMF Boosts Emergency Lending Capacity to $100bn,” Capacity to $100bn,” Financial Times, April 9, 2020. , April 9, 2020.
https://www.ft.com/content/e46faadc-456b-4cf8-a2fd-2017702747ab. https://www.ft.com/content/e46faadc-456b-4cf8-a2fd-2017702747ab.
92105 Giles, Giles, Chris and Philip Georgiadis,Chris and Philip Georgiadis, “Bank of England to Directly Finance UK Government’s Extra Spending,” “Bank of England to Directly Finance UK Government’s Extra Spending,”
Financial ~~Tim es~~Times, April 9, 2020. https://www.ft.com/content/664c575b-0f54-44e5-ab78-2fd30ef213cb. , April 9, 2020. https://www.ft.com/content/664c575b-0f54-44e5-ab78-2fd30ef213cb.
93 106 Secretary-General’s Remarks to the Security Council on the COVID-19 Pandemic [as delivered], United Nations, [as delivered], United Nations,
April 9, 2020. https://www.un.org/sg/en/content/sg/statement/2020-04-09/secretary-generals-remarks-the-security-April 9, 2020. https://www.un.org/sg/en/content/sg/statement/2020-04-09/secretary-generals-remarks-the-security-
council-the-covid-19-pandemic-delivered. council-the-covid-19-pandemic-delivered.
94107 Rennison, Joe, Robin Wigglesworth, and Colby Rennison, Joe, Robin Wigglesworth, and Colby Smith, “Federal Reserve Enters New Smith, “Federal Reserve Enters New ~~T erritory~~Territory with Support for with Support for
Risky Debt,” Risky Debt,” Financial ~~Tim es~~Times, April 10, 2020. https://www.ft.com/content/c0b78bc9-0ea8-461c-a5a2-89067ca94ea4. , April 10, 2020. https://www.ft.com/content/c0b78bc9-0ea8-461c-a5a2-89067ca94ea4.
Heather Long, “Heather Long, “ Fed Chair Powell SaysFed Chair Powell Says U.S.U.S. Economy Deteriorating ‘With Alarming Speed,’” Economy Deteriorating ‘With Alarming Speed,’” Washington Post, April , April
9, 2020. https://www.washingtonpost.com/business/2020/04/09/federal-reserve-unveils-over-2-trillion-new-lending-9, 2020. https://www.washingtonpost.com/business/2020/04/09/federal-reserve-unveils-over-2-trillion-new-lending-
small-businesses-city-governments-big-firms/. small-businesses-city-governments-big-firms/.
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during the previous week, raising the total claims since mid-March to over 22 during the previous week, raising the total claims since mid-March to over 22 ~~mil ion.95~~million.108
According to Chinese official statistics, the Chinese economy shrank by 6.8% on an annual basis According to Chinese official statistics, the Chinese economy shrank by 6.8% on an annual basis
during the first quarter of 2020, reportedly the first such contraction in 40 years.during the first quarter of 2020, reportedly the first such contraction in 40 years.96
109 Financial market indicators rose on April 17, reportedly on an upbeat sentiment that actions taken Financial market indicators rose on April 17, reportedly on an upbeat sentiment that actions taken
by the Federal Reserve and other central banks would stabilize conditions in the corporate credit by the Federal Reserve and other central banks would stabilize conditions in the corporate credit
market.market.97110 The price of futures contracts for oil delivery in May 2020 for the U.S. West Texas The price of futures contracts for oil delivery in May 2020 for the U.S. West Texas
Intermediate (WTI) Intermediate (WTI) ~~fel~~ fell to $18 per barrel, the lowest it had been since 2002, reportedly reflecting to $18 per barrel, the lowest it had been since 2002, reportedly reflecting
rising inventories and low global demand.rising inventories and low global demand.98111 Leaders of emerging economies in Latin America and Leaders of emerging economies in Latin America and
Africa argued that the G-20 Africa argued that the G-20 ~~cal~~ call for suspension of interest payments for suspension of interest payments ~~fel~~ fell short of what is needed. short of what is needed.
National leaders from Columbia, Brazil,National leaders from Columbia, Brazil, Mexico, and Chile encouraged the World Bank, the Mexico, and Chile encouraged the World Bank, the
InterAmerican Development Bank and the IMF to double their net lending to Latin America, InterAmerican Development Bank and the IMF to double their net lending to Latin America,
arguing that, “The Covid-19 pandemic is a shock of unprecedented magnitude, uncertain duration arguing that, “The Covid-19 pandemic is a shock of unprecedented magnitude, uncertain duration
and catastrophic consequences that, if not properly addressed, could lead to one of the most tragic and catastrophic consequences that, if not properly addressed, could lead to one of the most tragic
episodes in the history of Latin America and the Caribbean.”episodes in the history of Latin America and the Caribbean.”99112
The price of oil The price of oil ~~fel~~ fell to its lowest level in two decades on April 19, reportedly reflecting a to its lowest level in two decades on April 19, reportedly reflecting a
significant drop in global demand for energy and rising inventories.significant drop in global demand for energy and rising inventories.~~100~~113 Some Eurozone members Some Eurozone members
reportedly argued for the ECB to create a Eurozone “bad bank” to remove reportedly argued for the ECB to create a Eurozone “bad bank” to remove ~~bil ions~~ billions of euros in of euros in
non-performing debts from banks’ balance sheets to provide more capacity for Eurozone banks at non-performing debts from banks’ balance sheets to provide more capacity for Eurozone banks at
a a ~~potential y~~potentially critical time when banks could see an increase in non-performing loans. critical time when banks could see an increase in non-performing loans.~~101~~114 The The
World Bank confirmed that its “pandemic bonds” would pay out $133 World Bank confirmed that its “pandemic bonds” would pay out $133 ~~bil ion~~ billion to the poorest to the poorest
countries affected by the pandemic.countries affected by the pandemic.~~102~~
115 On April On April 21, Agricultural Ministers of the G-20 countries released a joint statement that supported 21, Agricultural Ministers of the G-20 countries released a joint statement that supported
measures to “ensure the health, safety, welfare, and mobility of workers in agriculture and measures to “ensure the health, safety, welfare, and mobility of workers in agriculture and
throughout the food supply chain.” The joint statement also indicated that the G-20 countries throughout the food supply chain.” The joint statement also indicated that the G-20 countries
would adopt measures that are “targeted, proportionate, transparent, and temporary, and that they would adopt measures that are “targeted, proportionate, transparent, and temporary, and that they
do not create unnecessary barriers to trade or disruption to global food supply chains.” The do not create unnecessary barriers to trade or disruption to global food supply chains.” The
statement also indicated that the G-20 would, “guard against any unjustified restrictive measures statement also indicated that the G-20 would, “guard against any unjustified restrictive measures
that could lead to excessive food price volatility in international markets and threaten the food that could lead to excessive food price volatility in international markets and threaten the food
security and nutrition of large proportions of the world population, security and nutrition of large proportions of the world population, ~~especial y~~especially the most vulnerable the most vulnerable
~~living~~ living in environments of low food security.”in environments of low food security.”~~103~~

95116 108 Unemployment Insurance Weekly Claims, Department of Labor, April 16, 2020. https://www.dol.gov/ui/data.pdf. , Department of Labor, April 16, 2020. https://www.dol.gov/ui/data.pdf.
96109 Hale, Hale, ~~T homas~~Thomas, Xinning Liu, and, Xinning Liu, and Yuan Yang, China’s Economy Shrinks for First Yuan Yang, China’s Economy Shrinks for First ~~T ime~~Time in Four Decades, in Four Decades, Financial
~~Tim es~~Times, April 17, 2020. https://www.ft.com/content/8f941520-67ad-471a-815a-d6ba649d22ed. April 17, 2020. https://www.ft.com/content/8f941520-67ad-471a-815a-d6ba649d22ed.
97110 Smith, Colby, Myles McCormick, Smith, Colby, Myles McCormick, ~~T ommy~~Tommy Stubbington, and Stubbington, and Hudson Lockett, US Stocks Extend Rally With Central Hudson Lockett, US Stocks Extend Rally With Central
Bank Safety Net, Bank Safety Net, Financial ~~Tim es~~Times, April 17, 2020. https://www.ft.com/content/5ebbc2d8-ade3-4d5c-86f5-, April 17, 2020. https://www.ft.com/content/5ebbc2d8-ade3-4d5c-86f5-
49b9478fe03d. 49b9478fe03d.
98 111 Sheppard, David, US Sheppard, David, US ~~Crude T umbles~~ Crude Tumbles to 18-year Low as Supply to 18-year Low as Supply Overwhelms Demand, Overwhelms Demand, Financial Times, April 17, , April 17,
2020. https://www.ft.com/content/d0a0cfc3-765c-4b55-ada7-11e0d378d406. 2020. https://www.ft.com/content/d0a0cfc3-765c-4b55-ada7-11e0d378d406.
99112 Wheatley, Jonathan, Michael Stott, and David Pilling, Emerging Economies Call for Wheatley, Jonathan, Michael Stott, and David Pilling, Emerging Economies Call for ~~Mor e~~More Financial Help After G20 Financial Help After G20
Deal, Deal, Financial ~~Tim es~~Times, April 17, 2020. https://www.ft.com/content/203ed8f5-6bb2-4016-80a9-dd99269bfa26. , April 17, 2020. https://www.ft.com/content/203ed8f5-6bb2-4016-80a9-dd99269bfa26.
~~100~~ 113 Lockett, Hudson Lockett and David Sheppard, US Lockett, Hudson Lockett and David Sheppard, US ~~Oil~~ Oil Price Plunges to 20-year Low as Coronavirus Hits Demand, Price Plunges to 20-year Low as Coronavirus Hits Demand,
Financial ~~Tim es~~Times, April 19, 2020. https://www.ft.com/content/a5292644-958d-4065-92e8-ace55d766654. , April 19, 2020. https://www.ft.com/content/a5292644-958d-4065-92e8-ace55d766654.
~~101~~114 Arnold, Martin and Javier Espinoza, ECB Arnold, Martin and Javier Espinoza, ECB Pushes for Eurozone BadPushes for Eurozone Bad Bank to Clean up SouredBank to Clean up Soured Loans, Loans, Financial
~~Tim es~~Times, April 19, 2020. https://www.ft.com/content/15d17d1d-8e1b-4f84-97b4-b62e6ae8f962. , April 19, 2020. https://www.ft.com/content/15d17d1d-8e1b-4f84-97b4-b62e6ae8f962.
~~102~~115 Gross, Gross, Anna, World Bank Pandemic BondsAnna, World Bank Pandemic Bonds to Pay $133m to Poorest Virus-hit Nations, to Pay $133m to Poorest Virus-hit Nations, Financial Times, April 19, , April 19,
2020. https://www.ft.com/content/c8556c9f-72f7-48b4-91bf-c9e32ddab6ff. 2020. https://www.ft.com/content/c8556c9f-72f7-48b4-91bf-c9e32ddab6ff.
~~103~~ 116 G20 Extraordinary Agriculture Ministers Meeting: Statement on COVID-19, G-20, April 21, 2020. https://g20.org/, G-20, April 21, 2020. https://g20.org/
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On April On April 23, the House passed H.R. 266 (P.L. 116-139), the Paycheck Protection Program and 23, the House passed H.R. 266 (P.L. 116-139), the Paycheck Protection Program and
Health Care Enhancement Act, following similar actions by the Senate the previous day. The Health Care Enhancement Act, following similar actions by the Senate the previous day. The
measure measure ~~wil~~ will provide $484 provide $484 ~~bil ion for smal~~ billion for small business loans, health care providers, and COVID-19 business loans, health care providers, and COVID-19
testing. The U.S. Labor Department reported that 4.4 testing. The U.S. Labor Department reported that 4.4 ~~mil ion~~million Americans filed for unemployment Americans filed for unemployment
insurance in the previous week, raising the total that have applied to over 26 insurance in the previous week, raising the total that have applied to over 26 ~~mil ion.104~~million.117 Indicators Indicators
of manufacturing and services activity in Europe dropped to their lowest level since 1990, of manufacturing and services activity in Europe dropped to their lowest level since 1990,
reflecting the impact of the pandemic on the European economy.reflecting the impact of the pandemic on the European economy.~~105~~118 The Bank of England The Bank of England
indicated that it would quadruple its borrowing over the second quarter of 2020, reflecting a indicated that it would quadruple its borrowing over the second quarter of 2020, reflecting a
contraction in the UK economy, lower tax revenues, and increased financial demands to support contraction in the UK economy, lower tax revenues, and increased financial demands to support
fiscal policy measures to fight the pandemic.fiscal policy measures to fight the pandemic.~~106~~119 The Saudi Presidency of the G-20 The Saudi Presidency of the G-20 ~~cal ed~~called on on
international organizations on April 24 to fund an emergency response to the pandemic. The Bank international organizations on April 24 to fund an emergency response to the pandemic. The Bank
of Japan announced on April 27 that it would purchase unlimited amounts of government bonds of Japan announced on April 27 that it would purchase unlimited amounts of government bonds
and quadruple its purchases of corporate debt to keep interest rates low and stimulate the and quadruple its purchases of corporate debt to keep interest rates low and stimulate the
Japanese economy.Japanese economy.~~107~~120
At its April 29 scheduled meeting, the U.S. Federal Open Market Committee left its main interest At its April 29 scheduled meeting, the U.S. Federal Open Market Committee left its main interest
rates unchanged, but reiterated its commitment to use “its full range of tools to support the U.S. rates unchanged, but reiterated its commitment to use “its full range of tools to support the U.S.
economy.” The policy statement concluded that, “The ongoing public health crisis economy.” The policy statement concluded that, “The ongoing public health crisis ~~wil~~ will weigh weigh
heavily on economic activity, employment, and inflation in the near term, and poses considerable heavily on economic activity, employment, and inflation in the near term, and poses considerable
risks to the economic outlook over the medium term.”risks to the economic outlook over the medium term.”~~108~~121 The Federal Reserve also announced a The Federal Reserve also announced a
change in its eligibilitychange in its eligibility requirements for a $500 requirements for a $500 ~~bil ion~~billion lending program for municipalities. The lending program for municipalities. The
statement followed the release of the preliminary estimate of U.S. first quarter GDP, which statement followed the release of the preliminary estimate of U.S. first quarter GDP, which
indicated that the economy had contracted by an annualized rate of 4.8% (revised to 5.0%).indicated that the economy had contracted by an annualized rate of 4.8% (revised to 5.0%).~~109~~
122 On April On April 30, the Department of Labor released its weekly data on applications for unemployment 30, the Department of Labor released its weekly data on applications for unemployment
insurance, which indicated that an additional 3.8 insurance, which indicated that an additional 3.8 ~~mil ion~~ million people had filed for unemployment people had filed for unemployment
insurance during the week, raising the total number who have applied to 30 insurance during the week, raising the total number who have applied to 30 ~~mil ion.110~~million.123 The The
Federal Reserve also announced an expansion in its medium-size business loan program by Federal Reserve also announced an expansion in its medium-size business loan program by
~~al owing~~allowing firms with up to 15,000 employees or with revenues up to $5 firms with up to 15,000 employees or with revenues up to $5 ~~bil ion~~billion to access a new to access a new
~~$600 bil ion~~ $600 billion program. In addition, the Fed lowered the minimum loan amount for program. In addition, the Fed lowered the minimum loan amount for ~~smal~~
small businesses and announced a loan program to assist riskier businesses.businesses and announced a loan program to assist riskier businesses.~~111~~124 At the same time, the At the same time, the
ECB expanded a record low-interest rate loan program for Eurozone banks to support economic ECB expanded a record low-interest rate loan program for Eurozone banks to support economic
activity, while warning that the Eurozone economy could contract between 5% and 12% in 2020 activity, while warning that the Eurozone economy could contract between 5% and 12% in 2020
as it faces, “an economic contraction of a magnitude and speed that are unprecedented in as it faces, “an economic contraction of a magnitude and speed that are unprecedented in

en/media/Pages/pressroom.aspx. en/media/Pages/pressroom.aspx.
~~104~~ 117 Unemployment Insurance Weekly Claims, Department of Labor, April 23, 2020. https://www.dol.gov/ui/data.pdf. , Department of Labor, April 23, 2020. https://www.dol.gov/ui/data.pdf.
~~105~~118 Arnold, Martin and Valentina Romei, European Business Arnold, Martin and Valentina Romei, European Business Activity Crashes Under Coronavirus Lockdowns, Activity Crashes Under Coronavirus Lockdowns,
Financial ~~Tim es~~Times, April 23, 2020. https://www.ft.com/content/8520895f-3249-4a8b-b0e5-881a64e77971. April 23, 2020. https://www.ft.com/content/8520895f-3249-4a8b-b0e5-881a64e77971.
~~106~~ 119 Giles, Giles, Chris, and Chris, and ~~T ommy~~Tommy Stubbington, UK Stubbington, UK ~~T reasury~~Treasury to Quadruple to Quadruple ~~Borrowing~~ Borrowing to £180bn Over Next Quarter, to £180bn Over Next Quarter,
Financial ~~Tim es~~Times, April 23, 2020. https://www.ft.com/content/8886e002-c260-4daa-8b7b-509b3f7e6edb. , April 23, 2020. https://www.ft.com/content/8886e002-c260-4daa-8b7b-509b3f7e6edb.
~~107~~120 Harding, Robin, Bank of Japan Steps up Coronavirus Stimulus Harding, Robin, Bank of Japan Steps up Coronavirus Stimulus With Bond-buyingWith Bond-buying Pledge, Pledge, Financial Times, April , April
27, 2020. https://www.ft.com/content/7ba5c507-df9e-4107-87eb-73afa2c13e91. 27, 2020. https://www.ft.com/content/7ba5c507-df9e-4107-87eb-73afa2c13e91.
~~108~~121 Federal Reserve Issues FOMC Statement, Board of Governors of the Federal Reserve System, April 29, 2020. , Board of Governors of the Federal Reserve System, April 29, 2020.
https://www.federalreserve.gov/newsevents/pressreleases/monetary20200429a.htm. https://www.federalreserve.gov/newsevents/pressreleases/monetary20200429a.htm.
~~109~~ 122 Gross Domestic Product, First Quarter 2020 (Advance Estimate), Bureau of Economic Analysis, April 29, 2020. Bureau of Economic Analysis, April 29, 2020.
https://www.bea.gov/. https://www.bea.gov/.
~~110~~123 Unemployment Insurance Weekly Claims, Department of Labor, April 30, 2020. https://www.dol.gov/ui/data.pdf. , Department of Labor, April 30, 2020. https://www.dol.gov/ui/data.pdf.
~~111~~124 Politi, James, Colby Smith and Robert Armstrong, Federal Reserve Extends $600bn Main Street Lending Program. Politi, James, Colby Smith and Robert Armstrong, Federal Reserve Extends $600bn Main Street Lending Program.
Financial ~~Tim es~~Times, April 30, 2020. https://www.ft.com/content/46fdc853-1d7d-49af-93e8-f12e0d006fc2. , April 30, 2020. https://www.ft.com/content/46fdc853-1d7d-49af-93e8-f12e0d006fc2.
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peacetime.” peacetime.”~~112~~125 The ECB also announced a new non-targeted low-interest rate pandemic The ECB also announced a new non-targeted low-interest rate pandemic
emergency longer-term refinancing operation (PELTROs) to complement its Pandemic emergency longer-term refinancing operation (PELTROs) to complement its Pandemic
Emergency Refinance Operations announced in March.Emergency Refinance Operations announced in March.~~113~~126 House Speaker Pelosi stated that House House Speaker Pelosi stated that House
Democrats were considering a $1 Democrats were considering a $1 ~~tril ion spending bil~~ trillion spending bill to support state and local governments.to support state and local governments.~~114~~127
In a development that seemed incongruous with the broader economic situation, between April 1, In a development that seemed incongruous with the broader economic situation, between April 1,
2020, and April 30, 2020, the DJIA rose more than 3,400 points, or 16%, marking the strongest 2020, and April 30, 2020, the DJIA rose more than 3,400 points, or 16%, marking the strongest
monthly increase since 1987.monthly increase since 1987.~~115~~128
May 2020
On May 5, Germany’s Constitutional court issued a ruling that could prevent the German central On May 5, Germany’s Constitutional court issued a ruling that could prevent the German central
bank, the Bundesbank, from making additional bond purchases under the Pandemic Emergency bank, the Bundesbank, from making additional bond purchases under the Pandemic Emergency
Purchase Program (PEPP). The ECB’s program is intended to ease borrowing costs across the Purchase Program (PEPP). The ECB’s program is intended to ease borrowing costs across the
Eurozone to stimulate economic growth. Eurozone to stimulate economic growth.
The U.S. Census Bureau reported on May 5 that U.S. exports and imports The U.S. Census Bureau reported on May 5 that U.S. exports and imports ~~fel~~ fell in March; exports in March; exports
~~fel~~ fell by a greater amount than imports, thereby increasing the monthly U.S. goods and services by a greater amount than imports, thereby increasing the monthly U.S. goods and services
trade deficit. The trade balance for March was -$44.5 trade deficit. The trade balance for March was -$44.5 ~~bil ion~~billion, an increase of about $4.6 , an increase of about $4.6 ~~bil ion~~
billion over the trade deficit in February. The decline in export and import values reflected lower imports over the trade deficit in February. The decline in export and import values reflected lower imports
and exports of both goods and services. and exports of both goods and services.
On May 6, the European Commission released its economic forecast, which indicated that On May 6, the European Commission released its economic forecast, which indicated that
economic activity in the EU would decline by 7.4% in 2020 as a result of measures to contain the economic activity in the EU would decline by 7.4% in 2020 as a result of measures to contain the
pandemic. The Commission forecast that economic growth would advance by 6.0% in 2021, pandemic. The Commission forecast that economic growth would advance by 6.0% in 2021,
assuming the containment measures can be lifted assuming the containment measures can be lifted ~~gradual y~~gradually, the viral effects remain contained, , the viral effects remain contained,
and that the fiscal and monetary measures implemented by the EU members are effective in and that the fiscal and monetary measures implemented by the EU members are effective in
blunting the negative effects on economies.blunting the negative effects on economies.~~116~~129 On May 7, the Labor Department announced that On May 7, the Labor Department announced that
~~3.2 mil ion~~2.7 million Americans had filed for unemployment insurance during the week, raising the total Americans had filed for unemployment insurance during the week, raising the total
that had filed over the previous seven weeks to 33 that had filed over the previous seven weeks to 33 ~~mil ion.117~~million.130
On May 8, the U.S. Department of Labor announced that 20.5 On May 8, the U.S. Department of Labor announced that 20.5 ~~mil ion~~million Americans had lost their Americans had lost their
jobs in April, pushing the national unemployment rate to 14.5%. Despite the rise in the jobs in April, pushing the national unemployment rate to 14.5%. Despite the rise in the
unemployment rate, the DJIA rose by 2.0%, reportedly based on optimism that the monetary unemployment rate, the DJIA rose by 2.0%, reportedly based on optimism that the monetary
policy actions the Federal Reserve, the ECB, and the Bank of Japan have taken to support policy actions the Federal Reserve, the ECB, and the Bank of Japan have taken to support
financial markets would stabilize and stimulate the markets and optimism that the health crisis is financial markets would stabilize and stimulate the markets and optimism that the health crisis is
~~ebbing.118~~

~~112~~ebbing.131 125 Introductory Statement, European Central Bank, April 29, 2020. https://www.ecb.europa.eu/press/pressconf/2020/, European Central Bank, April 29, 2020. https://www.ecb.europa.eu/press/pressconf/2020/
html/ecb.is200430~ab3058e07f.en.html. html/ecb.is200430~ab3058e07f.en.html.
~~113~~ 126 Arnold, Martin and Arnold, Martin and ~~T ommy~~Tommy Stubbington, ECB Stubbington, ECB Launches Fresh Push to Lend to Banks at UltraLaunches Fresh Push to Lend to Banks at Ultra -low Rates, -low Rates, Financial
~~Tim es~~Times, April 30, 2020. https://www.ft.com/content/cef090d0-97dc-4e75-a4b1-deebfd4afacf. , April 30, 2020. https://www.ft.com/content/cef090d0-97dc-4e75-a4b1-deebfd4afacf.
~~114~~127 Werner, Erica, Pelosi Points to $1 Werner, Erica, Pelosi Points to $1 ~~T rillion~~Trillion Need for State and Local Governments in Next Coronavirus Bill, Need for State and Local Governments in Next Coronavirus Bill, The
Washington Post, April 30, 2020. https://www.washingtonpost.com/us-policy/2020/04/30/congress-coronavirus-, April 30, 2020. https://www.washingtonpost.com/us-policy/2020/04/30/congress-coronavirus-
economy/. economy/.
~~115~~ 128 Henderson, Richard Henderson, Richard Henderson, Robin Wigglesworth,Henderson, Robin Wigglesworth, and Katie Martin, U.S. Stocks Close Out Best Month Since and Katie Martin, U.S. Stocks Close Out Best Month Since
1987 in Global1987 in Global Rebound,Rebound, Financial ~~Tim es~~Times, April 30, 2020. https://www.ft.com/content/88e57ec9-42d4-455d-a045-, April 30, 2020. https://www.ft.com/content/88e57ec9-42d4-455d-a045-
293a6a54837d. 293a6a54837d.
~~116~~129 European Economic Forecast Spring 2020, European Commission, May 2020. , European Commission, May 2020.
https://ec.europa.eu/commission/presscorner/detail/en/ip_20_799. https://ec.europa.eu/commission/presscorner/detail/en/ip_20_799.
~~117~~130 Unemployment Insurance Weekly Claims, Department of Labor, May 5, 2020. https://www.dol.gov/ui/data.pdf. , Department of Labor, May 5, 2020. https://www.dol.gov/ui/data.pdf.
~~118~~131 Platt, Eric, Colby Smith, Adam Platt, Eric, Colby Smith, Adam Samson, and HudsonSamson, and Hudson Lockett, Wall Street closes Lockett, Wall Street closes ~~h igher~~higher despite dire US despite dire US ~~jobs~~ jobs data, data,
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On May 12, House Democrats introduced H.R. 6800, the Heroes Act, to provide a $3 On May 12, House Democrats introduced H.R. 6800, the Heroes Act, to provide a $3 ~~tril ion~~trillion
supplemental spending supplemental spending ~~bil~~ bill for additional financial resources to state and local governments and for additional financial resources to state and local governments and
for other purposes. The measure passed the House on May 15 and was sent to the Senate for for other purposes. The measure passed the House on May 15 and was sent to the Senate for
consideration. On May 13, the UKconsideration. On May 13, the UK Office of National Statistics reported that UK GDP contracted Office of National Statistics reported that UK GDP contracted
by 2.0% in the first quarter, the largest decline in the UK’s GDP since 2008 with by 2.0% in the first quarter, the largest decline in the UK’s GDP since 2008 with al all major major
economic sector affected.economic sector affected.~~119~~132 On May 14, the U.S. Department of Labor announced that an On May 14, the U.S. Department of Labor announced that an
additional additional ~~3.0 mil ion~~2.4 million Americans had filed for unemployment insurance during the previous Americans had filed for unemployment insurance during the previous
week, increasing the total number filingweek, increasing the total number filing for unemployment insurance over the previous eight for unemployment insurance over the previous eight
weeks to 36 weeks to 36 ~~mil ion.120~~million.133
On May 18, German On May 18, German ~~Chancel or~~Chancellor Angela Merkel and French President Emmanuel Macron Angela Merkel and French President Emmanuel Macron
proposed a €500 proposed a €500 ~~bil ion~~ billion (about $620 (about $620 ~~bil ion~~billion) EU recovery fund in an effort to gain a coordinated ) EU recovery fund in an effort to gain a coordinated
EU fiscal response to the pandemic.EU fiscal response to the pandemic.~~121~~134
The Department of Labor announced on May 21 that an additional The Department of Labor announced on May 21 that an additional ~~2.4 mil ion~~ 2.4 million Americans had Americans had
filed for Unemployment Insurance, raising the total to 38.4 filed for Unemployment Insurance, raising the total to 38.4 ~~mil ion~~million over the previous nine over the previous nine
weeks.weeks.~~122~~135
On May 27, European Commission President Ursula von der Leyen proposed a €750 On May 27, European Commission President Ursula von der Leyen proposed a €750 ~~bil ion~~billion
(about $825 (about $825 ~~bil ion~~billion) coronavirus recovery plan to provide loans and grants to the hardest hit EU ) coronavirus recovery plan to provide loans and grants to the hardest hit EU
economies and changes to the EU budget. The Japanese Cabinet proposed a second supplemental economies and changes to the EU budget. The Japanese Cabinet proposed a second supplemental
appropriation measure that includes $296 appropriation measure that includes $296 ~~bil ion~~billion in spending and a total value of about $1.1 in spending and a total value of about $1.1
~~tril ion~~ trillion in loans and guarantees, funded through new bonds.in loans and guarantees, funded through new bonds.~~123~~136
On May 28, the Department of Labor announced that an additional On May 28, the Department of Labor announced that an additional ~~2.1 mil ion~~ 1.9 million (revised) Americans filed Americans filed
for Unemployment Insurance, raising the ten-week total to for Unemployment Insurance, raising the ten-week total to ~~40.8 mil ion.124~~

~~Financial T imes, May 8, 2020. https://www.ft.com/content/a9999ef1-1373-41b7-8d55-d780fd06825d.~~
~~119~~42.6 million.137 June 2020 On June 4, the U.S. Census Bureau reported that U.S. imports fell by 13.7% and exports fell by 20.5% in April, increasing the monthly current account deficit and registering the largest decline in U.S. trade since the global financial crisis.138 The European Central Bank also announced on June 4 that it would double to $1.5 trillion its Pandemic Emergency Purchase Program to stimulate the European economy.139 The DJIA rose by more than 800 points on June 5 as a positive jobs report, apparently signaling to some that the U.S. economy would recover quickly from the pandemic-driven economic downturn.140 OPEC and Russia reportedly agreed on June 7 Financial Times, May 8, 2020. https://www.ft.com/content/a9999ef1-1373-41b7-8d55-d780fd06825d. 132 GDP Monthly Estimate, UK: March 2020, Office for National Statistics, May 13, 2020. , Office for National Statistics, May 13, 2020.
https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/gdpmonthlyestimateuk/march2020https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/gdpmonthlyestimateuk/march2020 . .
~~120~~133 Unemployment Insurance Weekly Claims, Department of Labor, May 14, 2020. https://www.dol.gov/ui/data.pdf. , Department of Labor, May 14, 2020. https://www.dol.gov/ui/data.pdf.
~~121~~134 Fleming, Sam, Fleming, Sam, Victor Mallet, and GuyVictor Mallet, and Guy Chazan, Germany and France Unite in CallChazan, Germany and France Unite in Call for €500 Billion Europe for €500 Billion Europe
Recovery Fund,Recovery Fund, Financial ~~Tim es~~Times, May 18, 2020. https://www.ft.com/content/c23ebc5e-cbf3-4ad8-85aa-032b574d0562. , May 18, 2020. https://www.ft.com/content/c23ebc5e-cbf3-4ad8-85aa-032b574d0562.
~~122~~135 Unemployment Insurance Weekly Claims, Department of Labor, May 21, 2020. https://www.dol.gov/ui/data.pdf. , Department of Labor, May 21, 2020. https://www.dol.gov/ui/data.pdf.
~~123~~136 Harding, Robin, Japan’s Cabinet Approves Extra $1.1 Harding, Robin, Japan’s Cabinet Approves Extra $1.1 ~~T rillion~~Trillion Budget to Counter Recession, Budget to Counter Recession, Financial Times, May , May
27, 2020. https://www.ft.com/content/ce7f3564-c997-339c-ad3d-c6d092fb7f1e. 27, 2020. https://www.ft.com/content/ce7f3564-c997-339c-ad3d-c6d092fb7f1e.
~~124~~ 137 Unemployment Insurance Weekly Claims, Department of Labor, May 29, 2020. https://www.dol.gov/ui/data.pdf. , Department of Labor, May 29, 2020. https://www.dol.gov/ui/data.pdf.
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~~Comparing the Current Crisis and the 2008 Crisis~~
~~Sharp declines in the stock market and broader financial sector turbulence; interest rate cuts and large-scale~~
~~Federal Reserve intervention; and discussions of massive government stimulus packages have led some observers~~
~~to compare the current market reaction to that experienced a little over a decade ago. There are similarities and~~
~~important differences between the current economic crisis and the global financial crisis of 2008/2009. Foremost,~~
~~the earlier crisis was rooted in structural weakness in the U.S. financial sector. Fol owing the col apse of the U.S.~~
~~housing bubble, it became impossible for firms to identify demand and hold inventories across many sectors~~
~~(construction, retail, etc.). This led to massive oversupply and sharp retail losses which extended to other sectors~~
~~of the U.S. economy and eventual y the global economy. Moreover, financial markets across countries were linked~~
~~together by credit default swaps. As the crisis unfolded, large numbers of banks and other financial institutions~~
~~were negatively affected, raising questions about capital sufficiency and reserves. The crisis then quickly engulfed~~
~~credit-rating agencies, mortgage lending companies, and the real estate industry broadly. Market resolution came~~
~~gradual y with a range of monetary and fiscal policy measures that were closely coordinated at the global level.~~
~~These were focused on putting a floor under the fal ing markets, stabilizing banks, and shoring up investor~~
~~confidence to get spending started again. Starting in September 2007, the Federal Reserve cut interest rates from~~
~~over 5% in September 2007 to between 0 and 0.25% before the end of the 2008. Once interest rates approached~~
~~zero, the Fed turned to other so-cal ed “unconventional measures,” including targeted assistance to financial~~
~~institutions, encouraging Congress to pass the Troubled Asset Relief Program (TARP) to prevent the col apse of~~
~~the financial sector and boost consumer spending. Other measures included swap arrangements between the~~
~~Federal Reserve and the European Central Bank and smal er central banks, and so-cal ed “quantitative easing” to~~
~~boost the money supply. On a global level, the United States and other countries tripled the resources of the IMF~~
~~(from $250 bil ion to $750 bil ion) and coordinated domestic stimulus efforts.~~
~~Unlike the 2008 crisis, the current crisis began as a supply shock. As the global economy has become more~~
~~interdependent in recent decades, most products are produced as part of a global value chain (GVC), where an~~
~~item such as a car or mobile device consists of parts manufactured al over the world, and involving multiple~~
~~border crossings before final assembly. The earliest implications of the current crisis came in January as plant~~
~~closures in China and other parts of Asia led to interruptions in the supply chain and concerns ab out dwindling~~
~~inventories. As the virus spread from Asia to Europe, the crisis switched from supply concerns to a broader~~
~~demand crisis as the measures being introduced to contain the spread of the virus (social distancing, travel~~
~~restrictions, cancel ing sporting events, closing shops and restaurants, and mandatory quarantine measures)~~
~~prevent most forms of economic activity from occurring. Thus, unlike the 2008 crisis response, which involved~~
~~liquidity and solvency-related policy measures to get people spending again, the current crisis did not start as a~~
~~financial crisis, but could evolve into one if a recovery in economic activity is delayed. While larger firms may have~~
~~sufficient capital to wait out a crisis, many aspects of the economy (such as restaurants or retail operations)~~
~~operate on very tight margins and would likely not be able to pay employees after closures lasting more than a few~~
~~days. Many people wil also need to balance child care and work during quarantine or social distancing measures.~~
~~During this type of crisis, while monetary policy measures play a part—and the Federal Reserve has once again cut~~
~~rates to near zero—they cannot compensate for the physical interaction that the global economy is dependent~~
~~upon. As a result, fiscal stimulus wil likely play a relatively larger role in this crisis in order to prevent personal and~~
~~corporate bankruptcies during the peak crisis period. Efforts to coordinate U.S. and foreign economic policy~~
~~measures wil also have an important role in mitigating the scale and length of any global economic downtown.~~
~~Policy Responses~~
~~In response to growing concerns over the global economic impact of the pandemic, G-7 finance~~
~~ministers and central bankers released a statement on March 3, 2020, indicating they wil “use al~~
~~appropriate policy tools” to sustain economic growth.125 The Finance Ministers also pledged~~
~~fiscal support to ensure health systems can sustain efforts to fight the outbreak.126 In most cases,~~

~~125 Statement of G-7 Finance Ministers and Central Bank Governors, March 3, 2020. https://home.treasury.gov/news/~~
~~press-releases/sm927. Long, Heather, “ G-7 Leaders Promise to Help Economy as COVID-19 Spreads, But T hey Don’t~~
~~Announce Any New Action,” Washington Post, March 3, 2020. https://www.washingtonpost.com/business/2020/03/~~
~~03/economy-COVID-19-rate-cuts/.~~
~~126 Giles, et al., “Finance Ministers Ready to T ake Action.”~~
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~~link to page 60~~ ~~Global Economic Effects of COVID-19~~

~~however, countries have pursued their own divergent strategies, in some cases including banning~~
~~exports of medical equipment. Following the G-7 statement, the U.S. Federal Reserve (Fed)~~
~~lowered its federal funds rate by 50 basis points, or 0.5%, to a range of 1.0% to 1.25% due to~~
~~concerns about the “evolving risks to economic activity of the COVID-19.”127 At the time, the cut~~
~~was the largest one-time reduction in the interest rate by the Fed since the global financial crisis.~~
~~After a delayed response, other central banks have begun to follow the actions of the G-7~~
~~countries. Most central banks have lowered interest rates and acted to increase liquidity in their~~
~~financial systems through a combination of measures, including lowering capital buffers and~~
~~reserve requirements, creating temporary lending facilities for banks and businesses, and easing~~
~~loan terms. In addition, national governments have adopted various fiscal measures to sustain~~
~~economic activity. In general, these measures include making payments directly to households,~~
~~temporarily deferring tax payments, extending unemployment insurance, and increasing~~
~~guarantees and loans to businesses.~~
~~See the Appendix to this report for detailed information about the policy actions by individual~~
~~governments.128~~
~~The United States~~
~~Recognizing the growing impact the pandemic is having on financial markets and economic~~
~~growth, the Federal Reserve (Fed) has taken a number of steps to promote economic and financial~~
~~stability involving the Fed’s monetary policy and “lender of last resort” roles. Some of these~~
~~actions are intended to stimulate economic activity by reducing interest rates and others are~~
~~intended to provide liquidity to financial markets so that firms have access to needed funding. In~~
~~announcing its decisions, the Fed indicated that “[t]he COVID-19 outbreak has harmed~~
~~communities and disrupted economic activity in many countries, including the United States.~~
~~Global financial conditions have also been significantly affected.129” On March 31, 2020, the~~
~~Trump Administration announced that it was suspending for 90 days tariffs it had placed on~~
~~imports of apparel and light trucks from China, but not on other consumer goods and metals.130~~
~~On April 29, the Bureau of Economic Analysis released first quarter U.S. GDP data indicating~~
~~that the U.S. economy had contracted by 4.8% at an annual rate, as indicated in Figure 6. A~~
~~decline in economic activity of 30% or more was recorded in motor vehicles and parts, recreation,~~
~~food services and accommodation and transportation sectors, reflecting the quarantine measures~~
~~adopted across the country. In contrast to the other sectors of the economy, food and beverage~~
~~consumption increased by 25% as a result of the switch by individuals from eating at restaurants~~
~~and other commercial food service establishments to preparing and eating food at home.~~

~~127 Federal Reserve Releases FOMC Statement, March 3, 2020, https://www.federalreserve.gov/newsevents/~~
~~pressreleases/monetary20200303a.htm.~~
~~128 Stage Three Proposal, U.S. Department of the T reasury, March 17, 2020. https://www.washingtonpost.com/context/~~
~~department -of-treasury-proposal-for-COVID-19-response/6c2d2ed5-a18b-43d2-8124-28d394fa51ff/?itid=~~
~~lk_inline_manual_3.~~
~~129 Federal Reserve Issues FOMC Statement, March 15, 2020. https://www.federalreserve.gov/newsevents/~~
~~pressreleases/monetary20200315a.htm.~~
~~130 Politi, James and Aime Williams, “T rump to Suspend Some T ariffs for 90 Days,” Financial Times, March 31, 2020.~~
~~https://www.ft.com/content/46add447-2048-4348-bd34-2088ad0e3bc8.~~
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~~Figure 6. U.S. GDP, Percent Change From Preceding Quarter, 1st Quarter 2020~~

Source: Bureau of Economic Analysis. Created by CRS.
~~On May 5, the U.S. Census Bureau reported an increase in the overall U.S. trade deficit on a month-~~
~~to-month basis of $4.5 billion, reflecting lower amounts of exports and imports of both goods and~~
~~services. Exports and imports of both goods and services fell from the previous month, although the~~
~~deficit in goods trade imports increased from $61 billion in February to $65.6 billion in March; the~~
~~surplus in services trade fell from $21.23 billion to $21.18 billion.~~
~~On May 8, the Department of Labor reported that the U.S. non-farm unemployment rate in April~~
~~increased by 20 million, raising the total number of unemployed Americans 23 million, or an~~
~~unemployment rate of 14% of a total civilian labor force of 156 million. The unemployment rate~~
~~does not include approximately 10 million workers who are involuntarily working part-time and~~
~~another 9 million individuals seeking employment. As indicated in Figure 7, the number of~~
~~unemployed individuals increased the most in the leisure and hospitality sector, reflecting national~~
~~quarantining policies to reduce the spread of COVID-19 through social contact. The employment~~
~~losses were widely spread across the economy, affecting every non-farm sector and all labor groups.~~
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~~Global Economic Effects of COVID-19~~

~~Figure 7. Change in U.S. Employment by Major Industrial Sector~~

Source: The Employment Situation, Bureau of Labor Statistics, April 2020. Created by CRS.
~~In a speech on May 13, Federal Reserve Chairman Jerome Powel stated that the Federal~~
~~Reserve’s analysis indicated that of individuals working in February, “almost 40 percent of those~~
~~in households making less than $40,000 a year had lost a job in March.”131 Chairman Powel also~~
~~indicated that given the extraordinary nature of the current economic downturn that the Fed~~
~~would, “continue to use our tools to their fullest until the crisis has passed and the economic~~
~~recovery is wel under way.” In characterizing the current situation, Chairman Powel said,~~
~~The overall policy response to date has provided a measure of relief and stability, and wil~~
~~provide some support to the recovery when it comes. But the coronavirus crisis raises~~
~~longer-term concerns as well. The record shows that deeper and longer recessions can leave~~
~~behind lasting damage to the productive capacity of the economy. Avoidable household~~
~~and business insolvencies can weigh on growth for years to come. Long stretches of~~
~~unemployment can damage or end workers' careers as their skills lose value and~~
~~professional networks dry up, and leave families in greater debt. The loss of thousands of~~
~~small- and medium-sized businesses across the country would destroy the life's work and~~
~~family legacy of many business and community leaders and limit the strength of the~~
~~recovery when it comes. These businesses are a principal source of job creation—~~
~~something we will sorely need as people seek to return to work. A prolonged recession and~~
~~weak recovery could also discourage business investment and expansion, further limiting~~
~~the resurgence of jobs as well as the growth of capital stock and the pace of technological~~
~~advancement. The result could be an extended period of low productivity growth and~~
~~stagnant incomes.132~~

~~131 Current Economic Issues; Speech at the Peterson Institute for International Economics, Jerome H. Powell, May 13,~~
~~2020.~~
~~132 Ibid.~~
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~~Monetary Policy133~~
~~Forward Guidance~~
~~Forward guidance~~ ~~refers to Fed public communications on its future plans for short-term interest~~
~~rates, and it took many forms following the 2008 financial crisis. As monetary policy returned to~~
~~normal in recent years, forward guidance was phased out. It is being used again today. For~~
~~example, when the Fed reduced short-term rates to zero on March 15, it announced that it~~
~~“expects to maintain this target range until it is confident that the economy has weathered recent~~
~~events and is on track to achieve its maximum employment and price stability goals.”~~
~~Quantitative Easing~~
~~Large-scale asset purchases, popularly referred to as quantitative easing or QE, were also used~~
~~during the financial crisis. Under QE, the Fed expanded its balance sheet by purchasing~~
~~securities. Three rounds of QE from 2009 to 2014 increased the Fed’s securities holdings by $3.7~~
~~tril ion.~~
~~On March 23, the Fed announced that it would increase its purchases of Treasury securities and~~
~~mortgage-backed securities (MBS)—including commercial MBS—issued by government~~
~~agencies or government-sponsored enterprises to “the amounts needed to support smooth market~~
~~functioning and effective transmission of monetary policy... ” These would be undertaken at the~~
~~unprecedented rate of up to $125 bil ion daily during the week of March 23. As a result, the value~~
~~of the Fed’s balance sheet is projected to exceed its post-financial crisis peak of $4.5 tril ion. One~~
~~notable difference from previous rounds of QE is that the Fed is purchasing securities of different~~
~~maturities, so the effect likely wil not be concentrated on long-term rates.~~
~~Actions to Provide Liquidity~~
~~Reserve Requirements~~
~~On March 15, the Fed announced that it was reducing reserve requirements—the amount of vault~~
~~cash or deposits at the Fed that banks must hold against deposits—to zero for the first time ever.~~
~~As the Fed noted in its announcement, because bank reserves are currently so abundant, reserve~~
~~requirements “do not play a significant role” in monetary policy.~~
~~Term Repos~~
~~The Fed can temporarily provide liquidity to financial markets by lending cash through~~
~~repurchase agreements (repos) with primary dealers (i.e., large government securities dealers who~~
~~are market makers). Before the financial crisis, this was the Fed’s routine method for targeting the~~
~~federal funds rate. Following the financial crisis, the Fed’s large balance sheet meant that repos~~
~~were no longer needed, until they were revived in September 2019. On March 12, the Fed~~
~~announced it would offer a three-month repo of $500 bil ion and a one-month repo of $500~~
~~bil ion on a weekly basis through the end of the month in addition to the shorter-term repos it had~~
~~already been offering. These repos would be larger and longer than those offered since~~
~~September. On March 31, the Fed announced the Foreign and International Monetary Authorities~~
~~(FIMA) Repo Facility, which works like the foreign repo pool in reverse. This facility al ows~~

~~133 T his section was prepared by Marc Labonte, Specialist in Macroeconomic Policy, Government and Finance~~
~~Division, CRS. CRS Insight IN11259, Federal Reserve: Recent Actions in Response to COVID-19, by Marc Labonte.~~
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~~foreign central banks to convert their U.S. Treasury holdings into U.S. dollars on an overnight~~
~~basis. The Fed wil charge a (typical y) above market interest rate of 0.25 percentage points above~~
~~the interest rate paid on bank reserves. The facility is intended to work in tandem with currency~~
~~swap lines to provide additional dollars to meet global demand and is available to a broader group~~
~~of central banks than the swap lines.~~
~~Discount Window~~
~~In its March 15 announcement, the Fed encouraged banks (insured depository institutions) to~~
~~borrow from the Fed’s discount window to meet their liquidity needs. This is the Fed’s traditional~~
~~tool in its “lender of last resort” function. The Fed also encouraged banks to use intraday credit~~
~~available through the Fed’s payment systems as a source of liquidity.~~
~~Foreign Central Bank Swap Lines~~
~~Both domestic and foreign commercial banks rely on short-term borrowing markets to access~~
~~U.S. dollars needed to fund their operations and meet their cash flow needs. But in an~~
~~environment of strained liquidity, only banks operating in the United States can access the~~
~~discount window. Therefore, the Fed has standing “swap lines” with major foreign central banks~~
~~to provide central banks with U.S. dollar funding that they can in turn lend to private banks in~~
~~their jurisdictions. On March 15, the Fed reduced the cost of using those swap lines and on March~~
~~19 it extended swap lines to nine more central banks. On March 31, 2020, the Fed set up a new~~
~~temporary facility to work in tandem with the swap lines to provide additional dollars to meet~~
~~global demand. The new facility al ows central banks and international monetary authorities to~~
~~exchange their U.S. Treasury securities held with the Federal Reserve for U.S. dollars, which can~~
~~then be made available to institutions in their jurisdictions.134~~
~~Emergency Credit Facilities for the Nonbank Financial System~~
~~In 2008, the Fed created a series of emergency credit facilities to support liquidity in the nonbank~~
~~financial system. This extended the Fed’s traditional role as lender of last resort from the banking~~
~~system to the overal financial system for the first time since the Great Depression. To create~~
~~these facilities, the Fed relied on its emergency lending authority (Section 13(3) of the Federal~~
~~Reserve Act). To date, the Fed has created six facilities—some new, and some reviving 2008~~
138 Monthly U.S. International Trade in Goods and Services in April 2020, Census Bureau, June 4, 2020. https://www.census.gov/foreign-trade/data/index.html 139 Arnold, Martin, ECB Boosts Bond-Buying Stimulus Package by €600, Financial Times, June 4, 2020. https://www.ft.com/content/c59ab92d-e614-4284-a028-46ee3bcf92f9. 140 Telford, Taylor, and Thomas Heath, Dow Soars 1,000 Points as Wall Street Closes in on Pre-Pandemic Levels, The Congressional Research Service 29 Global Economic Effects of COVID-19 to maintain their cuts in oil production for one additional month in an effort to raise international oil prices.141 On June 8, the DJIA rose nearly 2% reportedly on positive jobs data, extending gains in the value of the index and rising to its highest level since late February.142 Most foreign markets did similarly rise. The World Bank forecasted that emerging and developing economies would contract in 2020 for the first time in 60 years.143 On June 11, the DJIA fell by 1,800 points, or 6.9% reportedly on fears that a spike in new coronavirus cases signaled that the pandemic was not contained and over economic growth projections by the Federal Reserve that were interpreted as gloomy.144 According to a report by Eurostat on June 12, industrial production in the Eurozone fell by 17.1% in April, reportedly the largest decline in production recorded since records began in 1991. The decline reflects lower levels of economic activity in manufacturing and construction throughout the Eurozone.145 The Federal Reserve released its semi-annual Monetary Policy Report.146 The Institute of International Finance reported on June 15, that capital outflows from developing economies had reversed with funds flowing back into developing economies, primarily by bond issuance through the international bond market, rather than by refinancing existing debt.147 In testimony before the Senate Banking Committee on June 17, Federal Reserve Chairman Powell stressed that although there were positive signs that U.S. economic growth was beginning to rebound, there was “significant uncertainty” about the timing and strength of the recovery.148 On June 17, the Bank of Japan announced that it was maintaining its low interest rates even as it increased its coronavirus lending facility to $1 trillion.149 The U.S. Energy Information Administration reported that U.S. crude oil production fell to its lowest point since March 2018, while stockpiles reached record highs. The price of Brent crude reached $41 per barrel, Washington Post, June 5, 2020. https://www.washingtonpost.com/business/2020/06/05/stocks-market-today-coronavirus-economy/. 141 Sheppard, David, Anjli Raval, and Derek Brower, OPEC and Russia Agree to Extend Record Oil Supply Cuts, Financial Times, June 7, 2020. https://www.ft.com/content/88747416-0fc4-4808-999f-753793589ca7. 142 Dempsey, Harry, Bryce Elder, and Hudson Lockett, U.S. Stocks Erase Losses for the Year, Financial Times, June 8, 2020. https://www.ft.com/content/1dfaeb58-6d65-4f17-b710-b1ebc6622649. 143 Politi, James, Emerging Economies Forecast to Shrink for First Time in 60 Years, Financial Times, June 8, 2020. https://www.ft.com/content/47998ee3-b2d3-4066-a914-edbf60b797b5. 144 Seigel, Rachel and Thomas Heath, Dow Slides More Than 1,800 Points on Fears of Coronavirus Resurgence, More Economic Pain, The Washington Post, June 11, 2020. https://www.washingtonpost.com/business/2020/06/11/markets-today-fed-coronavirus/. 145 Arnold, Martin, Eurozone Industrial Production Falls by Record 17.1% in April, Financial Times, June 12, 2020. https://www.ft.com/content/e3301cd6-27ce-35f0-829a-c6613849b378. 146 Board of Governors of the Federal Reserve System, Monetary Policy Report, June 12, 2020. https://www.federalreserve.gov/monetarypolicy/2020-06-mpr-summary.htm 147 Wheatley, Jonathan, Developing Economies Borrow More Despite Debt Relief Initiative, Financial Times, June 15, 2020. https://www.ft.com/content/54c545aa-01b5-4e95-8adc-e680f5d82be1. 148 Powell, Jerome H., Semiannual Monetary Report to the Congress, June 16, 2020. https://www.federalreserve.gov/newsevents/testimony/powell20200616a.htm. 149 Harding, Robin, Bank of Japan Pledges $1 trillion in Coronavirus Lending, Financial Times, June 17, 2020. https://www.ft.com/content/5d8e5df2-dfb6-44f1-a434-ab8a745d37ba. Congressional Research Service 30 Global Economic Effects of COVID-19 encouraging some U.S. producers to consider restarting wells that were closed when prices dropped to around $20 per barrel.150 On June 18, the Department of Labor announced that an additional 1.5 million Americans had filed for unemployment during the week, raising the thirteen week total to 45.7 million Americans.151 During May, U.S. retail sales increased by 17.7% as some businesses began reopening. 150 Brower, Derek, U.S. Oil Production Drops to Lowest Point Since 2018, Financial Times, June 17, 2020. https://www.ft.com/content/6b877160-28e4-4ddf-8959-2a7cd0acd4ba. 151 Unemployment Insurance Weekly Claims, Department of Labor, June 18, 2020. https://www.dol.gov/ui/data.pdf Congressional Research Service 31 Global Economic Effects of COVID-19 Comparing the Current Crisis and the 2008 Crisis Sharp declines in the stock market and broader financial sector turbulence; interest rate cuts and large-scale Federal Reserve intervention; and discussions of massive government stimulus packages have led some observers to compare the current market reaction to that experienced a little over a decade ago. There are similarities and important differences between the current economic crisis and the global financial crisis of 2008/2009. Foremost, the earlier crisis was rooted in structural weakness in the U.S. financial sector. Fol owing the col apse of the U.S. housing bubble, it became impossible for firms to identify demand and hold inventories across many sectors (construction, retail, etc.). This led to massive oversupply and sharp retail losses which extended to other sectors of the U.S. economy and eventual y the global economy. Moreover, financial markets across countries were linked together by credit default swaps. As the crisis unfolded, large numbers of banks and other financial institutions were negatively affected, raising questions about capital sufficiency and reserves. The crisis then quickly engulfed credit-rating agencies, mortgage lending companies, and the real estate industry broadly. Market resolution came gradually with a range of monetary and fiscal policy measures that were closely coordinated at the global level. These were focused on putting a floor under the falling markets, stabilizing banks, and shoring up investor confidence to get spending started again. Starting in September 2007, the Federal Reserve cut interest rates from over 5% in September 2007 to between 0 and 0.25% before the end of the 2008. Once interest rates approached zero, the Fed turned to other so-called “unconventional measures,” including targeted assistance to financial institutions, encouraging Congress to pass the Troubled Asset Relief Program (TARP) to prevent the col apse of the financial sector and boost consumer spending. Other measures included swap arrangements between the Federal Reserve and the European Central Bank and smaller central banks, and so-called “quantitative easing” to boost the money supply. On a global level, the United States and other countries tripled the resources of the IMF (from $250 bil ion to $750 bil ion) and coordinated domestic stimulus efforts. Unlike the 2008 crisis, the current crisis began as a supply shock. As the global economy has become more interdependent in recent decades, most products are produced as part of a global value chain (GVC), where an item such as a car or mobile device consists of parts manufactured all over the world, and involving multiple border crossings before final assembly. The earliest implications of the current crisis came in January as plant closures in China and other parts of Asia led to interruptions in the supply chain and concerns about dwindling inventories. As the virus spread from Asia to Europe, the crisis switched from supply concerns to a broader demand crisis as the measures being introduced to contain the spread of the virus (social distancing, travel restrictions, cancelling sporting events, closing shops and restaurants, and mandatory quarantine measures) prevent most forms of economic activity from occurring. Thus, unlike the 2008 crisis response, which involved liquidity and solvency-related policy measures to get people spending again, the current crisis did not start as a financial crisis, but could evolve into one if a recovery in economic activity is delayed. While larger firms may have sufficient capital to wait out a crisis, many aspects of the economy (such as restaurants or retail operations) operate on very tight margins and would likely not be able to pay employees after closures lasting more than a few days. Many people wil also need to balance child care and work during quarantine or social distancing measures. During this type of crisis, while monetary policy measures play a part—and the Federal Reserve has once again cut rates to near zero—they cannot compensate for the physical interaction that the global economy is dependent upon. As a result, fiscal stimulus wil likely play a relatively larger role in this crisis in order to prevent personal and corporate bankruptcies during the peak crisis period. Efforts to coordinate U.S. and foreign economic policy measures wil also have an important role in mitigating the scale and length of any global economic downtown. Policy Responses In response to growing concerns over the global economic impact of the pandemic, G-7 finance ministers and central bankers released a statement on March 3, 2020, indicating they will “use all appropriate policy tools” to sustain economic growth.152 The Finance Ministers also pledged fiscal support to ensure health systems can sustain efforts to fight the outbreak.153 In most cases, 152 Statement of G-7 Finance Ministers and Central Bank Governors, March 3, 2020. https://home.treasury.gov/news/press-releases/sm927. Long, Heather, “G-7 Leaders Promise to Help Economy as COVID-19 Spreads, But They Don’t Announce Any New Action,” Washington Post, March 3, 2020. https://www.washingtonpost.com/business/2020/03/03/economy-COVID-19-rate-cuts/. 153 Giles, et al., “Finance Ministers Ready to Take Action.” Congressional Research Service 32 link to page 66 Global Economic Effects of COVID-19 however, countries have pursued their own divergent strategies, in some cases including banning exports of medical equipment. Following the G-7 statement, the U.S. Federal Reserve (Fed) lowered its federal funds rate by 50 basis points, or 0.5%, to a range of 1.0% to 1.25% due to concerns about the “evolving risks to economic activity of the COVID-19.”154 At the time, the cut was the largest one-time reduction in the interest rate by the Fed since the global financial crisis. After a delayed response, other central banks have begun to follow the actions of the G-7 countries. Most central banks have lowered interest rates and acted to increase liquidity in their financial systems through a combination of measures, including lowering capital buffers and reserve requirements, creating temporary lending facilities for banks and businesses, and easing loan terms. In addition, national governments have adopted various fiscal measures to sustain economic activity. In general, these measures include making payments directly to households, temporarily deferring tax payments, extending unemployment insurance, and increasing guarantees and loans to businesses. See the Appendix to this report for detailed information about the policy actions by individual governments.155 The United States Recognizing the growing impact the pandemic is having on financial markets and economic growth, the Federal Reserve (Fed) has taken a number of steps to promote economic and financial stability involving the Fed’s monetary policy and “lender of last resort” roles. Some of these actions are intended to stimulate economic activity by reducing interest rates and others are intended to provide liquidity to financial markets so that firms have access to needed funding. In announcing its decisions, the Fed indicated that “[t]he COVID-19 outbreak has harmed communities and disrupted economic activity in many countries, including the United States. Global financial conditions have also been significantly affected.156” On March 31, 2020, the Trump Administration announced that it was suspending for 90 days tariffs it had placed on imports of apparel and light trucks from China, but not on other consumer goods and metals.157 On April 29, the Bureau of Economic Analysis released first quarter U.S. GDP data indicating that the U.S. economy had contracted by 4.8% at an annual rate, as indicated in Figure 7. A decline in economic activity of 30% or more was recorded in motor vehicles and parts, recreation, food services and accommodation and transportation sectors, reflecting the quarantine measures adopted across the country. In contrast to the other sectors of the economy, food and beverage consumption increased by 25% as a result of the switch by individuals from eating at restaurants and other commercial food service establishments to preparing and eating food at home. 154 Federal Reserve Releases FOMC Statement, March 3, 2020, https://www.federalreserve.gov/newsevents/pressreleases/monetary20200303a.htm. 155 Stage Three Proposal, U.S. Department of the Treasury, March 17, 2020. https://www.washingtonpost.com/context/department-of-treasury-proposal-for-COVID-19-response/6c2d2ed5-a18b-43d2-8124-28d394fa51ff/?itid=lk_inline_manual_3. 156 Federal Reserve Issues FOMC Statement, March 15, 2020. https://www.federalreserve.gov/newsevents/pressreleases/monetary20200315a.htm. 157 Politi, James and Aime Williams, “Trump to Suspend Some Tariffs for 90 Days,” Financial Times, March 31, 2020. https://www.ft.com/content/46add447-2048-4348-bd34-2088ad0e3bc8. Congressional Research Service 33 Global Economic Effects of COVID-19 Figure 7. U.S. GDP, Percent Change From Preceding Quarter, 1st Quarter 2020 Source: Bureau of Economic Analysis. Created by CRS. On May 5, the U.S. Census Bureau reported an increase in the overall U.S. trade deficit on a month-to-month basis of $4.5 billion, reflecting lower amounts of exports and imports of both goods and services. Exports and imports of both goods and services fell from the previous month, although the deficit in goods trade imports increased from $61 billion in February to $65.6 billion in March; the surplus in services trade fell from $21.23 billion to $21.18 billion. On May 8, the Department of Labor reported that the U.S. non-farm unemployment rate in April increased by 20 million, raising the total number of unemployed Americans 23 million, or an unemployment rate of 14% of a total civilian labor force of 156 million. The unemployment rate does not include approximately 10 million workers who are involuntarily working part-time and another 9 million individuals seeking employment. As indicated in Figure 8, the number of unemployed individuals increased the most in the leisure and hospitality sector, reflecting national quarantining policies to reduce the spread of COVID-19 through social contact. The employment losses were widely spread across the economy, affecting every non-farm sector and all labor groups. Figure 8. Change in U.S. Employment by Major Industrial Sector Source: The Employment Situation, Bureau of Labor Statistics, April, May 2020. Created by CRS. Congressional Research Service 34 Global Economic Effects of COVID-19 In a speech on May 13, Federal Reserve Chairman Jerome Powell stated that the Federal Reserve’s analysis indicated that of individuals working in February, “almost 40 percent of those in households making less than $40,000 a year had lost a job in March.”158 Chairman Powell also indicated that given the extraordinary nature of the current economic downturn that the Fed would, “continue to use our tools to their fullest until the crisis has passed and the economic recovery is well under way.” In characterizing the current situation, Chairman Powell said, The overall policy response to date has provided a measure of relief and stability, and will provide some support to the recovery when it comes. But the coronavirus crisis raises longer-term concerns as well. The record shows that deeper and longer recessions can leave behind lasting damage to the productive capacity of the economy. Avoidable household and business insolvencies can weigh on growth for years to come. Long stretches of unemployment can damage or end workers' careers as their skills lose value and professional networks dry up, and leave families in greater debt. The loss of thousands of small- and medium-sized businesses across the country would destroy the life's work and family legacy of many business and community leaders and limit the strength of the recovery when it comes. These businesses are a principal source of job creation—something we will sorely need as people seek to return to work. A prolonged recession and weak recovery could also discourage business investment and expansion, further limiting the resurgence of jobs as well as the growth of capital stock and the pace of technological advancement. The result could be an extended period of low productivity growth and stagnant incomes.159 Monetary Policy160 Forward Guidance Forward guidance refers to Fed public communications on its future plans for short-term interest rates, and it took many forms following the 2008 financial crisis. As monetary policy returned to normal in recent years, forward guidance was phased out. It is being used again today. For example, when the Fed reduced short-term rates to zero on March 15, it announced that it “expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.” Quantitative Easing Large-scale asset purchases, popularly referred to as quantitative easing or QE, were also used during the financial crisis. Under QE, the Fed expanded its balance sheet by purchasing securities. Three rounds of QE from 2009 to 2014 increased the Fed’s securities holdings by $3.7 trillion. On March 23, the Fed announced that it would increase its purchases of Treasury securities and mortgage-backed securities (MBS)—including commercial MBS—issued by government agencies or government-sponsored enterprises to “the amounts needed to support smooth market functioning and effective transmission of monetary policy.... ” These would be undertaken at the unprecedented rate of up to $125 billion daily during the week of March 23. As a result, the value of the Fed’s balance sheet is projected to exceed its post-financial crisis peak of $4.5 trillion. One 158 Current Economic Issues; Speech at the Peterson Institute for International Economics, Jerome H. Powell, May 13, 2020. 159 Ibid. 160 This section was prepared by Marc Labonte, Specialist in Macroeconomic Policy, Government and Finance Division, CRS. CRS Insight IN11259, Federal Reserve: Recent Actions in Response to COVID-19, by Marc Labonte. Congressional Research Service 35 Global Economic Effects of COVID-19 notable difference from previous rounds of QE is that the Fed is purchasing securities of different maturities, so the effect likely will not be concentrated on long-term rates. Actions to Provide Liquidity Reserve Requirements On March 15, the Fed announced that it was reducing reserve requirements—the amount of vault cash or deposits at the Fed that banks must hold against deposits—to zero for the first time ever. As the Fed noted in its announcement, because bank reserves are currently so abundant, reserve requirements “do not play a significant role” in monetary policy. Term Repos The Fed can temporarily provide liquidity to financial markets by lending cash through repurchase agreements (repos) with primary dealers (i.e., large government securities dealers who are market makers). Before the financial crisis, this was the Fed’s routine method for targeting the federal funds rate. Following the financial crisis, the Fed’s large balance sheet meant that repos were no longer needed, until they were revived in September 2019. On March 12, the Fed announced it would offer a three-month repo of $500 billion and a one-month repo of $500 billion on a weekly basis through the end of the month in addition to the shorter-term repos it had already been offering. These repos would be larger and longer than those offered since September. On March 31, the Fed announced the Foreign and International Monetary Authorities (FIMA) Repo Facility, which works like the foreign repo pool in reverse. This facility allows foreign central banks to convert their U.S. Treasury holdings into U.S. dollars on an overnight basis. The Fed will charge a (typically) above market interest rate of 0.25 percentage points above the interest rate paid on bank reserves. The facility is intended to work in tandem with currency swap lines to provide additional dollars to meet global demand and is available to a broader group of central banks than the swap lines. Discount Window In its March 15 announcement, the Fed encouraged banks (insured depository institutions) to borrow from the Fed’s discount window to meet their liquidity needs. This is the Fed’s traditional tool in its “lender of last resort” function. The Fed also encouraged banks to use intraday credit available through the Fed’s payment systems as a source of liquidity. Foreign Central Bank Swap Lines Both domestic and foreign commercial banks rely on short-term borrowing markets to access U.S. dollars needed to fund their operations and meet their cash flow needs. But in an environment of strained liquidity, only banks operating in the United States can access the discount window. Therefore, the Fed has standing “swap lines” with major foreign central banks to provide central banks with U.S. dollar funding that they can in turn lend to private banks in their jurisdictions. On March 15, the Fed reduced the cost of using those swap lines and on March 19 it extended swap lines to nine more central banks. On March 31, 2020, the Fed set up a new temporary facility to work in tandem with the swap lines to provide additional dollars to meet global demand. The new facility allows central banks and international monetary authorities to Congressional Research Service 36 Global Economic Effects of COVID-19 exchange their U.S. Treasury securities held with the Federal Reserve for U.S. dollars, which can then be made available to institutions in their jurisdictions.161 Emergency Credit Facilities for the Nonbank Financial System In 2008, the Fed created a series of emergency credit facilities to support liquidity in the nonbank financial system. This extended the Fed’s traditional role as lender of last resort from the banking system to the overall financial system for the first time since the Great Depression. To create these facilities, the Fed relied on its emergency lending authority (Section 13(3) of the Federal Reserve Act). To date, the Fed has created six facilities—some new, and some reviving 2008 facilities—in response to COVID-19. facilities—in response to COVID-19.
 On March 17, the Fed revived the commercial paper funding facility to purchase  On March 17, the Fed revived the commercial paper funding facility to purchase
commercial paper, which is an important source of short-term funding for commercial paper, which is an important source of short-term funding for
financial firms, nonfinancial firms, and asset-backed securities (ABS). financial firms, nonfinancial firms, and asset-backed securities (ABS).
 Like banks, primary dealers are heavily reliant on short-term lending markets in  Like banks, primary dealers are heavily reliant on short-term lending markets in
their role as securities market makers. Unlike banks, they cannot access the their role as securities market makers. Unlike banks, they cannot access the
discount window. On March 17, the Fed revived the primary dealer credit facility, discount window. On March 17, the Fed revived the primary dealer credit facility,
which is akin to a discount window for primary dealers. Like the discount which is akin to a discount window for primary dealers. Like the discount
window, it provides short-term, fully collateralized loans to primary dealers. window, it provides short-term, fully collateralized loans to primary dealers.
 On March 19, the Fed created the Money Market Mutual Fund Liquidity Facility  On March 19, the Fed created the Money Market Mutual Fund Liquidity Facility
(MMLF), similar to a facility created during the 2008 financial crisis. The (MMLF), similar to a facility created during the 2008 financial crisis. The
MMLF makes loans to financial institutions to purchase assets that money MMLF makes loans to financial institutions to purchase assets that money
market funds are market funds are ~~sel ing~~selling to meet redemptions. ~~to meet redemptions.~~

~~134 For additional information about swap lines, see CRS In Focus IF11489,~~ ~~Federal Executive Agencies: Selected Pay~~
~~Flexibilities for COVID-19 Response, by Barbara L. Schwemle.~~
~~Congressional Research Service~~

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 On March 23, the Fed created two facilities to support corporate bond markets—  On March 23, the Fed created two facilities to support corporate bond markets—
the Primary Market Corporate Credit Facility to purchase newly issued corporate the Primary Market Corporate Credit Facility to purchase newly issued corporate
debt and the Secondary Market Corporate Credit Facility to purchase existing debt and the Secondary Market Corporate Credit Facility to purchase existing
corporate debt on secondary markets. corporate debt on secondary markets.
 On March 23, the Fed revived the Term Asset-Backed Securities Loan Facility to  On March 23, the Fed revived the Term Asset-Backed Securities Loan Facility to
make nonrecourse loans to private investors to purchase ABS backed by various make nonrecourse loans to private investors to purchase ABS backed by various
nonmortgage consumer loans. nonmortgage consumer loans.
 On April  On April 6, the Fed announced the Payroll Protection Program Lending Facility 6, the Fed announced the Payroll Protection Program Lending Facility
(PPPLF) to provide credit to depository institutions (e.g., banks) making loans (PPPLF) to provide credit to depository institutions (e.g., banks) making loans
under the CARES Act (H.R. 748/P.L. 116-136) Payroll Protection Program. under the CARES Act (H.R. 748/P.L. 116-136) Payroll Protection Program.
Because banks are not required to hold capital against these loans, this facility Because banks are not required to hold capital against these loans, this facility
increases lending capacity for banks facing high demand to originate these loans. increases lending capacity for banks facing high demand to originate these loans.
The PPP provides low-cost loans to The PPP provides low-cost loans to ~~smal~~ small businesses to pay employees. These businesses to pay employees. These
loans do not pose credit risk to the Fed because they are guaranteed by the loans do not pose credit risk to the Fed because they are guaranteed by the ~~Smal~~
Small Business Administration. Business Administration.
 On April  On April 9, the Fed announced the Main Street Lending Program (MSLP), which 9, the Fed announced the Main Street Lending Program (MSLP), which
purchases loans from depository institutions to businesses with up to 10,000 purchases loans from depository institutions to businesses with up to 10,000
employees or up to $2.5 employees or up to $2.5 ~~bil ion~~ billion in revenues. The loans to businesses would defer in revenues. The loans to businesses would defer
principal and interest repayment for one year, and the businesses would have to principal and interest repayment for one year, and the businesses would have to
make a “reasonable effort” to retain employees. make a “reasonable effort” to retain employees.
 On April  On April 9, the Fed announced the Municipal Liquidity9, the Fed announced the Municipal Liquidity Facility (MLF) to Facility (MLF) to
purchase state and municipal debt in response to higher yields and reduced purchase state and municipal debt in response to higher yields and reduced
~~liquidity in that market. The facility wil~~ 161 For additional information about swap lines, see CRS In Focus IF11489, Federal Executive Agencies: Selected Pay Flexibilities for COVID-19 Response, by Barbara L. Schwemle. Congressional Research Service 37 Global Economic Effects of COVID-19 liquidity in that market. The facility will only purchase debt of larger counties only purchase debt of larger counties
and cities. and cities.
Many of these facilities are structured as special purpose vehicles controlled by the Fed because Many of these facilities are structured as special purpose vehicles controlled by the Fed because
of restrictions on the types of securities that the Fed can purchase. Although there were no losses of restrictions on the types of securities that the Fed can purchase. Although there were no losses
from these facilities during the financial crisis, assets of the Treasury’s Exchange Stabilization from these facilities during the financial crisis, assets of the Treasury’s Exchange Stabilization
Fund have been pledged to backstop any losses on several of the facilities today. Fund have been pledged to backstop any losses on several of the facilities today.
Fiscal Policy
In terms of a fiscal stimulus, Congress adopted H.R. 6074 on March 5, 2020 (P.L. 116-123), to In terms of a fiscal stimulus, Congress adopted H.R. 6074 on March 5, 2020 (P.L. 116-123), to
appropriate $8.3 appropriate $8.3 ~~bil ion~~ billion in emergency funding to support efforts to fight COVID-19; President in emergency funding to support efforts to fight COVID-19; President
Trump signed the measure on March 6, 2020. President Trump also signed on March 18, H.R. Trump signed the measure on March 6, 2020. President Trump also signed on March 18, H.R.
6201 (P.L. 116-127), the Families First COVID-19 Response Act, that provides paid sick leave 6201 (P.L. 116-127), the Families First COVID-19 Response Act, that provides paid sick leave
and free COVID-19 testing, expands food assistance and unemployment benefits, and requires and free COVID-19 testing, expands food assistance and unemployment benefits, and requires
employers to provide additionalemployers to provide additional protections for health care workers. Other countries have protections for health care workers. Other countries have
indicated they indicated they ~~wil~~ will also provide assistance to workers and to some businesses. Congress also is also provide assistance to workers and to some businesses. Congress also is
considering other possible measures, including contingency plans for agencies to implement considering other possible measures, including contingency plans for agencies to implement
offsite telework for employees, financial assistance to the shale oil industry, a reduction in the offsite telework for employees, financial assistance to the shale oil industry, a reduction in the
payroll tax,payroll tax,~~135~~162 and extended of the tax filing deadline. and extended of the tax filing deadline.~~136~~163 President Trump has taken additional President Trump has taken additional
~~actions, including:~~

~~135 Armus, T heo, “Federal, State Officials Attempt to Fight Virus T hrough Social Distancing, Stimulus Package,”~~
Washington Post, March 11, 2020. https://www.washingtonpost.com/world/2020/03/11/Covid-19-live-updates/.
~~136 Sevastopulo, Demetri, “US T reasury Considers T ax Filing Extension to Ease Virus Impact,” Financial Times,~~
~~March 11, 2020. https://www.ft.com/content/c65a6e40-639f-11ea-b3f3-fe4680ea68b5.~~
~~Congressional Research Service~~

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actions, including:  Announcing on March 11, 2020, restrictions on  Announcing on March 11, 2020, restrictions on al all travel from Europe to the travel from Europe to the
United States for 30 days, directing the United States for 30 days, directing the ~~Smal~~ Small Business Administration (SBA) to Business Administration (SBA) to
offer low-interest loans to offer low-interest loans to ~~smal~~ small businesses, and directing the Treasury businesses, and directing the Treasury
Department to defer tax payments penalty-free for affected businesses.Department to defer tax payments penalty-free for affected businesses.~~137~~
164  Declaring on March 13, a state of emergency that frees up disaster relief funding  Declaring on March 13, a state of emergency that frees up disaster relief funding
to assist state and local governments to address the effects of the pandemic. The to assist state and local governments to address the effects of the pandemic. The
President also announced additional testing for the virus, a website to help President also announced additional testing for the virus, a website to help
individualsindividuals identify symptoms, increased oil purchases for the Strategic Oil identify symptoms, increased oil purchases for the Strategic Oil
Reserve, and a waiver on interest payments on student loans.Reserve, and a waiver on interest payments on student loans.~~138~~
165  Invoking on March 18, 2020, the Defense Production Act (DPA) that gives him  Invoking on March 18, 2020, the Defense Production Act (DPA) that gives him
the authority to require some U.S. businesses to increase production of medical the authority to require some U.S. businesses to increase production of medical
equipment and supplies that are in short supply.equipment and supplies that are in short supply.~~139~~166
On March 25, 2020, the Senate adopted the COVID-19 Aid, Relief, and Economic Security Act On March 25, 2020, the Senate adopted the COVID-19 Aid, Relief, and Economic Security Act
(S. 3548) to (S. 3548) to ~~formal y~~formally implement President Trump’s proposal by providing direct payments to implement President Trump’s proposal by providing direct payments to
taxpayers, loans and guarantees to airlines and other industries, and assistance for taxpayers, loans and guarantees to airlines and other industries, and assistance for ~~smal~~
~~businesses, actions similar to those of various foreign governments. The House adopted the~~
~~measure as H.R. 748 on March 27, and President Trump signed the measure (P.L. 116-136) on~~
~~March 27. The law:~~
~~ Provides funding for $1,200 tax rebates to individuals, with additional~~
~~$500 payments per qualifying child. The rebate begins phasing out when incomes~~
~~exceed $75,000 (or $150,000 for joint filers).~~
~~ Assists smal businesses by providing funding for, forgivable bridge loans; and~~
~~additional funding for grants and technical assistance; authorizes emergency~~
~~loans to distressed businesses, including air carriers, and suspends certain~~
~~aviation excise taxes.~~
~~ Creates a $367 bil ion loan program for smal businesses, establishes a $500~~
~~bil ion lending fund for industries, cities and states, a $150 bil ion for state and~~
~~local stimulus funds, and $130 bil ion for hospitals.~~
~~ Increases unemployment insurance benefits, expands eligibility and offer workers~~
~~an additional $600 a week for four month, in addition to state unemployment~~
~~programs.140~~
~~ Establishes special rules for certain tax-favored withdrawals from retirement~~
~~plans; delays due dates for employer payroll taxes and estimated tax~~

~~137 McAuley, James, and Michael Birnbaum, “Europe Blindsided by T rump’s T ravel~~small 162 Armus, Theo, “Federal, State Officials Attempt to Fight Virus Through Social Distancing, Stimulus Package,” Washington Post, March 11, 2020. https://www.washingtonpost.com/world/2020/03/11/Covid-19-live-updates/. 163 Sevastopulo, Demetri, “US Treasury Considers Tax Filing Extension to Ease Virus Impact,” Financial Times, March 11, 2020. https://www.ft.com/content/c65a6e40-639f-11ea-b3f3-fe4680ea68b5. 164 McAuley, James, and Michael Birnbaum, “Europe Blindsided by Trump’s Travel Restrictions, with Many Seeing Restrictions, with Many Seeing
Political Motive,” Political Motive,” Washington Post, March 12, 2020. https://www.washingtonpost.com/world/europe/europe-, March 12, 2020. https://www.washingtonpost.com/world/europe/europe-
blindsided-by-trumps-travel-restrictions-with-many-seeing-political-motive/2020/03/12/42a279d0-6412-11ea-8a8e-blindsided-by-trumps-travel-restrictions-with-many-seeing-political-motive/2020/03/12/42a279d0-6412-11ea-8a8e-
5c5336b32760_story.html. 5c5336b32760_story.html.
~~138~~ 165 Fritz, Angela and Meryl Kornfield, “President Fritz, Angela and Meryl Kornfield, “President ~~T rump~~Trump Declares a National Emergency, Freeing $50 Billion in Declares a National Emergency, Freeing $50 Billion in
Funding,”Funding,” Washington Post, March 13, 2020. https://www.washingtonpost.com/world/2020/03/13/Covid-19-latest-, March 13, 2020. https://www.washingtonpost.com/world/2020/03/13/Covid-19-latest-
news/. news/.
~~139~~166 Hellmann, Jessie, Hellmann, Jessie, ~~“T rump~~ “Trump Invokes Defense Production Act as Covid-19 Response,” Invokes Defense Production Act as Covid-19 Response,” The Hill, March 18, 2020. , March 18, 2020.
https://thehill.com/policy/healthcare/488226-trump-invokes-defense-production-act-as-Covid-19-response. https://thehill.com/policy/healthcare/488226-trump-invokes-defense-production-act-as-Covid-19-response.
~~140 For additional information about unemployment and sick leave provisions, see CRS Insight IN11249,~~ ~~H.R. 6201:~~
~~Paid Leave and Unem ploym ent Insurance Responses to COVID-19, by Sarah A. Donovan, Katelin P. Isaacs, and Julie~~
~~M. Whittaker, and CRS In Focus IF11487, The Fam ilies First Coronavirus Response Act Leave Provisions, by Sarah~~
~~A. Donovan and Jon O. Shimabukuro.~~
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~~Global Economic Effects of COVID-19~~

Congressional Research Service 38 Global Economic Effects of COVID-19 businesses, actions similar to those of various foreign governments. The House adopted the measure as H.R. 748 on March 27, and President Trump signed the measure (P.L. 116-136) on March 27. The law:  Provides funding for $1,200 tax rebates to individuals, with additional $500 payments per qualifying child. The rebate begins phasing out when incomes exceed $75,000 (or $150,000 for joint filers).  Assists small businesses by providing funding for, forgivable bridge loans; and additional funding for grants and technical assistance; authorizes emergency loans to distressed businesses, including air carriers, and suspends certain aviation excise taxes.  Creates a $367 billion loan program for small businesses, establishes a $500 billion lending fund for industries, cities and states, a $150 billion for state and local stimulus funds, and $130 billion for hospitals.  Increases unemployment insurance benefits, expands eligibility and offer workers an additional $600 a week for four month, in addition to state unemployment programs.167  Establishes special rules for certain tax-favored withdrawals from retirement plans; delays due dates for employer payroll taxes and estimated tax payments for corporations; and revises other provisions, including those related payments for corporations; and revises other provisions, including those related
to losses, charitable deductions, and business interest. to losses, charitable deductions, and business interest.
 Provides additional funding for the prevention, diagnosis, and treatment of  Provides additional funding for the prevention, diagnosis, and treatment of
COVID-19; limits liability COVID-19; limits liability for volunteer health care professionals; prioritizes for volunteer health care professionals; prioritizes
Food and Drug Administration (FDA) review of certain drugs; Food and Drug Administration (FDA) review of certain drugs; ~~al ow s~~allows emergency emergency
use of certain diagnostic tests that are not approved by the FDA; expands health-use of certain diagnostic tests that are not approved by the FDA; expands health-
insurance coverage for diagnostic testing and requires coverage for preventative insurance coverage for diagnostic testing and requires coverage for preventative
services and vaccines; and revises other provisions, including those regarding the services and vaccines; and revises other provisions, including those regarding the
medical supply chain, the national stockpile, the health care workforce, the medical supply chain, the national stockpile, the health care workforce, the
Healthy Start program, telehealth services, nutrition services, Medicare, and Healthy Start program, telehealth services, nutrition services, Medicare, and
Medicaid. Medicaid.
 Temporarily suspends payments for federal student loans and revises provisions  Temporarily suspends payments for federal student loans and revises provisions
related to campus-based aid, supplemental educational-opportunity grants, related to campus-based aid, supplemental educational-opportunity grants,
federal work-study, subsidized loans, federal work-study, subsidized loans, ~~Pel~~ Pell grants, and foreign institutions. grants, and foreign institutions.
 Authorizes the Department of the Treasury temporarily to guarantee money-  Authorizes the Department of the Treasury temporarily to guarantee money-
market funds. market funds.
On April On April 23, 2020, the House passed H.R. 266 (P.L. 116-139), the Paycheck Protection Program 23, 2020, the House passed H.R. 266 (P.L. 116-139), the Paycheck Protection Program
and Health Care Enhancement Act, following similar actions by the Senate the previous day. The and Health Care Enhancement Act, following similar actions by the Senate the previous day. The
measure provides $484 measure provides $484 ~~bil ion for smal~~ billion for small business loans, health care providers, and COVID-19 business loans, health care providers, and COVID-19
testing. In particular, the law: testing. In particular, the law:
 Provides additional lending authority for certain  Provides additional lending authority for certain ~~Smal~~ Small Business Administration Business Administration
(SBA) programs in response to COVID-19 increases the authority for (1) the (SBA) programs in response to COVID-19 increases the authority for (1) the
Paycheck Protection Program, under which the SBA may guarantee certain loans Paycheck Protection Program, under which the SBA may guarantee certain loans
~~to smal~~ to small businesses during the COVID-19 pandemic; and (2) advances on 167 For additional information about unemployment and sick leave provisions, see CRS Insight IN11249, H.R. 6201: Paid Leave and Unemployment Insurance Responses to COVID-19, by Sarah A. Donovan, Katelin P. Isaacs, and Julie M. Whittaker, and CRS In Focus IF11487, The Families First Coronavirus Response Act Leave Provisions, by Sarah A. Donovan and Jon O. Shimabukuro. Congressional Research Service 39 Global Economic Effects of COVID-19 ~~businesses during the COVID-19 pandemic; and (2) advances on~~
emergency economic injury disaster loans made in response to COVID-19. The emergency economic injury disaster loans made in response to COVID-19. The
division also expands eligibilitydivision also expands eligibility for such disaster loans and advances to include for such disaster loans and advances to include
agricultural enterprises. agricultural enterprises.
 Provides $100  Provides $100 ~~bil ion~~ billion in FY2020 supplemental appropriations to HHS for the in FY2020 supplemental appropriations to HHS for the
Public Health and Social Services Emergency Fund, including $75 Public Health and Social Services Emergency Fund, including $75 ~~bil ion~~ billion to to
reimburse health care providers for health care related expenses or lost revenues reimburse health care providers for health care related expenses or lost revenues
that are attributable to the coronavirus outbreak; and $25 that are attributable to the coronavirus outbreak; and $25 ~~bil ion~~billion for expenses to for expenses to
research, develop, validate, manufacture, purchase, administer, and expand research, develop, validate, manufacture, purchase, administer, and expand
capacity for COVID-19 tests to effectively monitor and suppress COVID-19. capacity for COVID-19 tests to effectively monitor and suppress COVID-19.
  ~~Al ocates~~Allocates specified portions of the $25 specified portions of the $25 ~~bil ion~~ billion for COVID-19 testing to states, for COVID-19 testing to states,
localities, territories, and tribes; the Centers for Diseases Control and Prevention; localities, territories, and tribes; the Centers for Diseases Control and Prevention;
the National Institutes of Health; the Biomedical Advanced Research and the National Institutes of Health; the Biomedical Advanced Research and
Development Authority; the Food and Drug Administration; community health Development Authority; the Food and Drug Administration; community health
centers; rural health clinics; and testing for the uninsured. centers; rural health clinics; and testing for the uninsured.
On May 12, House Democrats introduced H.R. 6800, the Heroes Act, to provide a $3 On May 12, House Democrats introduced H.R. 6800, the Heroes Act, to provide a $3 ~~tril ion~~trillion
supplemental spending supplemental spending ~~bil~~ bill for additional financial resources to state and local governments. The for additional financial resources to state and local governments. The
measure passed the House on May 15 and was sent to the Senate for consideration. Among other measure passed the House on May 15 and was sent to the Senate for consideration. Among other
provisions, the provisions, the ~~bil~~ bill would: would:
 Appropriate $200  Appropriate $200 ~~bil ion~~ billion in hazard pay to essential workers. in hazard pay to essential workers.
 Extend additional Extend additional payments to individuals, for nutrition and housing assistance, payments to individuals, for nutrition and housing assistance,
and provide funding for additional testing and contact tracing. and provide funding for additional testing and contact tracing.
 Restore the tax deduction for state and local taxes.  Restore the tax deduction for state and local taxes.
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~~Global Economic Effects of COVID-19~~

 Provide FY2020 emergency supplemental appropriations to federal agencies.  Provide FY2020 emergency supplemental appropriations to federal agencies.
 Provide payments and other assistance to state, local, tribal, and territorial  Provide payments and other assistance to state, local, tribal, and territorial
governments. governments.
 Provide additional  Provide additional direct payments of up to $1,200 per individual. direct payments of up to $1,200 per individual.
 Expand paid sick days, family and medical leave, unemployment compensation,  Expand paid sick days, family and medical leave, unemployment compensation,
nutrition and food assistance programs, housing assistance, and payments to nutrition and food assistance programs, housing assistance, and payments to
farmers. farmers.
 Modify and expand the Paycheck Protection Program, which provides loans and  Modify and expand the Paycheck Protection Program, which provides loans and
grants to grants to ~~smal~~ small businesses and nonprofit organizations.businesses and nonprofit organizations.
 Expand several tax credits and deductions.  Expand several tax credits and deductions.
 Provide funding and establish requirements for COVID-19 testing and contact  Provide funding and establish requirements for COVID-19 testing and contact
tracing. tracing.
 Eliminate  Eliminate cost-sharing for COVID-19 treatments; cost-sharing for COVID-19 treatments;
 Extend and expand the moratorium on certain evictions and foreclosures; and  Extend and expand the moratorium on certain evictions and foreclosures; and
 Require employers to develop and implement infectious disease exposure control  Require employers to develop and implement infectious disease exposure control
plans. plans.
On May 27, the Federal Reserve released its “Beige On May 27, the Federal Reserve released its “Beige Book”- a mostly qualitativeBook”- a mostly qualitative assessment of assessment of
the U.S. economy produced eight times a year by the 12 regional Federal Reserve banks – that the U.S. economy produced eight times a year by the 12 regional Federal Reserve banks – that
provides an assessment of economic activity across the various regions of the country. The provides an assessment of economic activity across the various regions of the country. The
assessment indicated that economic activity to mid-May had assessment indicated that economic activity to mid-May had ~~fal en~~fallen sharply in each of the sharply in each of the
Congressional Research Service 40 Global Economic Effects of COVID-19 districts.168~~districts.141~~ The Bureau of Economic Analysis (BEA) reported on May 29 that U.S. personal The Bureau of Economic Analysis (BEA) reported on May 29 that U.S. personal
income rose by 10.5% in April, primarily reflecting an 88% increase in government payments to income rose by 10.5% in April, primarily reflecting an 88% increase in government payments to
~~individuals~~ individuals from federal economic recovery programs, as indicated in from federal economic recovery programs, as indicated in Figure 89. During the same . During the same
period, personal consumption period, personal consumption ~~fel~~ fell by more than 13% as consumers curtailed spending. The lower by more than 13% as consumers curtailed spending. The lower
level of spending combined with income transfers, which households apparently deposited into level of spending combined with income transfers, which households apparently deposited into
saving accounts, raising the personal savings rate to 33% in Aprilsaving accounts, raising the personal savings rate to 33% in April at an annual rate, compared to at an annual rate, compared to
an annual rate of 8.2% in February. During May, the price of Brent crude oil increased by 33.5%, an annual rate of 8.2% in February. During May, the price of Brent crude oil increased by 33.5%,
rising from $26.44 per barrel to $35.31 per barrel. rising from $26.44 per barrel to $35.31 per barrel.

~~141 The Beige Book: Summ ary of Commentary on Current Economic Conditions by Federal Reserve District, May 17,~~
~~2020, the Federal Reserve System.~~
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35

Figure 9. U.S. Personal Income, Consumption, and Saving At annual rate Source: Personal Income and Outlays, April 2020, Bureau of Economic Analysis, May 29, 2020. On June 1, the Congressional Budget Office (CBO) issued a revised estimate of the effects of the pandemic on the U.S. economy. In the revised forecast, U.S. GDP in the second quarter of 2002 was estimated to have declined by 14.2% compared with their January 2020 forecast. The CBO also estimated that over the 2020-2030 period, cumulative real output could be 3.0% lower than the cumulative amount estimated in January 2020.169 168 The Beige Book: Summary of Commentary on Current Economic Conditions by Federal Reserve District, May 17, 2020, the Federal Reserve System. 169 Congressional Budget Office, Letter to Charles A. Schumer, June 1, 2020. Congressional Research Service 41 Global Economic Effects of COVID-19 On June 19, the Federal Open Market Committee released a statement indicating that the pandemic “poses considerable risks to the economic outlook over the medium term.170” Similarly, in testimony before the Senate Banking Committee on June 17, Federal Reserve Chairman Powell stressed that although there were positive signs that U.S. economic growth was beginning to rebound, there was “significant uncertainty” about the timing and strength of the recovery.171 He indicated that the source of the uncertainty was the path of the virus and the effectiveness of the measures used to contain the disease. The accompanying Monetary Policy Report indicated the pandemic was posing acute risks to small businesses as a result of insolvencies and that real economic growth in the second quarter of 2020 would decline at a rapid pace.172

~~Global Economic Effects of COVID-19~~

~~Figure 8. U.S. Personal Income, Consumption, and Saving~~
~~At annual rate~~

Source: Personal Income and Outlays, April 2020, Bureau of Economic Analysis, May 29, 2020.

For additional information about the impact of COVID-19 on the U.S. economy see CRS Insight For additional information about the impact of COVID-19 on the U.S. economy see CRS Insight
IN11235, IN11235, COVID-19: Potential Economic Effects..~~142~~
173 Europe
To date, European countries have not displayed a synchronized policy response similar to the one To date, European countries have not displayed a synchronized policy response similar to the one
they developed during the 2008-2009 global financial crisis. Instead, they have used a they developed during the 2008-2009 global financial crisis. Instead, they have used a
combination of nationalcombination of national fiscal policies and bond buying by the ECBfiscal policies and bond buying by the ECB to address the economic to address the economic
impact of the pandemic. Individual countries have adopted quarantines and required business impact of the pandemic. Individual countries have adopted quarantines and required business
closures, travel and border restrictions, tax holidays for businesses, extensions of certain closures, travel and border restrictions, tax holidays for businesses, extensions of certain
payments and loan guarantees, and subsidies for workers and businesses. The European payments and loan guarantees, and subsidies for workers and businesses. The European
Commission has advocated for greater coordination among the EU members in developing and Commission has advocated for greater coordination among the EU members in developing and
implementing monetary and fiscal policies to address the economic implementing monetary and fiscal policies to address the economic ~~fal out~~fallout from the viral from the viral
pandemic. Various EU and ECB officials are attempting to negotiate a coordinated fiscal response pandemic. Various EU and ECB officials are attempting to negotiate a coordinated fiscal response
~~by the Eurozone and broader EU.~~

~~142 CRS Insight IN11235, COVID-19: Potential Economic Effects, by Marc Labonte.~~
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by the Eurozone and broader EU. In its May 2020 economic forecast, the European Commission forecasted that EU GDP in 2020 In its May 2020 economic forecast, the European Commission forecasted that EU GDP in 2020
would would ~~fal~~ fall by 7.4% and the unemployment rate would rise to 9.0%, as indicated in by 7.4% and the unemployment rate would rise to 9.0%, as indicated in Table 3. The . The
Commission stated that, “Given the severity of this unprecedented worldwide shock, it is now Commission stated that, “Given the severity of this unprecedented worldwide shock, it is now
quite clear that the EU has entered the deepest economic recession in its history.” In addition, the quite clear that the EU has entered the deepest economic recession in its history.” In addition, the
Commission forecasted that EU GDP would rise rapidly in 2021, although not fast enough to Commission forecasted that EU GDP would rise rapidly in 2021, although not fast enough to
erase erase al all the 2020 decline, but would exhibit a distinct “V” shaped recession and recovery. the 2020 decline, but would exhibit a distinct “V” shaped recession and recovery.
Greece, Spain, France, and Italy are forecasted to experience the largest declines in GDP in 2020 Greece, Spain, France, and Italy are forecasted to experience the largest declines in GDP in 2020
as a result of their dependence on tourism, which is expected to experience a slow economic as a result of their dependence on tourism, which is expected to experience a slow economic
recovery. Germany and other Northern European countries are projected to experience a more recovery. Germany and other Northern European countries are projected to experience a more
modest decline in economic activity. Some analysts argue that this disparity in economic effects modest decline in economic activity. Some analysts argue that this disparity in economic effects
may complicate efforts to coordinate economic policies.may complicate efforts to coordinate economic policies.~~143~~174 To address the crisis, the Commission To address the crisis, the Commission
argued that, “[t]he risk….is that the crisis argued that, “[t]he risk….is that the crisis ~~wil~~ will lead to severe distortions within the Single Market 170 Federal Reserve Issues FOMC Statement, Board of Governors of the Federal Reserve System, June 10, 2020. https://www.federalreserve.gov/newsevents/pressreleases/monetary20200610a.htm. 171 Powell, Semiannual Monetary Report to the Congress. 172 Board of Governors of the Federal Reserve System, Monetary Policy Report, June 12, 2020, p. 1. https://www.federalreserve.gov/monetarypolicy/mpr_default.htm. 173 CRS Insight IN11235, COVID-19: Potential Economic Effects, by Marc Labonte. 174 Birnbaum, Michael, European Union Says That Pandemic Recession Will be Worst in its History, The Washington Post, May 6, 2020. https://www.washingtonpost.com/world/european-union-says-pandemic-recession-will-be-worst-in-its-history/2020/05/06/e787a70e-8f96-11ea-9322-a29e75effc93_story.html. Congressional Research Service 42 Global Economic Effects of COVID-19 ~~lead to severe distortions within the Single Market~~
and to entrenched economic, financial and social divergences between euro area Member States and to entrenched economic, financial and social divergences between euro area Member States
that could ultimately threaten the stability of the Economic and Monetary Union.”that could ultimately threaten the stability of the Economic and Monetary Union.”~~144~~175
Table 3. European Commission Economic Forecast May 2020
(percent change) (percent change)
Real GDP
Unemployment rate

2019 2019
2020 2020
2021 2021
2019 2019
2020 2020
2021 2021

EU EU
1.5 1.5
-7.4 -7.4
6.1 6.1
6.7 6.7
9.0 9.0
7.9 7.9
Euro area Euro area
1.2 1.2
-7.7 -7.7
6.3 6.3
7.5 7.5
9.6 9.6
8.6 8.6
Belgium Belgium
1.4 1.4
-7.2 -7.2
6.7 6.7
5.4 5.4
7.0 7.0
6.6 6.6
Germany Germany
0.6 0.6
-6.5 -6.5
5.9 5.9
3.2 3.2
4.0 4.0
3.5 3.5
Ireland Ireland
5.5 5.5
-7.9 -7.9
6.1 6.1
5.0 5.0
7.4 7.4
7.0 7.0
Greece Greece
1.9 1.9
-9.7 -9.7
7.9 7.9
17.3 17.3
19.9 19.9
16.8 16.8
Spain Spain
2.0 2.0
-9.4 -9.4
7.0 7.0
14.1 14.1
18.9 18.9
17.0 17.0
France France
1.3 1.3
-8.2 -8.2
7.4 7.4
8.5 8.5
10.1 10.1
9.7 9.7
Italy Italy
0.3 0.3
-9.5 -9.5
6.5 6.5
10.0 10.0
11.8 11.8
10.7 10.7
Luxembourg Luxembourg
2.3 2.3
-5.4 -5.4
5.7 5.7
5.6 5.6
6.4 6.4
6.1 6.1
Malta Malta
4.4 4.4
-5.8 -5.8
6.0 6.0
3.4 3.4
5.9 5.9
4.4 4.4
Netherlands Netherlands
1.8 1.8
-6.8 -6.8
5.0 5.0
3.4 3.4
5.9 5.9
5.3 5.3
Austria Austria
1.6 1.6
-5.5 -5.5
5.0 5.0
4.5 4.5
5.8 5.8
4.9 4.9
Portugal Portugal
2.2 2.2
-6.8 -6.8
5.8 5.8
6.5 6.5
9.7 9.7
7.4 7.4
Finland Finland
1.0 1.0
-6.3 -6.3
3.7 3.7
6.7 6.7
8.3 8.3
7.7 7.7
Denmark Denmark
2.4 2.4
-5.9 -5.9
5.1 5.1
5.0 5.0
6.4 6.4
5.7 5.7
Sweden Sweden
1.2 1.2
-6.1 -6.1
4.3 4.3
6.8 6.8
9.7 9.7
9.3 9.3
United Kingdom United Kingdom
1.4 1.4
-8.3 -8.3
6.0 6.0
3.8 3.8
6.7 6.7
6.0 6.0

~~143 Birnbaum, Michael, European Union Says T hat Pandemic Recession Will be Worst in its History,~~ ~~The Washington~~
~~Post,~~ ~~May 6, 2020. https://www.washingtonpost.com/world/european -union-says-pandemic-recession-will-be-worst -in-~~
~~its-history/2020/05/06/e787a70e-8f96-11ea-9322-a29e75effc93_story.html.~~
~~144 European Economic Forecast spring 2020, European Commission, May 5, 2020.~~
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~~Source:~~ ~~European Economic Forecast~~ Source: European Economic Forecast Spring 2020, European Commission,Spring 2020, European Commission, May 6. 2020, May 6. 2020,
Pandemic-related economic effects reportedly are having a significant impact on business activity Pandemic-related economic effects reportedly are having a significant impact on business activity
in Europe, with some indexes in Europe, with some indexes ~~fal ing~~falling farther then they had during the height of the financial crisis farther then they had during the height of the financial crisis
and others indicating that Europe may and others indicating that Europe may ~~wel~~ well experience a deep economic recession in 2020.experience a deep economic recession in 2020.~~145~~
176 France, Germany, Italy, Spain, and the UK reported steep drops in industrial activity in March France, Germany, Italy, Spain, and the UK reported steep drops in industrial activity in March
2020. EU countries have issued travel warnings, banning 2020. EU countries have issued travel warnings, banning al all but essential travel across borders, but essential travel across borders,
raising concerns that even much-needed medical supplies could raising concerns that even much-needed medical supplies could ~~stal~~ stall at borders affected by traffic at borders affected by traffic
backups.backups.~~146~~177 The travel bans and border closures reportedly are causing shortages of farm laborers The travel bans and border closures reportedly are causing shortages of farm laborers
175 European Economic Forecast spring 2020, European Commission, May 5, 2020. 176 Arnold, Martin and Valentina Romei, “Business Activity Crashes to Record Low in Eurozone,” Financial Times, March 24, 2020. https://www.ft.com/content/f5ebabd4-6dad-11ea-89df-41bea055720b. 177 Birnbaum, Michael, “Europe Is Closing Borders amid Covid-19 Outbreak. They May be Hard to Reopen,” Washington Post, March 17, 2020. https://www.washingtonpost.com/world/europe/europe-closing-borders-Covid-19/2020/03/17/131a6f56-67c8-11ea-b199-3a9799c54512_story.html. Congressional Research Service 43 Global Economic Effects of COVID-19 in Germany, the UK, and Spain, which has caused growers to attempt to recruit students and in Germany, the UK, and Spain, which has caused growers to attempt to recruit students and
workers laid off because of the pandemic.workers laid off because of the pandemic.~~147~~178
In previous actions, the European Commission had announced that it was relaxing rules on In previous actions, the European Commission had announced that it was relaxing rules on
government debt to government debt to ~~al ow~~allow countries more flexibility countries more flexibility in using fiscal policies. Also, the European in using fiscal policies. Also, the European
Central Bank (ECB) announced that it was ready to take “appropriate and targeted measures,” if Central Bank (ECB) announced that it was ready to take “appropriate and targeted measures,” if
needed. France, Italy, Spain and six other Eurozone countries have argued for creating a needed. France, Italy, Spain and six other Eurozone countries have argued for creating a
“coronabond,” a joint common European debt instrument. Similar attempts to create a common “coronabond,” a joint common European debt instrument. Similar attempts to create a common
Eurozone-wide debt instrument have been opposed by Germany and the Netherland, among other Eurozone-wide debt instrument have been opposed by Germany and the Netherland, among other
Eurozone members.Eurozone members.~~148~~179 With interest rates already low, however, it indicated that it would expand With interest rates already low, however, it indicated that it would expand
its program of providing loans to EU banks, or buying debt from EU firms, and possibly lowering its program of providing loans to EU banks, or buying debt from EU firms, and possibly lowering
its deposit rate further into negative territory in an attempt to shore up the Euro’s exchange its deposit rate further into negative territory in an attempt to shore up the Euro’s exchange
rate.rate.~~149~~180 ECB President-designate Christine Lagarde ECB President-designate Christine Lagarde ~~cal ed~~called on EU leaders to take more urgent on EU leaders to take more urgent
action to avoid the spread of COVID-19 from triggering a serious economic slowdown. The action to avoid the spread of COVID-19 from triggering a serious economic slowdown. The
European Commission indicated that it was creating a $30 European Commission indicated that it was creating a $30 ~~bil ion~~ billion investment fund to address investment fund to address
COVID-19 issues.COVID-19 issues.~~150~~181 In other actions: In other actions:
 On March 12, 2020, the ECB decided to: (1) expand its longer-term refinance  On March 12, 2020, the ECB decided to: (1) expand its longer-term refinance
operations (LTRO) to provide low-cost loans to Eurozone banks to increase bank operations (LTRO) to provide low-cost loans to Eurozone banks to increase bank
liquidity;liquidity; (2) extend targeted longer-term refinance operations (TLTRO) to (2) extend targeted longer-term refinance operations (TLTRO) to
provide loans at below-market rates to businesses, provide loans at below-market rates to businesses, ~~especial y smal~~ especially small and medium-and medium-
sized businesses, directly affected by COVID-19; (3) provide an additional €120 sized businesses, directly affected by COVID-19; (3) provide an additional €120
~~bil ion~~ billion (about $130 (about $130 ~~bil ion)~~ billion) for the Bank’s asset purchase program to provide for the Bank’s asset purchase program to provide
liquidityliquidity to firms that was in addition to €20 to firms that was in addition to €20 ~~bil ion~~ billion a month it previously had a month it previously had
committed to purchasing.committed to purchasing.~~151~~

~~145 Arnold, Martin and Valentina Romei, “Business Activity Crashes to Record Low in Eurozone,” Financial Times,~~
~~March 24, 2020. https://www.ft.com/content/f5ebabd4-6dad-11ea-89df-41bea055720b.~~
~~146 Birnbaum, Michael, “ Europe Is Closing Borders amid Covid-19 Outbreak. T hey May be Hard to Reopen,”~~
Washington Post, March 17, 2020. https://www.washingtonpost.com/world/europe/europe-closing-borders-Covid-19/
~~2020/03/17/131a6f56-67c8-11ea-b199-3a9799c54512_story.html.~~
~~147 Evans, Judith Evans, Emiko T erazono, and Leila Abboud, “Farmers Warn over Food Supply with Harvest Workers~~
Shut Out,” Financial Tim es182  On March 13, 2020, financial market regulators in the UK, Italy, and Spain intervened in stock and bond markets to stabilize prices after historic swings in indexes on March 12, 2020.183 In addition, the ECB announced that it would do more to assist financial markets in distress, including altering self-imposed rules on purchases of sovereign debt.184  Germany’s Economic Minister announced on March 13, 2020, that Germany would provide unlimited loans to businesses experiencing negative economic 178 Evans, Judith Evans, Emiko Terazono, and Leila Abboud, “Farmers Warn over Food Supply with Harvest Workers Shut Out,” Financial Times, March 27, 2020. https://www.ft.com/content/e27a9395-db47-4e7b-b054-3ec6ba4cbba3. , March 27, 2020. https://www.ft.com/content/e27a9395-db47-4e7b-b054-3ec6ba4cbba3.
~~148~~179 Dombey, Daniel Dombey, Guy Dombey, Daniel Dombey, Guy Chazan, and Jim Brunsden,Chazan, and Jim Brunsden, “Nine Eurozone Countries Issue“Nine Eurozone Countries Issue Call for Call for
‘Coronabonds,’” ‘Coronabonds,’” Financial Times, March 26, 2020. https://www.ft.com/content/258308f6-6e94-11ea-89df- March 26, 2020. https://www.ft.com/content/258308f6-6e94-11ea-89df-
41bea055720b. 41bea055720b.
~~149~~ 180 “US Fed’s “US Fed’s Covid-19 Rate Cut Is First Move in a Dance with Markets,” Covid-19 Rate Cut Is First Move in a Dance with Markets,” Financial Times, March 4, 2020. , March 4, 2020.
https://www.ft.com/content/83c07594-5e3a-11ea-b0ab-339c2307bcd4. Giles, Chris, Martin Arnold, Samhttps://www.ft.com/content/83c07594-5e3a-11ea-b0ab-339c2307bcd4. Giles, Chris, Martin Arnold, Sam Jones, and Jones, and
Jamie Smyth,Jamie Smyth, “Finance Ministers ‘ReadyFinance Ministers ‘Ready ~~to T ake~~ to Take Action’ on Covid-19,” Action’ on Covid-19,” Financial ~~Tim es~~Times, March 3, 2020. , March 3, 2020.
https://www.ft.com/content/b86f7d92-5d38-11ea-b0ab-339c2307bcd4. https://www.ft.com/content/b86f7d92-5d38-11ea-b0ab-339c2307bcd4.
~~150~~181 Arnold, Martin and Guy Arnold, Martin and Guy Chazan, “Christine Lagarde CallsChazan, “Christine Lagarde Calls on EU Leaders to Ramp up Covid-19 Response,” on EU Leaders to Ramp up Covid-19 Response,”
Financial ~~Tim es~~Times, March 11, 2020. https://www.ft.com/content/44eac1f2-6386-11ea-a6cd-df28cc3c6a68. , March 11, 2020. https://www.ft.com/content/44eac1f2-6386-11ea-a6cd-df28cc3c6a68.
~~151~~ 182 Monetary Policy Decisions, , ~~T he~~The European Central Bank, March 12, 2020. https://www.ecb.europa.eu/press/pr/date/ European Central Bank, March 12, 2020. https://www.ecb.europa.eu/press/pr/date/
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~~ On March 13, 2020, financial market regulators in the UK, Italy, and Spain~~
~~intervened in stock and bond markets to stabilize prices after historic swings in~~
~~indexes on March 12, 2020.152 In addition, the ECB announced that it would do~~
~~more to assist financial markets in distress, including altering self-imposed rules~~
~~on purchases of sovereign debt.153~~
~~ Germany’s Economic Minister announced on March 13, 2020, that Germany~~
~~would provide unlimited loans to businesses experiencing negative economic~~
~~activity (initial y providing $555 bil ion), tax breaks for businesses,154 and export~~
~~credits and guarantees.155~~
~~ On March 18, the ECB indicated that it would: create a €750 bil ion (about $800~~
~~bil ion)~~ 2020/html/ecb.mp200312~8d3aec3ff2.en.htm. 183 Stafford, Philip and Adam Samson, “European Regulators Intervene in Bid to Stabilize Stock and Bond Prices,” Financial Times, March 13, 2020. https://www.ft.com/content/77f57d4c-6509-11ea-a6cd-df28cc3c6a68. 184 Arnold, Martin, “ECB Enters Damage-Limitation Mode with Pledge of More Action,” Financial Times, March 13, 2020. https://www.ft.com/content/f1cbd4f8-650f-11ea-b3f3-fe4680ea68b5. Congressional Research Service 44 Global Economic Effects of COVID-19 activity (initially providing $555 billion), tax breaks for businesses,185 and export credits and guarantees.186  On March 18, the ECB indicated that it would: create a €750 billion (about $800 billion) Pandemic Emergency Purchase Program to purchase public and private Pandemic Emergency Purchase Program to purchase public and private
securities; expand the securities it securities; expand the securities it ~~wil~~ will purchase to include nonfinancial purchase to include nonfinancial
commercial paper; and ease some collateral standards.commercial paper; and ease some collateral standards.~~156~~187 In announcing the In announcing the
program, President-designate Lagarde indicated that the ECB would, “do program, President-designate Lagarde indicated that the ECB would, “do
everything necessary.” In creating the program, the ECB removed or significantly everything necessary.” In creating the program, the ECB removed or significantly
loosened almost loosened almost al all constraints that applied to previous asset-purchase programs, constraints that applied to previous asset-purchase programs,
including a self-imposed limit of buying no more than one-third of any one including a self-imposed limit of buying no more than one-third of any one
country’s eligible bonds, a move that was expected to benefit Italy. country’s eligible bonds, a move that was expected to benefit Italy.
 The ECB also indicated that it would make available  The ECB also indicated that it would make available up to €3 up to €3 ~~tril ion~~ trillion in liquidity in liquidity
through refinancing operations. through refinancing operations.~~157~~188 Britain ($400 Britain ($400 ~~bil ion~~billion) and France ($50 ) and France ($50 ~~bil ion~~billion) )
also announced plans to increase spending to blunt the economic effects of the also announced plans to increase spending to blunt the economic effects of the
virus. Recent forecasts indicate that the economic effect of COVID-19 could virus. Recent forecasts indicate that the economic effect of COVID-19 could
push the Eurozone into an economic recession in 2020.push the Eurozone into an economic recession in 2020.~~158~~
189  On March 23, 2020, Germany announced that it would adopt a €750  On March 23, 2020, Germany announced that it would adopt a €750 ~~bil ion~~billion (over (over
$800 $800 ~~bil ion)~~ billion) package in economic stimulus funding. package in economic stimulus funding.
 On April  On April 15, Eurozone finance ministers announced a €500 15, Eurozone finance ministers announced a €500 ~~bil ion~~billion (about $550 (about $550
~~bil ion)~~ billion) emergency spending package to support governments, businesses, and emergency spending package to support governments, businesses, and
workers and workers and ~~wil~~ will provide funds to the European Stability Mechanism, the provide funds to the European Stability Mechanism, the
European Investment Bank, and for unemployment insurance.European Investment Bank, and for unemployment insurance.~~159~~

~~2020/html/ecb.mp200312~8d3aec3ff2.en.htm.~~
~~152 Stafford, Philip and Adam Samson, “European Regulators Intervene in Bid to Stabilize Stock and Bond Prices,”~~
Financial Tim es, March 13, 2020. https://www.ft.com/content/77f57d4c-6509-11ea-a6cd-df28cc3c6a68.
~~153 Arnold, Martin, “ECB Enters Damage-Limitation Mode with Pledge of More Action,” Financial Times, March 13,~~
~~2020. https://www.ft.com/content/f1cbd4f8-650f-11ea-b3f3-fe4680ea68b5.~~
~~154 Loveday, Morris and Louisa~~ 190 On May 5, 2020, Germany’s Constitutional Court issued a ruling challenging the legality of a bond-buying program conducted by the ECB since 2015, the Public Sector Purchase Program (PSPP). In its ruling, the court directed the German government to request clarification from the ECB about various aspects of the PSPP program that the court argued might exceed the ECB’s legal mandate. The German government has not yet indicated how it will formally respond to the ruling, but many analysts contend that the ruling—and the challenge to the authority of the ECB and the European Court of Justice—could have far-reaching implications for future ECB activities. This could potentially include challenges to the ECB’s Pandemic Emergency Purchase Program (PEPP) initiated in March. The PEPP is a temporary program that authorizes the ECB to acquire up to €750 billion (about $820 billion) in private and public sector securities to address the economic effects of the pandemic crisis. 185 Loveday, Morris and Louisa Beck, “Germany Announces ‘Bazooka’ Economic Plan to Mitigate Covid-19 Hit,” Beck, “Germany Announces ‘Bazooka’ Economic Plan to Mitigate Covid-19 Hit,”
Washington Post, March 13, 2020. https://www.washingtonpost.com/world/2020/03/13/Covid-19-latest-news/. , March 13, 2020. https://www.washingtonpost.com/world/2020/03/13/Covid-19-latest-news/.
~~155~~186 Arnold, Martin, Guy Arnold, Martin, Guy Chazan, Victor Mallet, Miles Johnson, and Daniel Dombey, “How European Economies Are Chazan, Victor Mallet, Miles Johnson, and Daniel Dombey, “How European Economies Are
~~T rying~~Trying to Mitigate the Covid-19 Shock,” to Mitigate the Covid-19 Shock,” Financial ~~Tim es~~Times, March 17, 2020. https://www.ft.com/content/26af5520- March 17, 2020. https://www.ft.com/content/26af5520-
6793-11ea-800d-da70cff6e4d3. 6793-11ea-800d-da70cff6e4d3.
~~156~~ 187 ECB Announces €759 Billion Pandemic Emergency Purchase Program , the European Central Bank, March 18, , the European Central Bank, March 18,
2020. https://www.ecb.europa.eu/press/pr/date/2020/html/ecb.pr200318_1~3949d6f266.en.html. 2020. https://www.ecb.europa.eu/press/pr/date/2020/html/ecb.pr200318_1~3949d6f266.en.html.
~~157~~188 Lagarde, Christine, “ Lagarde, Christine, “~~T he~~The ECB Will Do Everything Necessary to Counter the Virus,” ECB Will Do Everything Necessary to Counter the Virus,” Financial Times, March 20, , March 20,
2020. https://www.ft.com/content/281d600c-69f8-11ea-a6ac-9122541af204. 2020. https://www.ft.com/content/281d600c-69f8-11ea-a6ac-9122541af204.
~~158~~189 “Lagarde to Confront Covid-19 Crisis at ECB Policy Meeting,” “Lagarde to Confront Covid-19 Crisis at ECB Policy Meeting,” Financial Times, March 8, 2020. , March 8, 2020.
https://www.ft.com/content/79a280c6-5fb5-11ea-b0ab-339c2307bcd4. https://www.ft.com/content/79a280c6-5fb5-11ea-b0ab-339c2307bcd4.
~~159~~ 190 Fleming, Sam Fleming, Sam and Mehreen Khan, “Eurozone Countries Strike Emergency Deal on Coronavirus Rescue,”and Mehreen Khan, “Eurozone Countries Strike Emergency Deal on Coronavirus Rescue,” Financial
~~Tim es~~Times, April 9, 2020. https://www.ft.com/content/b984101a-42b8-40db-9a92-6786aec2ba5c. , April 9, 2020. https://www.ft.com/content/b984101a-42b8-40db-9a92-6786aec2ba5c.
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~~Global Economic Effects of COVID-19~~

~~On May 5, 2020, Germany’s Constitutional Court issued a ruling chal enging the legality of a~~
~~bond-buying program conducted by the ECB since 2015, the Public Sector Purchase Program~~
~~(PSPP). In its ruling, the court directed the German government to request clarification from the~~
~~ECB about various aspects of the PSPP program that the court argued might exceed the ECB’s~~
~~legal mandate. The German government has not yet indicated how it wil formal y respond to the~~
~~ruling, but many analysts contend that the ruling—and the chal enge to the authority of the ECB~~
~~and the European Court of Justice—could have far-reaching implications for future ECB~~
~~activities. This could potential y include chal enges to the ECB’s Pandemic Emergency Purchase~~
~~Program (PEPP) initiated in March. The PEPP is a temporary program that authorizes the ECB to~~
~~acquire up to €750 bil ion (about $820 bil ion) in private and public sector securities to address~~
~~the economic effects of the pandemic crisis.~~
The German court’s ruling has heightened tensions between the court and the European Court of The German court’s ruling has heightened tensions between the court and the European Court of
Justice. Following the 2008-2009 financial crisis and the subsequent Eurozone financial crisis, the Justice. Following the 2008-2009 financial crisis and the subsequent Eurozone financial crisis, the
ECB launched four asset purchase programs in 2014 to provide assistance to ECB launched four asset purchase programs in 2014 to provide assistance to ~~financial y~~financially strapped strapped
Eurozone governments and to sustain financial liquidityEurozone governments and to sustain financial liquidity in Eurozone banks. Those programs in Eurozone banks. Those programs
included the Corporate Sector Purchase Program (CSPP), the Public Sector Purchase Program included the Corporate Sector Purchase Program (CSPP), the Public Sector Purchase Program
(PSPP), the Asset-Backed Securities Purchase Program (ABSPP), and the Third Covered Bond (PSPP), the Asset-Backed Securities Purchase Program (ABSPP), and the Third Covered Bond
Purchase Program (CBPP3). The programs operated from 2014 to 2018; the PSPP was restarted Purchase Program (CBPP3). The programs operated from 2014 to 2018; the PSPP was restarted
in November 2019. As of May 8, the PSPP program held €2.2 in November 2019. As of May 8, the PSPP program held €2.2 ~~tril ion~~trillion (about $2.5 (about $2.5 ~~tril ion~~trillion) with ) with
another €600 another €600 ~~bil ion~~ billion (about $700 (about $700 ~~bil ion~~billion) held under other asset purchase programs.) held under other asset purchase programs.~~160~~191 Various Various
groups in Germany groups in Germany ~~chal enged~~challenged the legality of the ECB bond-buying programs before the German the legality of the ECB bond-buying programs before the German
Constitutional Court arguing that the programs exceeded the ECB’s legal mandate. In turn, the Constitutional Court arguing that the programs exceeded the ECB’s legal mandate. In turn, the
German court referred the case to the European Court of Justice, which ruled in December 2019 German court referred the case to the European Court of Justice, which ruled in December 2019
that the ECB’s actions were fully within the ECB’s authority. that the ECB’s actions were fully within the ECB’s authority.
In the German Constitutional Court’s May 5 ruling, the German judges characterized the ECJ’s In the German Constitutional Court’s May 5 ruling, the German judges characterized the ECJ’s
ruling as “incomprehensible,” and directly ruling as “incomprehensible,” and directly ~~chal enged~~challenged the ECB and the European Court of Justice the ECB and the European Court of Justice
and the primacy of the European Court of Justice ruling over national law. The German justices and the primacy of the European Court of Justice ruling over national law. The German justices
argued that the ECB had exceeded its authority by not fully evaluating the economic costs and argued that the ECB had exceeded its authority by not fully evaluating the economic costs and
benefits of previous bond-buying activities, including the impact on national budgets, property benefits of previous bond-buying activities, including the impact on national budgets, property
values, stock markets, life insurance and other economic effects. The German court also argued values, stock markets, life insurance and other economic effects. The German court also argued
that the ECB’s lack of a strategy for reducing its holdings of sovereign debt of Eurozone that the ECB’s lack of a strategy for reducing its holdings of sovereign debt of Eurozone
members increased risks for national governments that back up the ECB, and it members increased risks for national governments that back up the ECB, and it ~~chal enged~~challenged the the
ECB’s strategy for reducing its holdings of sovereign debt. ECB’s strategy for reducing its holdings of sovereign debt.
On May 18, German On May 18, German ~~Chancel or~~Chancellor Angela Merkel and French President Emmanuel Macron Angela Merkel and French President Emmanuel Macron
proposed a €500 proposed a €500 ~~bil ion~~ billion (about $620 (about $620 ~~bil ion~~billion) EU recovery fund in an effort to gain a coordinated ) EU recovery fund in an effort to gain a coordinated
EU fiscal response to the pandemic.EU fiscal response to the pandemic.~~161~~192 Reportedly, the funds would be raised by the European Reportedly, the funds would be raised by the European
Commission and used to fund EU spending through grants to individual members to ease the Commission and used to fund EU spending through grants to individual members to ease the
economic strain in some of the southern EU members that have been the most negatively economic strain in some of the southern EU members that have been the most negatively
affected. Austria, the Netherland, Denmark, and Sweden indicated they would only support affected. Austria, the Netherland, Denmark, and Sweden indicated they would only support
proposals that provided funds to members through loans that would be required to be repaid.proposals that provided funds to members through loans that would be required to be repaid.
On May 27, ECB President Lagarde indicated that the Bank projected a drop in the EU On May 27, ECB President Lagarde indicated that the Bank projected a drop in the EU economy economy
of 8% to 12% in 2020, twice as severe as the recession following the 2008 financial crisis, and of 8% to 12% in 2020, twice as severe as the recession following the 2008 financial crisis, and

~~160 European Central Bank. https://www.ecb.europa.eu/mopo/implement/pepp/html/pepp -qa.en.html.~~
~~161 Fleming, Sam, Victor Mallet, and Guy Chazan, Germany and France Unite in Call for €500 Billion Europe~~
~~Recovery Fund, Financial Tim es, May 18, 2020. https://www.ft.com/content/c23ebc5e-cbf3-4ad8-85aa-032b574d0562.~~
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~~cal ed~~called for a €500 for a €500 ~~bil ion~~ billion (about $620 (about $620 ~~bil ion)~~ billion) stimulus package.stimulus package.~~162~~193 In addition, European In addition, European
Commission President Ursula von der Leyen proposed a €750 Commission President Ursula von der Leyen proposed a €750 ~~bil ion~~ billion (about $820 (about $820 ~~bil ion)~~ billion) EU EU
recovery fund, termed the “Next Generation Fund,” that would provide €500 recovery fund, termed the “Next Generation Fund,” that would provide €500 ~~bil ion ($550~~
~~bil ion)~~ billion ($550 billion) in grants in a Recovery and Resilience Facility and €250 in grants in a Recovery and Resilience Facility and €250 ~~bil ion ($270 bil ion)~~ billion ($270 billion) in loans. in loans.
The proposal would take the unprecedented step of The proposal would take the unprecedented step of ~~al owing~~allowing the EU to issues bonds the EU to issues bonds
independently from the other EU central banks.independently from the other EU central banks.~~163~~194 Questions remain over the source and Questions remain over the source and
~~distribution of the funds. The program may have limited appeal given various restrictions:~~
distribution of the funds. The program may have limited appeal given various restrictions: 191 European Central Bank. https://www.ecb.europa.eu/mopo/implement/pepp/html/pepp-qa.en.html. 192 Fleming, Sam, Victor Mallet, and Guy Chazan, Germany and France Unite in Call for €500 Billion Europe Recovery Fund, Financial Times, May 18, 2020. https://www.ft.com/content/c23ebc5e-cbf3-4ad8-85aa-032b574d0562. 193 Arnold, Martin, Coronavirus Hit to Eurozone Economy Set to Dwarf Financial Crisis, Financial Times, May 27, 2020. https://www.ft.com/content/a01424e8-089d-4618-babe-72f88184ac57. 194 Birnbaum, Michael, and Loveday Morris, E.U. Proposes $825 Billion Coronavirus Rescue Plan Giving Brussels Power to Raise Money for First Time, The Washington Post, May 27, 2020. https://www.washingtonpost.com/world/europe/angela-merkel-economic-rescue/2020/05/27/9d21b998-9f7c-11ea-be06-af5514ee0385_story.html. Congressional Research Service 46 Global Economic Effects of COVID-19 reportedly, the funds must be used to achieve certain EU goals, including increasing reportedly, the funds must be used to achieve certain EU goals, including increasing
competitiveness, shifting away from declining heavy industry, supporting a green economy, and competitiveness, shifting away from declining heavy industry, supporting a green economy, and
buildingbuilding the digital economy.the digital economy.~~164~~195 Proposals for raising funds include issuing 30-year bonds and Proposals for raising funds include issuing 30-year bonds and
raising taxes on large technology firms, such as Google and Facebook. In addition to the recovery raising taxes on large technology firms, such as Google and Facebook. In addition to the recovery
fund, von der Leyen proposed a revised EC seven-year budget, the Multiannual Financial fund, von der Leyen proposed a revised EC seven-year budget, the Multiannual Financial
Framework (MFF), of €1.Framework (MFF), of €1.~~1tril ion~~1trillion for 2021 to 2027. for 2021 to 2027.
On May 28, several key political On May 28, several key political groups within the EU Parliament voiced their support for new groups within the EU Parliament voiced their support for new
rules that would rules that would ~~al ow~~allow the EU to retaliate the EU to retaliate in such trade areas as services and in such trade areas as services and ~~intel ectual~~intellectual property property
protection without waiting for a WTO ruling. Some Parliamentarians reportedly argued that such protection without waiting for a WTO ruling. Some Parliamentarians reportedly argued that such
expanded authority, termed a “trade bazooka,” was necessary to respond to trade disputes, expanded authority, termed a “trade bazooka,” was necessary to respond to trade disputes,
because the United States had blocked the appointment of judges to the WTO’s because the United States had blocked the appointment of judges to the WTO’s ~~appel ate body.165~~appellate body.196
European leaders, reportedly interested in finalizingEuropean leaders, reportedly interested in finalizing an investment agreement with China, an investment agreement with China,
announced they would not follow President Trump in applying trade restrictions on China for announced they would not follow President Trump in applying trade restrictions on China for
positioning itself to limitpositioning itself to limit Hong Kong’s autonomy granted by the “one country two systems” Hong Kong’s autonomy granted by the “one country two systems”
principle after the end of British rule in 1997.principle after the end of British rule in 1997.~~166~~197 The European Central Bank announced on June 4 that it would double to $1.5 trillion its Pandemic Emergency Purchase Program to stimulate the European economy; it also extended the program to at least June 2021.198 At the same time, the German government announced a package of fiscal measures, including tax cuts, aid to small businesses, cash payments to parent, and other measures totaling €135 billion (about $150 billion). Austria, Denmark, the Netherland, and Sweden have resisted payouts in grants instead of loans that require repayment. The German plan reportedly would give households $336 per child, reduce value added taxes on daily items, and reduce households’ utility bills. The plan also includes about $6 billion for the social security system, $11 billion to assist cities cover housing and other costs, about $2 billion for cultural institutions and nonprofit groups and incentives for purchases of electric vehicles.199
The United Kingdom
The United Kingdom has taken a number of steps to support economic activity. These steps are The United Kingdom has taken a number of steps to support economic activity. These steps are
expected to limit the damage to the UK economy. The Bank of England (BOE)expected to limit the damage to the UK economy. The Bank of England (BOE) forecasted in May forecasted in May
2020 that the UK2020 that the UK economy would contract by 30% in the first half of 2020, but then rebound economy would contract by 30% in the first half of 2020, but then rebound
sharply in the second half of the year, exhibiting a “V” shaped recovery. The Bank of England has sharply in the second half of the year, exhibiting a “V” shaped recovery. The Bank of England has
announced a number of policy initiatives including: announced a number of policy initiatives including:
 On March 11, the BOE adopted a package of four measures to deal with any  On March 11, the BOE adopted a package of four measures to deal with any
economic disruptions associated with COVID-19. The measures included an economic disruptions associated with COVID-19. The measures included an
unscheduled cut in the benchmark interest rate by 50 basis points (0.5%) to a unscheduled cut in the benchmark interest rate by 50 basis points (0.5%) to a
~~historic low of 0.25%; the reintroduction of the Term Funding Scheme for Smal~~
~~and Medium-sized Enterprises (TFSME) that provides banks with over $110~~
~~bil ion for loans at low interest rates; a lowering of banks’ countercyclical capital~~

~~162 Arnold, Martin, Coronavirus Hit to Eurozone Economy Set to Dwarf Financial Crisis, Financial Times, May 27,~~
~~2020. https://www.ft.com/content/a01424e8-089d-4618-babe-72f88184ac57.~~
~~163 Birnbaum, Michael, and Loveday Morris, E.U. Proposes $825 Billion Coronavirus Rescue Plan Giving Brussels~~
~~Power to Raise Money for First T ime, The Washington Post, May 27, 2020.~~
~~https://www.washingtonpost.com/world/europe/angela-merkel-economic-rescue/2020/05/27/9d21b998-9f7c-11ea-~~
~~be06-af5514ee0385_story.html.~~
~~164 Brunsden,~~ 195 Brunsden, Jim and Sam Fleming,Jim and Sam Fleming, How WouldHow Would ~~Ursula~~ Ursula von der Leyen’s Coronavirus Recovery Fundvon der Leyen’s Coronavirus Recovery Fund Work?, Work?,
Financial ~~Tim es~~Times, May 27, 2020. https://www.ft.com/content/ebaa7dcd-b6f7-418f-802b-7a8dbc9668f1. , May 27, 2020. https://www.ft.com/content/ebaa7dcd-b6f7-418f-802b-7a8dbc9668f1.
~~165~~196 Vela, Vela, Jakob Hanke, Jakob Hanke, ~~T rade~~Trade Bazooka Gets Backing Bazooka Gets Backing From Main Political GroupsFrom Main Political Groups in EU Parliament, in EU Parliament, Politico Pro, May , May
28, 2020; 28, 2020; Draft Report, 2019/10273(COD), European Parliament, Committee on International , 2019/10273(COD), European Parliament, Committee on International ~~T rade~~Trade, May 6, 2020., May 6, 2020.
~~166~~ 197 Lau, Stuart Lau, Jakob Hanke Vela, Lau, Stuart Lau, Jakob Hanke Vela, Jacopo Barigazzi,Jacopo Barigazzi, and Finbarr Bermingham, EU Won't Follow and Finbarr Bermingham, EU Won't Follow ~~T rump~~Trump Into a Into a
~~T rade~~Trade War Over Hong Kong, Politico Pro, May 28, 2020. 198 Arnold, Martin, ECB Boosts Bond-Buying Stimulus Package by €600, Financial Times, June 4, 2020. https://www.ft.com/content/c59ab92d-e614-4284-a028-46ee3bcf92f9. 199 Ewing, Jack, and Melissa Eddy, ‘Europe Finally Got the Message’: Leaders Act Together on Message, The New York Times, June 4, 2020. https://www.nytimes.com/2020/06/04/business/europe-coronavirus-economic-support.html?action=click&module=Top%20Stories&pgtype=Homepage War Over Hong Kong, Politico Pro~~, May 28, 2020~~. .
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historic low of 0.25%; the reintroduction of the Term Funding Scheme for Small and Medium-sized Enterprises (TFSME) that provides banks with over $110 billion for loans at low interest rates; a lowering of banks’ countercyclical capital buffer from 1% to zero, which is estimated to support over $200 buffer from 1% to zero, which is estimated to support over $200 ~~bil ion~~billion of bank of bank
lending to businesses; and a freeze in banks’ dividend payments.lending to businesses; and a freeze in banks’ dividend payments.~~167~~
200  On March 15, the BOE reinstituted U.S. dollar swap lines with the Federal  On March 15, the BOE reinstituted U.S. dollar swap lines with the Federal
Reserve. Reserve.
 On March 17, the BOE and the UK Treasury introduced the COVID Corporate  On March 17, the BOE and the UK Treasury introduced the COVID Corporate
Financing Facility (CCFF) to provide assistance to UK firms to bridge through Financing Facility (CCFF) to provide assistance to UK firms to bridge through
Covid-19-related disruptions to their cash flow. Covid-19-related disruptions to their cash flow.
 On March 19, during a Special Monetary Policy Meeting, the Bank of England  On March 19, during a Special Monetary Policy Meeting, the Bank of England
reduced its main interest rate to 0.1%, increased the size of its TFSME fund, and reduced its main interest rate to 0.1%, increased the size of its TFSME fund, and
increased the stock of asset purchases by £200 increased the stock of asset purchases by £200 ~~bil ion~~billion to a total of £645 to a total of £645 ~~bil ion~~billion
financed by issuing UKfinanced by issuing UK government bonds and some additional non-financial government bonds and some additional non-financial
investment-grade corporate bonds.investment-grade corporate bonds.~~168~~201
 On March 20, the BOE participated in an  On March 20, the BOE participated in an ~~international y~~ internationally coordinated central bank coordinated central bank
expansion of liquidity expansion of liquidity through U.S. standing dollar liquiditythrough U.S. standing dollar liquidity swap line swap line
arrangements. arrangements.
 On March, the BOE activated the Contingent Term Repo Facility (CTRF).  On March, the BOE activated the Contingent Term Repo Facility (CTRF).
 On April On April 6, announced the activation of the TFSME ahead of schedule. 6, announced the activation of the TFSME ahead of schedule.
 On April On April 23, the Bank of England indicated it would quadruple its borrowing 23, the Bank of England indicated it would quadruple its borrowing
over the second quarter of 2020, reflecting a contraction in the UK economy, over the second quarter of 2020, reflecting a contraction in the UK economy,
lower tax revenues, and increased financial demands to support fiscal policy lower tax revenues, and increased financial demands to support fiscal policy
measures.measures.~~169~~
202 In terms of fiscal policy, UK In terms of fiscal policy, UK ~~Chancel or~~Chancellor of the Exchequer Rishi Sunak proposed a national of the Exchequer Rishi Sunak proposed a national
budget on March 11, 2020, that included nearly $3.5 budget on March 11, 2020, that included nearly $3.5 ~~bil ion~~ billion in fiscal spending to counter adverse in fiscal spending to counter adverse
economic effects of the pandemic and increased in statutory sick leave by about $2.5 economic effects of the pandemic and increased in statutory sick leave by about $2.5 ~~bil ion~~billion in in
funds to funds to ~~smal~~ small and medium businesses to provide up to 14 days of sick leave for affected and medium businesses to provide up to 14 days of sick leave for affected
employees. The plan provides affected workers up to 80% of their salary, or up to £2,500 a month employees. The plan provides affected workers up to 80% of their salary, or up to £2,500 a month
(about $2,800) if they are laid off. Some estimates indicate that UK spending to support its (about $2,800) if they are laid off. Some estimates indicate that UK spending to support its
economy could rise to about $60 economy could rise to about $60 ~~bil ion~~ billion in 2020.in 2020.~~170~~203 Identified as the Coronavirus Job Retention Identified as the Coronavirus Job Retention
Scheme (CJRS), the program was backdated to start on March 1 and had been expected to run Scheme (CJRS), the program was backdated to start on March 1 and had been expected to run
through May, but was extended to expire the end of June 2020. Prime Minister Johnson also through May, but was extended to expire the end of June 2020. Prime Minister Johnson also
announced that announced that al all pubs, cafés, restaurants, theatres, cinemas, nightclubs, gyms and leisure centers pubs, cafés, restaurants, theatres, cinemas, nightclubs, gyms and leisure centers
would be closed.would be closed.~~171~~204 Part of the fiscal spending package includes open-ended funding for the Part of the fiscal spending package includes open-ended funding for the
National Health Service (NHS), $6 National Health Service (NHS), $6 ~~bil ion~~ billion in emergency funds to the NHS, $600 in emergency funds to the NHS, $600 ~~mil ion hardship~~
~~fund to assist vulnerable people, and tax cuts and tax holidays for smal businesses in certain~~
~~affected sectors.172~~

~~167~~million hardship 200 Romei, Valentina, “Covid-19 Fallout: Bank of England Launches 4 Key Measures,” Romei, Valentina, “Covid-19 Fallout: Bank of England Launches 4 Key Measures,” Financial Times. .
https://www.ft.com/content/4e60c08e-6380-11ea-b3f3-fe4680ea68b5. https://www.ft.com/content/4e60c08e-6380-11ea-b3f3-fe4680ea68b5.
~~168~~201 Johnson, Miles, Chris Giles, Johnson, Miles, Chris Giles, Martin Arnold, and James Politi, “Italy’s PM Urges BrusselsMartin Arnold, and James Politi, “Italy’s PM Urges Brussels to Unleash €500bn to Unleash €500bn
RescueRescue Fund,”Fund,” Financial ~~Tim es~~Times, March 18, 2020. https://www.ft.com/content/5b8205ac-6a06-11ea-800d- March 18, 2020. https://www.ft.com/content/5b8205ac-6a06-11ea-800d-
da70cff6e4d3. da70cff6e4d3.
~~169~~ 202 Giles, Giles, Chris, and Chris, and ~~T ommy~~Tommy Stubbington, UK Stubbington, UK ~~T reasury~~Treasury to Quadruple to Quadruple ~~Borrowing~~ Borrowing to £180bn Over Next Quarter, to £180bn Over Next Quarter,
Financial ~~Tim es~~Times, April 23, 2020. https://www.ft.com/content/8886e002-c260-4daa-8b7b-509b3f7e6edb. , April 23, 2020. https://www.ft.com/content/8886e002-c260-4daa-8b7b-509b3f7e6edb.
~~170~~203 Parker, George Parker, Chris Giles, Parker, George Parker, Chris Giles, and Sebastianand Sebastian Payne, “Sunak Payne, “Sunak ~~T urns~~Turns on Financial Firepower to Help Workers,” on Financial Firepower to Help Workers,”
Financial ~~Tim es~~Times, March 20, 2020. https://www.ft.com/content/826d465a-6ac3-11ea-a3c9-1fe6fedcca75. March 20, 2020. https://www.ft.com/content/826d465a-6ac3-11ea-a3c9-1fe6fedcca75.
~~171~~204 Ibid. ~~Ibid.~~
~~172 Payne, Sebastian and Chris Giles, “Budget 2020: Sunak Unveils £30bn Stimulus to Counter UK Covid-19 Shock,”~~
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fund to assist vulnerable people, and tax cuts and tax holidays for small businesses in certain affected sectors.205 Japan
The Bank of Japan, with already-low interest rates, injected $4.6 The Bank of Japan, with already-low interest rates, injected $4.6 ~~bil ion~~billion in liquidity in liquidity into Japanese into Japanese
banks to provide short-term loans for purchases of corporate bonds and commercial paper and banks to provide short-term loans for purchases of corporate bonds and commercial paper and
twice that amount into exchange traded funds to aid Japanese businesses. The Japanese twice that amount into exchange traded funds to aid Japanese businesses. The Japanese
government also pledged to provide wage subsidies for parents forced to take time off due to government also pledged to provide wage subsidies for parents forced to take time off due to
school closures.school closures.~~173~~206 On March 24, 2020, Japan announced that the Summer Olympics set to take On March 24, 2020, Japan announced that the Summer Olympics set to take
place in Tokyo would be postponed by a year, delaying an expected boost to the Japanese place in Tokyo would be postponed by a year, delaying an expected boost to the Japanese
economy that was expected from the event. Japan reportedly is considering an emergency fiscal economy that was expected from the event. Japan reportedly is considering an emergency fiscal
package of about $515 package of about $515 ~~bil ion~~billion, roughly equivalent to 10% of Japan’s annual gross domestic , roughly equivalent to 10% of Japan’s annual gross domestic
product (GDP). On April 27, 2020, the Bank of Japan announced it would purchase unlimited product (GDP). On April 27, 2020, the Bank of Japan announced it would purchase unlimited
amounts of government bonds and quadruple its purchases of corporate debt to keep interest rates amounts of government bonds and quadruple its purchases of corporate debt to keep interest rates
low and stimulate the Japanese economy.low and stimulate the Japanese economy.~~174~~207
The Japanese Cabinet proposed a second supplemental appropriation measure that includes $296 The Japanese Cabinet proposed a second supplemental appropriation measure that includes $296
~~bil ion~~ billion in spending and a total value of about $1.1 in spending and a total value of about $1.1 ~~tril ion~~ trillion in loans and guarantees, funded through in loans and guarantees, funded through
new bonds. This and a previous set of spending measures reportedly are comparable to 40% of new bonds. This and a previous set of spending measures reportedly are comparable to 40% of
Japan’s GDP and include grants for businesses to pay rents through the Development Bank of Japan’s GDP and include grants for businesses to pay rents through the Development Bank of
Japan and funds to Japan and funds to ~~smal~~ small and medium-sized businesses through the Regional Economy and medium-sized businesses through the Regional Economy
VitalizationVitalization Corporation of Japan, payments to assist furloughed workers, and a reserve fund to Corporation of Japan, payments to assist furloughed workers, and a reserve fund to
provide capital injections to struggling firms through the Japan Investment Corporation.provide capital injections to struggling firms through the Japan Investment Corporation.~~175~~
~~China~~
~~According to a recent CRS In Focus,176~~208 On June 17, the Bank of Japan (BOJ) announced that it was maintaining its low interest rates of -0.1%, even as it increased its coronavirus lending facility from $76 trillion to $1 trillion and would continue to purchase exchange traded funds at the rate of $12 trillion a year.209 The COVID-19 lending facility assists banks in providing zero interest rate loans to businesses. In a separate program, the BOJ is providing about $110 trillion to buy commercial paper and corporate bonds. China According to a recent CRS In Focus,210 China’s economic growth could go negative in the first China’s economic growth could go negative in the first
quarter of 2020 and quarter of 2020 and ~~fal~~ fall below 5% for the year, with more serious effects if the outbreak below 5% for the year, with more serious effects if the outbreak
continues. In early February, China’s central bank pumped $57 continues. In early February, China’s central bank pumped $57 ~~bil ion~~billion into the banking system, into the banking system,
capped banks’ interest rates on loans for major firms, and extended deadlines for banks to curb capped banks’ interest rates on loans for major firms, and extended deadlines for banks to curb
shadow lending. The central bank has been setting the reference rate for China’s currency shadow lending. The central bank has been setting the reference rate for China’s currency
~~stronger than its official close rate to keep it stable. On March 13, 2020, The People’s Bank of~~
~~China announced that it would provide $78.8 bil ion in funding, primarily to smal businesses, by~~
~~reducing bank’s reserve requirements.177~~
~~The International Monetary Fund (IMF) is providing funding to poor and emerging market~~
~~economies that are short on financial resources.178 If the economic effects of the virus persist,~~

~~Financial Tim es~~ 205 Payne, Sebastian and Chris Giles, “Budget 2020: Sunak Unveils £30bn Stimulus to Counter UK Covid-19 Shock,” Financial Times. https://www.ft.com/content/f7b27264-6384-11ea-a6cd-df28cc3c6a68. . https://www.ft.com/content/f7b27264-6384-11ea-a6cd-df28cc3c6a68.
~~173~~206 Harding, Robin Harding, Robin and Hudson Lockett, “and Hudson Lockett, “ BoJ Spurs AsiaBoJ Spurs Asia Markets ReboundMarkets Rebound with Vowwith Vow to Fight Covid-19,” to Fight Covid-19,” Financial
~~Tim es~~Times, March 2, 2020. https://www.ft.com/content/9fa91e06-5c3b-11ea-b0ab-339c2307bcd4. March 2, 2020. https://www.ft.com/content/9fa91e06-5c3b-11ea-b0ab-339c2307bcd4.
~~174~~ 207 Harding, Robin, Bank of Japan Steps up Coronavirus Stimulus Harding, Robin, Bank of Japan Steps up Coronavirus Stimulus With Bond-buyingWith Bond-buying Pledge, Pledge, Financial Times, April , April
27, 2020. https://www.ft.com/content/7ba5c507-df9e-4107-87eb-73afa2c13e91. 27, 2020. https://www.ft.com/content/7ba5c507-df9e-4107-87eb-73afa2c13e91.
~~175~~208 Harding, Robin, Japan’s Cabinet Approves Extra $1.1 Harding, Robin, Japan’s Cabinet Approves Extra $1.1 ~~T rillion~~Trillion Budget to Counter Recession, Budget to Counter Recession, Financial Times, May , May
27, 2020. https://www.ft.com/content/ce7f3564-c997-339c-ad3d-c6d092fb7f1e. 27, 2020. https://www.ft.com/content/ce7f3564-c997-339c-ad3d-c6d092fb7f1e.
~~176~~ 209 Harding, Bank of Japan Pledges $1 trillion in Coronavirus Lending. 210 For additional information about China’s response, see CRS For additional information about China’s response, see CRS In FocusIn Focus IF11434, IF11434, COVID-19: U.S.-China Economic
Considerations, by Karen M. Sutter and Michael D. Sutherland. , by Karen M. Sutter and Michael D. Sutherland.
~~177 Weinland, Don, “ China’s Central Bank Launches $79bn Stimulus for Virus-Hit Companies,” Financial Times,~~
~~March 13, 2020. https://www.ft.com/content/deb56f86-6515-11ea-b3f3-fe4680ea68b5.~~
~~178 Politi, James, “ IMF Sets Aside $50bn for Covid-19-Hit Countries,” Financial Times, March 4, 2020,~~
~~https://www.ft.com/content/83c07594-5e3a-11ea-b0ab-339c2307bcd4.~~
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Congressional Research Service 49 Global Economic Effects of COVID-19 stronger than its official close rate to keep it stable. On March 13, 2020, The People’s Bank of China announced that it would provide $78.8 billion in funding, primarily to small businesses, by reducing bank’s reserve requirements.211 The International Monetary Fund (IMF) is providing funding to poor and emerging market economies that are short on financial resources.212 If the economic effects of the virus persist, countries may need to be proactive in coordinating fiscal and monetary policy responses, similar countries may need to be proactive in coordinating fiscal and monetary policy responses, similar
to actions taken by of the G-20 following the 2008-2009 global financial crisis. to actions taken by of the G-20 following the 2008-2009 global financial crisis.
Multilateral ~~Response179~~Response213
International Monetary Fund
Created in the aftermath of World War II, the IMF’s fundamental mission is to promote Created in the aftermath of World War II, the IMF’s fundamental mission is to promote
international monetary stability. To advance this goal, one of the key functions of the IMF is international monetary stability. To advance this goal, one of the key functions of the IMF is
providing emergency loans to countries facing economic crises. The COVID-19 pandemic has providing emergency loans to countries facing economic crises. The COVID-19 pandemic has
resulted in an unprecedented demand for IMF financial assistance. More than 100 of the IMF’s resulted in an unprecedented demand for IMF financial assistance. More than 100 of the IMF’s
189 member countries have requested IMF programs,189 member countries have requested IMF programs,~~180~~214 and IMF Managing Director Kristalina and IMF Managing Director Kristalina
Georgieva has stated that the IMF stands ready to deploy the entirety of its current lending Georgieva has stated that the IMF stands ready to deploy the entirety of its current lending
capacity—approximately $1 capacity—approximately $1 ~~tril ion—in~~ trillion—in response to the pandemic and resulting economic response to the pandemic and resulting economic
crises.crises.~~181~~215 The IMF has already approved several COVID-related programs, including for Bolivia, The IMF has already approved several COVID-related programs, including for Bolivia,
Chad, the Democratic Republic of Congo, Kyrgyz Republic, Nigeria, Niger, Rwanda, Chad, the Democratic Republic of Congo, Kyrgyz Republic, Nigeria, Niger, Rwanda,
Madagascar, Mozambique, Pakistan, and Togo, among others, and additional programs are Madagascar, Mozambique, Pakistan, and Togo, among others, and additional programs are
expected.expected.~~182~~216
In addition to loans, the IMF has taken a number of other policy steps to bolster its COVID-19 In addition to loans, the IMF has taken a number of other policy steps to bolster its COVID-19
response. The IMF is tapping its Catastrophe Containment and Relief Trust (CCRT), a donor response. The IMF is tapping its Catastrophe Containment and Relief Trust (CCRT), a donor
country trust fund at the IMF, to cover six months of debt payments owed by 29 lowcountry trust fund at the IMF, to cover six months of debt payments owed by 29 low -income -income
countries to the IMF. The IMF also created a new a new Short-term Liquidity Line.countries to the IMF. The IMF also created a new a new Short-term Liquidity Line.~~183~~217 It is a It is a
revolving and renewable backstop for member countries with very strong economic policies in revolving and renewable backstop for member countries with very strong economic policies in
need of short-term and moderate financial support, and intends to support a country’s liquidity need of short-term and moderate financial support, and intends to support a country’s liquidity
buffers. The IMF also adopted proposals to accelerate Board consideration of member financing buffers. The IMF also adopted proposals to accelerate Board consideration of member financing
requests for emergency financing and doubled (to about $100 requests for emergency financing and doubled (to about $100 ~~bil ion~~billion) access to IMF emergency ) access to IMF emergency
~~assistance.~~
~~For FY2021, the Administration had requested authorization for about $38 bil ion for a~~
~~supplemental fund at the IMF (the New Arrangements to Borrow [NAB]). In March 2020,~~
~~Congress enacted this authorization in the Coronavirus Aid, Relief, and Economic Security Act~~
~~(CARES Act, P.L. 116-136) as a way to bolster IMF resources available to support countries~~
~~during the pandemic. There is ongoing debate about whether member countries should contribute~~
~~additional resources to the IMF, whether the IMF should raise funds by sel ing a portion of its~~
~~gold holdings, and whether the IMF should enact policies to buffer member state reserves,~~
~~through a process cal ed an SDR al ocation.~~

~~179 For more information, see CRS~~ assistance. 211 Weinland, Don, “China’s Central Bank Launches $79bn Stimulus for Virus-Hit Companies,” Financial Times, March 13, 2020. https://www.ft.com/content/deb56f86-6515-11ea-b3f3-fe4680ea68b5. 212 Politi, James, “IMF Sets Aside $50bn for Covid-19-Hit Countries,” Financial Times, March 4, 2020, https://www.ft.com/content/83c07594-5e3a-11ea-b0ab-339c2307bcd4. 213 For more information, see CRS Report R46342, Report R46342, COVID-19: Role of the International Financial Institutions, by , by
RebeccaRebecca M. Nelson and Martin A. Weiss. M. Nelson and Martin A. Weiss.
~~180~~214 Remarks by IMF Managing Remarks by IMF Managing Director Kristalina Georgieva DuringDirector Kristalina Georgieva During the G20 Finance Ministers and Central Bank the G20 Finance Ministers and Central Bank
Governors Meeting, International Monetary Fund, April 15, 2020. Governors Meeting, International Monetary Fund, April 15, 2020.
~~181~~ 215 IMF Managing Director Kristalina Georgieva’s Statement Following a G20 Ministerial Call IMF Managing Director Kristalina Georgieva’s Statement Following a G20 Ministerial Call on the Coronavirus on the Coronavirus
Emergency, March 23, 2020. Some policy experts estimate the IMF’s current maximum lending capacity is about $787 Emergency, March 23, 2020. Some policy experts estimate the IMF’s current maximum lending capacity is about $787
billion. billion.
~~182~~216 IMF Lending IMF Lending ~~T racker~~Tracker, https://www.imf.org/en/, https://www.imf.org/en/~~T opics~~Topics/imf-and-covid19/COVID-Lending-/imf-and-covid19/COVID-Lending-~~T racker.~~
~~183~~Tracker. 217 “IMF Adds “IMF Adds ~~Liquidity~~ Liquidity Line to Strengthen COVID-19 Response,” International Monetary Fund, April 15, 2020. Line to Strengthen COVID-19 Response,” International Monetary Fund, April 15, 2020.
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4450 Global Economic Effects of COVID-19 For FY2021, the Administration had requested authorization for about $38 billion for a supplemental fund at the IMF (the New Arrangements to Borrow [NAB]). In March 2020, Congress enacted this authorization in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act, P.L. 116-136) as a way to bolster IMF resources available to support countries during the pandemic. There is ongoing debate about whether member countries should contribute additional resources to the IMF, whether the IMF should raise funds by selling a portion of its gold holdings, and whether the IMF should enact policies to buffer member state reserves, through a process called an SDR allocation.

~~Global Economic Effects of COVID-19~~

World Bank and Regional Development Banks
The World Bank, which finances economic development projects in middle- and low-income The World Bank, which finances economic development projects in middle- and low-income
countries, among other activities, is mobilizing its resources to support developing countries countries, among other activities, is mobilizing its resources to support developing countries
during the COVID-19 pandemic.during the COVID-19 pandemic.~~184~~218 As of June 1, 2020, the World Bank had approved, or was in As of June 1, 2020, the World Bank had approved, or was in
the process of approving, 150 COVID-19 projects, totaling $15 the process of approving, 150 COVID-19 projects, totaling $15 ~~bil ion~~billion, in 99 countries., in 99 countries.~~185~~219
Examples of approved projects include $47 Examples of approved projects include $47 ~~mil ion~~million for the Democratic Republic of Congo to for the Democratic Republic of Congo to
support containment strategies, train medical staff, and provide equipment for diagnostic testing support containment strategies, train medical staff, and provide equipment for diagnostic testing
to ensure rapid case detection; $11.3 to ensure rapid case detection; $11.3 ~~mil ion~~million for Tajikistan to expand intensive care capacity; $20 for Tajikistan to expand intensive care capacity; $20
~~mil ion~~ million for Haitifor Haiti to support diagnostic testing, rapid response teams, and outbreak containment; to support diagnostic testing, rapid response teams, and outbreak containment;
and $1 and $1 ~~bil ion~~ billion for India to support screening, contract tracing, and laboratory diagnostics, procure for India to support screening, contract tracing, and laboratory diagnostics, procure
personal protective equipment, and set up new isolation wards, among other projects.personal protective equipment, and set up new isolation wards, among other projects.~~186~~
220 Over the next 15 months, the World Bank Group estimates it could deploy as much as $160 Over the next 15 months, the World Bank Group estimates it could deploy as much as $160
~~bil ion~~ billion to respond to the COVID-19 pandemic, more than double the amount it committed in to respond to the COVID-19 pandemic, more than double the amount it committed in
FY2019. In AprilFY2019. In April 2020, the World Bank also announced its plans to establish a new multi-donor 2020, the World Bank also announced its plans to establish a new multi-donor
trust fund to help countries prepare for disease outbreaks, the Health Emergency Preparedness trust fund to help countries prepare for disease outbreaks, the Health Emergency Preparedness
and Response Multi-Donor Fund (HEPRF).and Response Multi-Donor Fund (HEPRF).~~187~~221 The new fund is to complement, and augment, the The new fund is to complement, and augment, the
~~$160 bil ion~~ $160 billion of financing provided by the World Bank. of financing provided by the World Bank.
In addition to the World Bank, which has a near-global membership and operates in many sectors In addition to the World Bank, which has a near-global membership and operates in many sectors
in developing countries worldwide, a number of in developing countries worldwide, a number of ~~smal er~~smaller and more specialized multilateral and more specialized multilateral
development banks (MDBs) are also mobilizingdevelopment banks (MDBs) are also mobilizing resources in response to the COVID-19 resources in response to the COVID-19
pandemic. The United States is a member of a number of pandemic. The United States is a member of a number of ~~regional y~~regionally-focused MDBs, including the -focused MDBs, including the
African Development Bank, the Asian Development Bank, the European Bank for Reconstruction African Development Bank, the Asian Development Bank, the European Bank for Reconstruction
and Development, and the Inter-American Development Bank, as and Development, and the Inter-American Development Bank, as ~~wel as the functional y~~well as the functionally-focused -focused
International Fund for Agricultural Development. The United States does not belong to some International Fund for Agricultural Development. The United States does not belong to some
MDBs, including the Chinese-led Asian Infrastructure Investment Bank and the New MDBs, including the Chinese-led Asian Infrastructure Investment Bank and the New
Development Bank created by the BRICS countries (Brazil, Russia, India, China, and South Development Bank created by the BRICS countries (Brazil, Russia, India, China, and South
Africa), the European Investment Bank, or the Islamic Development Bank. Africa), the European Investment Bank, or the Islamic Development Bank.
In response to COVID-19, MDBs are reprogramming existing projects, establishing and funding In response to COVID-19, MDBs are reprogramming existing projects, establishing and funding
with existing resources lending facilities dedicated to the COVID-19 response, and streamlining with existing resources lending facilities dedicated to the COVID-19 response, and streamlining
~~approval procedures. According to the President of the World Bank, other multilateral~~
~~development banks have committed roughly $80 bil ion over the next 15 months to respond to~~
~~COVID-19.188 Together with the World Bank’s commitment of $160 bil ion, $240 bil ion in~~
~~financing is to be made available to developing countries from the MDBs during this time~~
~~period.189~~
~~To support the MDB response to COVID-19, Congress accelerated authorizations requested by~~
~~the Administration for FY2021 for two lending facilities at the World Bank and two lending~~
~~facilities at the African Development Bank in the CARES Act (P.L. 116-136). Given the~~

~~184~~ 218 Remarks by World Bank Group President David Malpass Remarks by World Bank Group President David Malpass on G20 Finance Ministers Conference Call on COVIDon G20 Finance Ministers Conference Call on COVID -19, -19,
March 23, 2020. March 23, 2020.
~~185~~219 https://maps.worldbank.org/. Accessed https://maps.worldbank.org/. Accessed on June 1, 2020. on June 1, 2020.
~~186~~220 World Bank, “World Bank Group Launches First Operations for COVID-19 (Coronavirus) Emergency Health World Bank, “World Bank Group Launches First Operations for COVID-19 (Coronavirus) Emergency Health
Support, Strengthening Developing Country Response,” Press Release,Support, Strengthening Developing Country Response,” Press Release, April 2, 2020. April 2, 2020.
~~187~~221 World Bank, “World Bank Group to Launch New World Bank, “World Bank Group to Launch New Multi-donor Multi-donor ~~T rust~~Trust Fund to help Countries Prepare for Disease Fund to help Countries Prepare for Disease
Outbreaks,” Press Release,Outbreaks,” Press Release, ~~April 17, 2020.~~
~~188 David Malpass, “ Remarks to G20 Finance Ministers,” World Bank, April 15, 2020.~~
~~189 World Bank Group President David Malpass: Remarks to G20 Finance Ministers, April 15, 2020.~~
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April 17, 2020. Congressional Research Service 51 Global Economic Effects of COVID-19 approval procedures. According to the President of the World Bank, other multilateral development banks have committed roughly $80 billion over the next 15 months to respond to COVID-19.222 Together with the World Bank’s commitment of $160 billion, $240 billion in financing is to be made available to developing countries from the MDBs during this time period.223 To support the MDB response to COVID-19, Congress accelerated authorizations requested by the Administration for FY2021 for two lending facilities at the World Bank and two lending facilities at the African Development Bank in the CARES Act (P.L. 116-136). Given the unprecedented demand for MDB resources, discussions are underway about whether the MDBs unprecedented demand for MDB resources, discussions are underway about whether the MDBs
should pursue fiduciary reforms that would should pursue fiduciary reforms that would ~~al ow~~allow them to expand their lending based on existing them to expand their lending based on existing
resources, particularly lending against donor country guarantees to the institutions (resources, particularly lending against donor country guarantees to the institutions (~~cal ed~~
~~“cal able~~called “callable” capital). ” capital).
International Economic Cooperation
On March 16, 2020, the leaders of the G-7 countries (Canada, France, Germany, Italy, Japan, the On March 16, 2020, the leaders of the G-7 countries (Canada, France, Germany, Italy, Japan, the
United Kingdom, and the United States) held an emergency summit by teleconference to discuss United Kingdom, and the United States) held an emergency summit by teleconference to discuss
and coordinate their policy responses to the economic and coordinate their policy responses to the economic ~~fal out~~fallout from the global spread of COVID- from the global spread of COVID-
19. In the joint statement released by the G-7 leaders after the emergency teleconference summit, 19. In the joint statement released by the G-7 leaders after the emergency teleconference summit,
the leaders stressed they are committed to doing “whatever is necessary to ensure a strong global the leaders stressed they are committed to doing “whatever is necessary to ensure a strong global
response through closer cooperation and enhanced cooperation of efforts.”response through closer cooperation and enhanced cooperation of efforts.”~~190~~224 The countries The countries
pledged to coordinate research efforts, increase the availability of medical equipment; mobilize pledged to coordinate research efforts, increase the availability of medical equipment; mobilize
“the full range” of policy instruments, including monetary and fiscal measures as “the full range” of policy instruments, including monetary and fiscal measures as ~~wel~~ well as targeted as targeted
actions, to support workers, companies, and sectors most affected by the spread of COVID-19; actions, to support workers, companies, and sectors most affected by the spread of COVID-19;
task the finance ministers to coordinate on a weekly basis, and direct the IMF and the World Bank task the finance ministers to coordinate on a weekly basis, and direct the IMF and the World Bank
Group, as Group, as ~~wel~~ well as other international organizations, to support countries worldwide as part of a as other international organizations, to support countries worldwide as part of a
coordinated global response.coordinated global response.~~191~~
225 Saudi Arabia, the 2020 chair of the G-20, Saudi Arabia, the 2020 chair of the G-20, ~~cal ed~~called an emergency G-20 summit on March 25 to an emergency G-20 summit on March 25 to
discuss a response to the pandemic.discuss a response to the pandemic.~~192~~226 The G-20 is a broader group of economies, including the The G-20 is a broader group of economies, including the
G-7 countries and several major emerging markets.G-7 countries and several major emerging markets.~~193~~227 During the global financial crisis, world During the global financial crisis, world
leaders decided that henceforth the G-20 would be the premiere forum for international economic leaders decided that henceforth the G-20 would be the premiere forum for international economic
cooperation. Some analysts have been surprised that the G-7 has been in front of the G-20 in cooperation. Some analysts have been surprised that the G-7 has been in front of the G-20 in
responding to COVID-19, while other analysts have questioned whether the larger size and responding to COVID-19, while other analysts have questioned whether the larger size and
diversity of economies in the G-20 can make coordination more difficult.diversity of economies in the G-20 can make coordination more difficult.~~194~~228
Analysts are hopeful that the recent G-7 summit, and a G-20 summit, Analysts are hopeful that the recent G-7 summit, and a G-20 summit, ~~wil~~ will mark a shift towards mark a shift towards
greater international cooperation at the highest (leader) levels in combatting the economic greater international cooperation at the highest (leader) levels in combatting the economic ~~fal out~~
~~from the spread of COVID-19.195 An emergency meeting of G-7 finance ministers on March 3,~~
~~2020, fel short of the aggressive and concrete coordinated action that investors and economists~~
~~had been hoping for, and U.S. and European stock markets fel after the meeting.196 More~~
~~general y, governments have been divided over the appropriate response and in some cases have~~
~~acted unilateral y, particularly when closing borders and imposing export restrictions on medical~~
~~equipment and medicine. Some experts argue that a large, early, and coordinated response is~~
~~needed to address the economic fal out from COVID-19, but several concerns loom about the G-~~
~~20’s ability to deliver.197 Their concerns focus on the Trump Administration’s prioritization of an~~

~~190 White House, G-7~~ fallout 222 David Malpass, “Remarks to G20 Finance Ministers,” World Bank, April 15, 2020. 223 World Bank Group President David Malpass: Remarks to G20 Finance Ministers, April 15, 2020. 224 White House, G-7 Leaders’ Statement, March 16, 2020, https://www.whitehouse.gov/briefings-statements/g7-Leaders’ Statement, March 16, 2020, https://www.whitehouse.gov/briefings-statements/g7-
leaders-statement/. leaders-statement/.
~~191~~ 225 Ibid Ibid
~~192~~226 “Spain Says “Spain Says ~~Saudi~~ Saudi Arabia to Cal G-20 to Meet on Covid-19 in Coming Days,” Arabia to Cal G-20 to Meet on Covid-19 in Coming Days,” Reuters, March 16, 2020. , March 16, 2020.
~~193 T he~~227 The G-20 includes G-20 includes the G-7 countries plusthe G-7 countries plus Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia, Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia,
SaudiSaudi Arabia,Arabia, South Africa, South Korea, South Africa, South Korea, ~~T urkey~~Turkey, and the European Union (EU)., and the European Union (EU).
~~194~~ 228 For more information about the G-20, see CRS For more information about the G-20, see CRS Report R40977, Report R40977, The G-20 and International Economic Cooperation:
Background and ~~Im plications~~Implications for Congress, by Rebecca, by Rebecca ~~M. Nelson.~~
~~195 See for example, Jennifer Rankin, “EU Leaders Divided on How to Protect Economies after Covid-19,”~~ ~~The~~
~~Guardian, March 14, 2020.~~
~~196 Jack Ewing and Jeanna Smialek, “Economic Powers Vow to Fight Crisis,” New York Times, March 3, 2020.~~
~~197 Matthew Goodman and Mark Sobel, “T ime to Pull the G-20 Fire Bell,” Center for Strategic and International~~
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M. Nelson. Congressional Research Service 52 Global Economic Effects of COVID-19 from the spread of COVID-19.229 An emergency meeting of G-7 finance ministers on March 3, 2020, fell short of the aggressive and concrete coordinated action that investors and economists had been hoping for, and U.S. and European stock markets fell after the meeting.230 More generally, governments have been divided over the appropriate response and in some cases have acted unilaterally, particularly when closing borders and imposing export restrictions on medical equipment and medicine. Some experts argue that a large, early, and coordinated response is needed to address the economic fallout from COVID-19, but several concerns loom about the G-20’s ability to deliver.231 Their concerns focus on the Trump Administration’s prioritization of an “America First” foreign policy over one committed to multilateralism; the 2020 chair of the G-20, “America First” foreign policy over one committed to multilateralism; the 2020 chair of the G-20,
Saudi Arabia, is embroiled in its own domestic political issues and oil price war; and U.S.-China Saudi Arabia, is embroiled in its own domestic political issues and oil price war; and U.S.-China
tensions make G-20 consensus more difficult. tensions make G-20 consensus more difficult.
Meanwhile, international organizations including the IMF and multilateral Meanwhile, international organizations including the IMF and multilateral development banks, development banks,
have tried to forge ahead with economic support given their current resources. have tried to forge ahead with economic support given their current resources. ~~Additional y~~Additionally, the , the
Financial Stability Board (FSB), an international body including the United States that monitors Financial Stability Board (FSB), an international body including the United States that monitors
the global financial system and makes regulations to ensure stability, released a statement on the global financial system and makes regulations to ensure stability, released a statement on
March 20, 2020, that its members are actively cooperating to maintain financial stability during March 20, 2020, that its members are actively cooperating to maintain financial stability during
market stress related to COVID-19.market stress related to COVID-19.~~198~~232 The FSB is encouraging governments to use flexibility The FSB is encouraging governments to use flexibility
within existing international standards to provide continued access to funding for market within existing international standards to provide continued access to funding for market
participants and for businesses and households facing temporary difficulties from COVID-19, participants and for businesses and households facing temporary difficulties from COVID-19,
while noting that many FSB members have already taken action to release availablewhile noting that many FSB members have already taken action to release available capital and capital and
~~liquidity~~ liquidity buffers. buffers.
Estimated Effects on Developed and Major
Economies
Among most developed and major developing economies, economic growth at the beginning of Among most developed and major developing economies, economic growth at the beginning of
2020 was tepid, but 2020 was tepid, but ~~stil~~ still was estimated to be positive. Countries highly dependent on trade—was estimated to be positive. Countries highly dependent on trade—
Canada, Germany, Italy, Japan, Mexico, and South Korea—and commodity exporters are now Canada, Germany, Italy, Japan, Mexico, and South Korea—and commodity exporters are now
projected to be the most negatively affected by the slowdown in economic activity associated projected to be the most negatively affected by the slowdown in economic activity associated
with the virus.with the virus.~~199~~233 In addition, travel bans and quarantines are taking a heavy economic toll on a In addition, travel bans and quarantines are taking a heavy economic toll on a
broad range of countries. The OECD notes that production declines in China have broad range of countries. The OECD notes that production declines in China have ~~spil over~~spillover
effects around the world given China’s role in producing computers, electronics, pharmaceuticals effects around the world given China’s role in producing computers, electronics, pharmaceuticals
and transport equipment, and as a primary source of demand for many commodities.and transport equipment, and as a primary source of demand for many commodities.~~200~~234 Across Across
Asia, some forecasters argue that recent data indicate that Japan, South Korea, Thailand, the Asia, some forecasters argue that recent data indicate that Japan, South Korea, Thailand, the
Philippines, Indonesia, Malaysia, and VietnamPhilippines, Indonesia, Malaysia, and Vietnam could experience an economic recession in could experience an economic recession in
2020.2020.~~201~~
~~In early January 2020, before the COVID-19 outbreak, economic growth in developing~~
~~economies as a whole was projected by the International Monetary Fund (IMF) to be slightly~~
~~more positive than in 2019. This outlook was based on progress being made in U.S.-China trade~~
~~talks that were expected to rol back some tariffs and an increase in India’s rate of growth.~~
~~Growth rates in Latin America and the Middle East were also projected to be positive in 2020.202~~
~~These projections likely wil be revised downward due to the slowdown in global trade associated~~
~~with COVID-19, lower energy and commodity prices, an increase in the foreign exchange value~~
~~of the dollar, and other secondary effects that could curtail growth. Commodity exporting~~

~~Studies, March 18, 2020.~~
~~198 “FSB~~ 235 229 See for example, Jennifer Rankin, “EU Leaders Divided on How to Protect Economies after Covid-19,” The Guardian, March 14, 2020. 230 Jack Ewing and Jeanna Smialek, “Economic Powers Vow to Fight Crisis,” New York Times, March 3, 2020. 231 Matthew Goodman and Mark Sobel, “Time to Pull the G-20 Fire Bell,” Center for Strategic and International Studies, March 18, 2020. 232 “FSB Coordinates Financial Sector Work to Buttress the Economy in Response to Covid-19,” Financial Stability Coordinates Financial Sector Work to Buttress the Economy in Response to Covid-19,” Financial Stability
Board, Press Release 6/2020, March 20, 2020. Board, Press Release 6/2020, March 20, 2020.
~~199~~233 OECD Interim Economic Assessment, p. 7. p. 7.
~~200~~234 Ibid., Ibid., p. 5. p. 5.
~~201~~235 Arnold, Martin Arnold and Valentina Romei, “European Factory Output Plummets as Covid-19 Shutdown Arnold, Martin Arnold and Valentina Romei, “European Factory Output Plummets as Covid-19 Shutdown Bites,” Congressional Research Service 53 link to page 58 Global Economic Effects of COVID-19 In early January 2020, before the COVID-19 outbreak, economic growth in developing economies as a whole was projected by the~~Bites,”~~
Financial Tim es, April 1, 2020. https://www.ft.com/content/8646c0ee-8fba-4e4c-a047-cf445ff41cf6.
202 Tentative Stabilization, Sluggish Recovery? World Economic Outlook Update~~, January 20, 2020, T he~~ International International
~~Monetary Fund. https://www.imf.org/en/Publications/WEO/Issues/2020/01/20/weo-update-january2020.~~
~~Congressional Research Service~~

47

~~link to page 52 link to page 53~~

~~Global Economic Effects of COVID-19~~

~~countries, in particular, likely wil experience a greater slowdown in growth than forecasted in~~
Monetary Fund (IMF) to be slightly more positive than in 2019. This outlook was based on progress being made in U.S.-China trade talks that were expected to roll back some tariffs and an increase in India’s rate of growth. Growth rates in Latin America and the Middle East were also projected to be positive in 2020.236 These projections likely will be revised downward due to the slowdown in global trade associated with COVID-19, lower energy and commodity prices, an increase in the foreign exchange value of the dollar, and other secondary effects that could curtail growth. Commodity exporting countries, in particular, likely will experience a greater slowdown in growth than forecasted in earlier projections as a result of a slowdown on trade with China and lower commodity prices. earlier projections as a result of a slowdown on trade with China and lower commodity prices.
Emerging Markets
The combined impact of COVID-19, an increase in the value of the dollar, and an oil price war The combined impact of COVID-19, an increase in the value of the dollar, and an oil price war
between Saudi Arabia and Russia are hitting developing and emerging economies hard. Not between Saudi Arabia and Russia are hitting developing and emerging economies hard. Not al all of of
these countries have the resources or policy flexibility to respond effectively. According to figures these countries have the resources or policy flexibility to respond effectively. According to figures
compiled by the Institute for International Finance (IIF), cumulative capital outflows from compiled by the Institute for International Finance (IIF), cumulative capital outflows from
developing countries since January 2020 are double the level experienced during the 2008/2009 developing countries since January 2020 are double the level experienced during the 2008/2009
crisis and crisis and ~~substantial y~~substantially higher than recent market events higher than recent market events (Figure 9~~).203~~10).237
Figure 910. Capital Flows to Emerging Markets in Global Shocks

Source: OriginalOriginal graphic and data fromgraphic and data from International Institute for Finance using data from Haver. Edited by CRS International Institute for Finance using data from Haver. Edited by CRS
for clarification. for clarification.
~~The impact of the price war and lower energy demand associated with a COVID-19-related~~
~~economic slowdown is especial y hard on oil and gas exporters, some of whose currencies are at~~
~~record lows (Figure 10). Oil importers, such as South Africa and Turkey, have also been hit hard;~~
~~South Africa’s rand has fal en 18%204 against the dollar since the beginning of 2020 and the~~
~~Turkish lira has lost 8.5%.205 Some economists are concerned that the depreciation in currencies~~

~~203 T hese~~ Financial Times, April 1, 2020. https://www.ft.com/content/8646c0ee-8fba-4e4c-a047-cf445ff41cf6. 236 Tentative Stabilization, Sluggish Recovery? World Economic Outlook Update, January 20, 2020, The International Monetary Fund. https://www.imf.org/en/Publications/WEO/Issues/2020/01/20/weo-update-january2020. 237 These include concerns in 2015 over China’s renminbi devaluation and the so include concerns in 2015 over China’s renminbi devaluation and the so -called “-called “~~T aper T antrum~~Taper Tantrum” in 2013 when ” in 2013 when
the Federal Reserve announced that it would slowthe Federal Reserve announced that it would slow ~~down~~ down the pace of its post global financial crisis asset purchases. the pace of its post global financial crisis asset purchases.
~~Sergei~~ Sergei Lanau andLanau and Jonathan Fortun, “Economic Views—Jonathan Fortun, “Economic Views—~~T he~~The COVID-19 Shock to EM Flows,” COVID-19 Shock to EM Flows,” Institute for International Finance, March 17, 2020. Congressional Research Service 54 link to page 59 Global Economic Effects of COVID-19 The impact of the price war and lower energy demand associated with a COVID-19-related economic slowdown is especially hard on oil and gas exporters, some of whose currencies are at record lows (Figure 11). Oil importers, such as South Africa and Turkey, have also been hit hard; South Africa’s rand has fallen 18%238 against the dollar since the beginning of 2020 and the Turkish lira has lost 8.5%.239 Some economists are concerned that the depreciation in currencies ~~Institute for~~
~~International Finance, March 17, 2020.~~
~~204 Paul Wallace, “Here’s How the Oil Crash is Hitting Emerging Market Currencies,” Bloomberg, March 17, 2020,~~
~~https://www.bloomberg.com/news/articles/2020-03-17/here-s-how-the-oil-crash-is-hitting-emerging-market-currencies.~~
~~205 Nevzat Devranoglu, “T urkish Lira Hits Weakest Level Since 2018 Currency Crisis Due to Covid-19,” Nasdaq,~~
~~March 17, 2020, https://www.nasdaq.com/articles/turkish-lira-hits-weakest -level-since-2018-currency-crisis-due-to-~~
~~Covid-19-2020-03-17.~~
~~Congressional Research Service~~

48

~~Global Economic Effects of COVID-19~~

could lead to rising rates of inflation by pushing up the prices of imports and negatively economic could lead to rising rates of inflation by pushing up the prices of imports and negatively economic
growth rates in 2020.growth rates in 2020.~~206~~240
Depending on individual Depending on individual levels of foreign exchange reserves and the duration of the capital flow levels of foreign exchange reserves and the duration of the capital flow
slowdown, some countries may have sufficient buffers to weather the slowdown, while others slowdown, some countries may have sufficient buffers to weather the slowdown, while others
~~wil likely~~ will likely need to make some form of current account adjustment (reduce spending, raise taxes, need to make some form of current account adjustment (reduce spending, raise taxes,
etc.). Several countries, such as Iran and Venezuela, have already asked the IMF for financial etc.). Several countries, such as Iran and Venezuela, have already asked the IMF for financial
assistance and others are likely to follow.assistance and others are likely to follow.~~207~~241 (Venezuela’s request was quickly rebuffed due to (Venezuela’s request was quickly rebuffed due to
disagreement among the IMF membership over who is recognized as Venezuela’s legitimate disagreement among the IMF membership over who is recognized as Venezuela’s legitimate
leader: Nicolás Maduro or Juan Guaidó.leader: Nicolás Maduro or Juan Guaidó.~~208~~242) )
Figure 1011. Depreciation Against the Dollar Since January 1, 2020

Source: Created by CRS. Data from Bloomberg. Created by CRS. Data from Bloomberg.
~~International Economic Cooperation~~
~~Initial efforts at coordinating the economic response to the COVID-19 pandemic across countries~~
~~have been uneven. Governments are divided over the appropriate response and in some cases~~
~~have acted unilateral y, particularly when closing borders and imposing export restrictions on~~
~~medical equipment and medicine. An emergency meeting of G-7 (Canada, France, Germany,~~
~~Italy, Japan, the United Kingdom, and the United States) finance ministers on March 3, 2020, fel~~
~~short of the aggressive and concrete coordinated action that investors and economists had been~~
~~hoping for, and U.S. and European stock markets fel sharply after the meeting.209 However, on~~
~~March 16, 2020, the leaders of the G-7 countries held an emergency summit by teleconference to~~
~~discuss and coordinate their policy responses to the economic fal out from the global spread of~~

~~206 Johnson, Steve, “Currency Sell-Off T hreatens~~ 238 Paul Wallace, “Here’s How the Oil Crash is Hitting Emerging Market Currencies,” Bloomberg, March 17, 2020, https://www.bloomberg.com/news/articles/2020-03-17/here-s-how-the-oil-crash-is-hitting-emerging-market-currencies. 239 Nevzat Devranoglu, “Turkish Lira Hits Weakest Level Since 2018 Currency Crisis Due to Covid-19,” Nasdaq, March 17, 2020, https://www.nasdaq.com/articles/turkish-lira-hits-weakest-level-since-2018-currency-crisis-due-to-Covid-19-2020-03-17. 240 Johnson, Steve, “Currency Sell-Off Threatens Emerging Market Response to Covid-19,” Emerging Market Response to Covid-19,” Financial Times, March 3, , March 3,
2020. https://www.ft.com/content/94ad9d70-2ca2-4490-96fb-5b01b509ed37. 2020. https://www.ft.com/content/94ad9d70-2ca2-4490-96fb-5b01b509ed37.
~~207~~241 “COVID-19-Hit Iran Asks IMF for Aid “COVID-19-Hit Iran Asks IMF for Aid amid USamid US Sanctions,” Sanctions,” Deutsche Walle, March 13, 2020, , March 13, 2020,
https://www.dw.com/en/covid-19-hit-iran-asks-imf-for-aid-amid-us-sanctions/a-52763114. Iran is currently under U.S. https://www.dw.com/en/covid-19-hit-iran-asks-imf-for-aid-amid-us-sanctions/a-52763114. Iran is currently under U.S.
sanctions, which include,sanctions, which include, among other things, prohibitions on the ability of the United States to vote in favor of lending among other things, prohibitions on the ability of the United States to vote in favor of lending
IMF or World Bank assistance to Iran. IMF or World Bank assistance to Iran. ~~T he~~The United States, however, cannot unilaterally block lending to a particular United States, however, cannot unilaterally block lending to a particular
country. Approving an IMF or World Bank loan requirescountry. Approving an IMF or World Bank loan requires a majority of the total voting power and the U.S.a majority of the total voting power and the U.S. voting voting
power is 16.5% of the total voting power at the IMF and 15.4% at the World Bank. Iran has not borrowed from the IMF power is 16.5% of the total voting power at the IMF and 15.4% at the World Bank. Iran has not borrowed from the IMF
since 1962, but didsince 1962, but did ~~borrow~~ borrow from the World Bank between 2003 and 2005 over U.S. from the World Bank between 2003 and 2005 over U.S. ~~oppo sition.~~
~~208~~opposition. 242 Joshua Goodman, “ Joshua Goodman, “ IMF Rejects Maduro’sIMF Rejects Maduro’s ~~Bid~~ Bid for Emergency Loan to Fight Virus,”for Emergency Loan to Fight Virus,” StarTribune, ,
http://www.startribune.com/venezuela-seeks-emergency-5-billion-imf-loan-to-fight-virus/568868442/. http://www.startribune.com/venezuela-seeks-emergency-5-billion-imf-loan-to-fight-virus/568868442/.
~~209 Jack Ewing and Jeanna Smialek, “Economic Powers Vow to Fight Crisis,” New York Times, March 3, 2020.~~
~~Congressional Research Service~~

49

~~link to page 55 link to page 55~~ ~~Global Economic Effects of COVID-19~~

Congressional Research Service 55 Global Economic Effects of COVID-19 International Economic Cooperation Initial efforts at coordinating the economic response to the COVID-19 pandemic across countries have been uneven. Governments are divided over the appropriate response and in some cases have acted unilaterally, particularly when closing borders and imposing export restrictions on medical equipment and medicine. An emergency meeting of G-7 (Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States) finance ministers on March 3, 2020, fell short of the aggressive and concrete coordinated action that investors and economists had been hoping for, and U.S. and European stock markets fell sharply after the meeting.243 However, on March 16, 2020, the leaders of the G-7 countries held an emergency summit by teleconference to discuss and coordinate their policy responses to the economic fallout from the global spread of COVID-19. In the joint statement released by the G-7 leaders after the emergency teleconference COVID-19. In the joint statement released by the G-7 leaders after the emergency teleconference
summit, the leaders stressed they are committed to doing “whatever is necessary to ensure a summit, the leaders stressed they are committed to doing “whatever is necessary to ensure a
strong global response through closer cooperation and enhanced cooperation of efforts.”strong global response through closer cooperation and enhanced cooperation of efforts.”~~210~~244 The The
countries pledged to coordinate research efforts, increase the availability of medical equipment; countries pledged to coordinate research efforts, increase the availability of medical equipment;
mobilizemobilize “the full range” of policy instruments, including monetary and fiscal measures as “the full range” of policy instruments, including monetary and fiscal measures as ~~wel~~ well as as
targeted actions, to support workers, companies, and sectors most affected by the spread of targeted actions, to support workers, companies, and sectors most affected by the spread of
COVID-19; task the finance ministers to coordinate on a weekly basis, and direct the IMF and the COVID-19; task the finance ministers to coordinate on a weekly basis, and direct the IMF and the
World Bank Group, as World Bank Group, as ~~wel~~ well as other international organizations, to support countries worldwide as other international organizations, to support countries worldwide
as part of a coordinated global response.as part of a coordinated global response.~~211~~245 G-7 coordination has not been unproblematic G-7 coordination has not been unproblematic
however, including disagreement among G-7 foreign affairs ministers about how to refer to the however, including disagreement among G-7 foreign affairs ministers about how to refer to the
virus (coronavirus or the “Wuhan virus”) and concerns about collaboration on vaccine research.virus (coronavirus or the “Wuhan virus”) and concerns about collaboration on vaccine research.~~212~~
246 The United States is chairing the G-7 in 2020, and while the June summit at Camp David had The United States is chairing the G-7 in 2020, and while the June summit at Camp David had
been canceled due to concerns about COVID-19, on May 20, President Trump indicated that the been canceled due to concerns about COVID-19, on May 20, President Trump indicated that the
summit may be held after summit may be held after al all. .
The G-20, which has a broader membership of major advanced and emerging-market economies The G-20, which has a broader membership of major advanced and emerging-market economies
representing 85% of world GDP, was slower to respond to the pandemic.representing 85% of world GDP, was slower to respond to the pandemic.~~213~~247 Even though G-20 Even though G-20
coordination is widely viewed as critical in the response to the global financial crisis of 2008-coordination is widely viewed as critical in the response to the global financial crisis of 2008-
2009, several factors may have complicated G-20 coordination in the current context: the Trump 2009, several factors may have complicated G-20 coordination in the current context: the Trump
Administration’s prioritization of an “America First” foreign policy over one committed to Administration’s prioritization of an “America First” foreign policy over one committed to
multilateralism;multilateralism; the 2020 chair of the G-20, Saudi Arabia, is embroiled in its own domestic the 2020 chair of the G-20, Saudi Arabia, is embroiled in its own domestic
political issues and oil price war; and U.S.-China tensions make G-20 consensus more difficult.political issues and oil price war; and U.S.-China tensions make G-20 consensus more difficult.~~214~~248
The G-20 held a summit by teleconference on March 26, 2020, but the resulting communique was The G-20 held a summit by teleconference on March 26, 2020, but the resulting communique was
criticized for failing to include concrete action items beyond what national governments were criticized for failing to include concrete action items beyond what national governments were
already doing.already doing.~~215~~249 However, G-20 coordination appears to be gaining momentum, most notably However, G-20 coordination appears to be gaining momentum, most notably
~~with the G-20 agreement on debt relief for low-income countries (see “Looming Debt Crises and~~
~~Debt Relief Efforts”).~~
~~Meanwhile, international organizations including the IMF and multilateral development banks,~~
~~have tried to forge ahead with economic support given their current resources. Additional y, the~~
~~Financial Stability Board (FSB), an international body including the United States that monitors~~
~~the global financial system and makes regulations to ensure stability, released a statement on~~
~~March 20, 2020 that its members are actively cooperating to maintain financial stability during~~
~~market stress related to COVID-19.216 The FSB is encouraging governments to use flexibility~~
~~within existing international standards to provide continued access to funding for market~~
~~participants and for businesses and households facing temporary difficulties from COVID-19,~~

~~210 White House, G-7~~ 243 Jack Ewing and Jeanna Smialek, “Economic Powers Vow to Fight Crisis,” New York Times, March 3, 2020. 244 White House, G-7 Leaders’ Statement, March 16, 2020, https://www.whitehouse.gov/briefings-statements/g7-Leaders’ Statement, March 16, 2020, https://www.whitehouse.gov/briefings-statements/g7-
leaders-statement/. leaders-statement/.
~~211~~245 Ibid Ibid
~~212~~246 “Pompeo, G-7 Foreign Ministers Spar over ‘Wuhan Virus’,” “Pompeo, G-7 Foreign Ministers Spar over ‘Wuhan Virus’,” Politico, March 25, 2020; Katrin Bennhold and David , March 25, 2020; Katrin Bennhold and David
E. Sanger,E. Sanger, “U.S. Offered ‘Large Sum’“U.S. Offered ‘Large Sum’ to German Company for Access to Coronavirus Vaccine Research, German to German Company for Access to Coronavirus Vaccine Research, German
Officials Say,”Officials Say,” ~~New York T imes~~ New York Times, March 15, 2020. , March 15, 2020.
~~213 T he~~ 247 The G-20 includes G-20 includes the G-7 countries plusthe G-7 countries plus Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia, Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia,
SaudiSaudi Arabia,Arabia, South Africa, South Korea, South Africa, South Korea, ~~T urkey~~Turkey, and the European Union (EU)., and the European Union (EU).
~~214~~ 248 Matthew Goodman and Mark Sobel, Matthew Goodman and Mark Sobel, ~~“T ime~~ “Time to Pull the G-20 Fire Bell,” Center for Strategic and International to Pull the G-20 Fire Bell,” Center for Strategic and International
Studies,Studies, March 18, 2020. March 18, 2020.
~~215~~249 Matthew Goodman, Stephanie Segal, Matthew Goodman, Stephanie Segal, and Mark Sobel,and Mark Sobel, “Assessing“Assessing the G20 Virtualthe G20 Virtual Summit,” Center for Strategic Summit,” Center for Strategic
and International Studies, March 27, 2020. and International Studies, March 27, 2020.
~~216 “FSB Coordinates Financial Sector Work to Buttress the Economy in Response to Covid-19,” Financial Stability~~
~~Board, Press Release 6/2020, March 20, 2020.~~
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~~Global Economic Effects of COVID-19~~

~~while noting that many FSB members have already taken action to release available capital and~~
~~liquidity~~ Congressional Research Service 56 link to page 61 link to page 61 Global Economic Effects of COVID-19 with the G-20 agreement on debt relief for low-income countries (see “Looming Debt Crises and Debt Relief Efforts”). Meanwhile, international organizations including the IMF and multilateral development banks, have tried to forge ahead with economic support given their current resources. Additionally, the Financial Stability Board (FSB), an international body including the United States that monitors the global financial system and makes regulations to ensure stability, released a statement on March 20, 2020 that its members are actively cooperating to maintain financial stability during market stress related to COVID-19.250 The FSB is encouraging governments to use flexibility within existing international standards to provide continued access to funding for market participants and for businesses and households facing temporary difficulties from COVID-19, while noting that many FSB members have already taken action to release available capital and liquidity buffers. buffers.
Looming Debt Crises and Debt Relief Efforts
COVID-19 could trigger a wave of defaults around the world.COVID-19 could trigger a wave of defaults around the world.~~217~~251 In Q3 2019—before the In Q3 2019—before the
outbreak of COVID-19—global debt levels reached an outbreak of COVID-19—global debt levels reached an al all-time high of nearly $253 -time high of nearly $253 ~~tril ion~~trillion, about , about
320% of global GDP.320% of global GDP.~~218~~252 About 70% of global debt is held by advanced economies and about 30% About 70% of global debt is held by advanced economies and about 30%
is held by emerging markets. is held by emerging markets. ~~Global y~~Globally, most debt is held by nonfinancial corporations (29%), , most debt is held by nonfinancial corporations (29%),
governments (27%) and financial corporations (24%), followed by households (19%). Debt in governments (27%) and financial corporations (24%), followed by households (19%). Debt in
emerging markets has nearly doubled since 2010, primarily driven by borrowing from state-emerging markets has nearly doubled since 2010, primarily driven by borrowing from state-
owned enterprises. owned enterprises.
High debt levels make borrowers vulnerable to shocks that disrupt revenue and inflows of new High debt levels make borrowers vulnerable to shocks that disrupt revenue and inflows of new
financing. The disruption in economic activity associated with COVID-19 is a wide-scale financing. The disruption in economic activity associated with COVID-19 is a wide-scale
exogenous shock that exogenous shock that ~~wil~~ will make it significantly more difficult for many private borrowers make it significantly more difficult for many private borrowers
(corporations and households) and public borrowers (governments) around the world to repay (corporations and households) and public borrowers (governments) around the world to repay
their debts. COVID-19 has hit the revenue of corporations in a range of industries: factories are their debts. COVID-19 has hit the revenue of corporations in a range of industries: factories are
ceasing production, brick-and-mortar retail stores and restaurants are closing, commodity prices ceasing production, brick-and-mortar retail stores and restaurants are closing, commodity prices
have plunged (Bloomberg commodity price index—a basket of oil, metals, and food prices—has have plunged (Bloomberg commodity price index—a basket of oil, metals, and food prices—has
dropped 27% since the start of the year and is now at its lowest level since 1986), and overseas dropped 27% since the start of the year and is now at its lowest level since 1986), and overseas
and in some cases domestic travel is being curtailed.and in some cases domestic travel is being curtailed.~~219~~253 Some governments, including Argentina Some governments, including Argentina
and Lebanon, were already experiencing debt pressures, which have been exacerbated by the and Lebanon, were already experiencing debt pressures, which have been exacerbated by the
pandemic. Other countries are facing new debt pressures created by the pandemic, while some pandemic. Other countries are facing new debt pressures created by the pandemic, while some
countries, such as Abu Dhabi and Egypt, have completed successful sovereign bond sales since countries, such as Abu Dhabi and Egypt, have completed successful sovereign bond sales since
the outbreak of the pandemic.the outbreak of the pandemic.~~220~~254
Households are facing a rapid increase in unemployment and, in many developing countries, a Households are facing a rapid increase in unemployment and, in many developing countries, a
decline in remittances. With fewer resources, corporations and households may default on their decline in remittances. With fewer resources, corporations and households may default on their
debts, absent government intervention. These defaults debts, absent government intervention. These defaults ~~wil~~ will result in a decline in bank assets, result in a decline in bank assets,
making it difficult for banks to extend new loans during the crisis or, more severely, creating making it difficult for banks to extend new loans during the crisis or, more severely, creating
250 “FSB Coordinates Financial Sector Work to Buttress the Economy in Response to Covid-19,” Financial Stability Board, Press Release 6/2020, March 20, 2020. 251 John Plender, “The Seeds of the Next Debt Crisis,” Financial Times, March 4, 2020. 252 Emre Tiftik, Khadija Mahmood, Jadranka Poljak, and Sonja Gibbs, “Global Debt Monitor: Sustainability Matters,” Institute for International Finance, January 13, 2020.This includes debt held by governments, financial institutions, nonfinancial institutions, and households. 253 “Covid-19 Worsens Debt Crisis in Poor Countries,” Jubilee Debt Campaign, March 22, 2020. 254 Trieu Pham, “EM Sovereign Debt Issuance: Encouraging Signs but Not Yet Back to Business as Usual,” ING, May 26, 2020. Congressional Research Service 57 Global Economic Effects of COVID-19 solvency problems for banks. Meanwhile, many governments are dramatically ~~solvency problems for banks. Meanwhile, many governments are dramatical y~~ increasing increasing
spending to combat the pandemic, and are likely to face sharp reductions in revenue, putting spending to combat the pandemic, and are likely to face sharp reductions in revenue, putting
pressure on public finances and raising the likelihoodpressure on public finances and raising the likelihood of sovereign (government) defaults. Debt of sovereign (government) defaults. Debt
dynamics are particularly problematic in emerging economies, where debt obligations dynamics are particularly problematic in emerging economies, where debt obligations
denominated in foreign currencies (denominated in foreign currencies (~~usual y~~usually U.S. dollars). Many emerging market currencies have U.S. dollars). Many emerging market currencies have
depreciated since the outbreak of the pandemic, raising the value of their debts in terms of local depreciated since the outbreak of the pandemic, raising the value of their debts in terms of local
currency. currency.
Governments Governments ~~wil~~ will face difficult choices if there is a widespread wave of defaults. Most face difficult choices if there is a widespread wave of defaults. Most
governments have signaled a commitment to or already implemented policies to support those governments have signaled a commitment to or already implemented policies to support those
~~economical y~~economically impacted by the pandemic. These governments face decisions about the type of impacted by the pandemic. These governments face decisions about the type of
assistance to provide (loans versus direct payments), the amount of assistance to provide, how to assistance to provide (loans versus direct payments), the amount of assistance to provide, how to

~~217 John Plender, “T he Seeds of the Next Debt Crisis,” Financial Times, March 4, 2020.~~
~~218 Emre T iftik, Khadija Mahmood, Jadranka Poljak, and Sonja Gibbs, “Global Debt Monitor: Sustainability Matters,”~~
~~Institute for International Finance, January 13, 202 0.This includes debt held by governments, financial institutions,~~
~~nonfinancial institutions, and households.~~
~~219 “Covid-19 Worsens Debt Crisis in Poor Countries,” Jubilee Debt Campaign, March 22, 2020.~~
~~220 T rieu Pham, “EM Sovereign Debt Issuance: Encouraging Signs but Not Yet Back to Business as Usual,” ING, May~~
~~26, 2020.~~
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51

~~Global Economic Effects of COVID-19~~

~~al ocate~~allocate rescue funds, and what conditions if any to attach to funds. Governments have rescue funds, and what conditions if any to attach to funds. Governments have
undertaken extraordinary fiscal and monetary measures to combat the crisis. However, undertaken extraordinary fiscal and monetary measures to combat the crisis. However,
developing countries that are constrained by limited financial resources and where health systems developing countries that are constrained by limited financial resources and where health systems
could quickly become overloaded are particularly vulnerable. could quickly become overloaded are particularly vulnerable.
In terms of defaults by governments (sovereign defaults), emergency assistance is In terms of defaults by governments (sovereign defaults), emergency assistance is ~~general y~~generally
provided by the IMF, and sometimes paired with additional rescue funds from other governments provided by the IMF, and sometimes paired with additional rescue funds from other governments
on a bilateral basis. The IMF and other potential donor countries on a bilateral basis. The IMF and other potential donor countries ~~wil~~ will need to consider whether need to consider whether
the IMF has adequate resources to respond to the crisis, how to the IMF has adequate resources to respond to the crisis, how to ~~al ocate~~allocate funding if the demand for funding if the demand for
funding exceeds the amount available, what conditions should be attached to rescue funding, and funding exceeds the amount available, what conditions should be attached to rescue funding, and
whether IMF programs should be paired with a restructuring of the government’s debt (“burden whether IMF programs should be paired with a restructuring of the government’s debt (“burden
sharing” with private investors). sharing” with private investors).
International efforts are underway to help the most vulnerable developing countries grapple with International efforts are underway to help the most vulnerable developing countries grapple with
debt pressures. In mid-April 2020, the IMF tapped its Catastrophe Containment and Relief Trust debt pressures. In mid-April 2020, the IMF tapped its Catastrophe Containment and Relief Trust
(CRRT), funded by donor countries, to provide grants to cover the debt payments of 25 poor and (CRRT), funded by donor countries, to provide grants to cover the debt payments of 25 poor and
vulnerable countries to the IMF for six months. The IMF hopes that additional donor vulnerable countries to the IMF for six months. The IMF hopes that additional donor
contributions contributions ~~wil al ow~~will allow this debt service relief to be extended for two years. this debt service relief to be extended for two years. ~~Additional y~~Additionally, the G-, the G-
20 finance ministers agreed to suspend debt service payments for the world’s poorest countries 20 finance ministers agreed to suspend debt service payments for the world’s poorest countries
through the end of 2020. The Institute for International Finance (IIF), which represents 450 through the end of 2020. The Institute for International Finance (IIF), which represents 450
banks, hedge funds, and other global financial funds, also announced that private creditors banks, hedge funds, and other global financial funds, also announced that private creditors ~~wil~~
will join the debt relief effort on a voluntary basis. This debt join the debt relief effort on a voluntary basis. This debt ~~standstil wil~~ standstill will free up more than $20 free up more than $20
~~bil ion~~ billion for these countries to spend on improving their health systems and fighting the for these countries to spend on improving their health systems and fighting the
pandemic.pandemic.~~221~~255 Private sector commitments were critical for official creditors, so that developing Private sector commitments were critical for official creditors, so that developing
countries could redirect funds to improving health systems rather than repaying private creditors. countries could redirect funds to improving health systems rather than repaying private creditors.
However, the debt However, the debt ~~standstil~~ standstill is complicated. There is debate among creditor governments about is complicated. There is debate among creditor governments about
what debts should be included in the what debts should be included in the ~~standstil~~ standstill, and how it can be enforced. On May 1, the IIF in a , and how it can be enforced. On May 1, the IIF in a
letter laid out some of the obstacles facing private sector participation in the debt letter laid out some of the obstacles facing private sector participation in the debt ~~stil~~ still, including , including
reliance on “voluntary” participation, each participating creditor reliance on “voluntary” participation, each participating creditor ~~wil~~ will need to make its own need to make its own
assessments, the assessments, the ~~standstil~~ standstill could require a lengthy contract-by-contract approach, and the could require a lengthy contract-by-contract approach, and the
participating borrowing countries may face risks, such as rating downgrades and inability to participating borrowing countries may face risks, such as rating downgrades and inability to
borrow from financial markets (often referred to as “loss of market access”). Some economists borrow from financial markets (often referred to as “loss of market access”). Some economists
have characterized the letter as a list of reasons private creditors may cite as justification for their have characterized the letter as a list of reasons private creditors may cite as justification for their
refusal to participate in the debt refusal to participate in the debt ~~standstil .222~~standstill.256 Reportedly, some African countries are opting to 255 Davide Barbuscia, Marwa Rashad, and Andrea Shalal, “G20 Countries Agree Debt Freeze for World’s Poorest Countries,” Reuters, April 15, 2020 256 Patrick Bolton, Lee Buchheit, Pierre-Olivier Gourinchas, et. al, “Sovereign Debt Standstills: An Update” VoxEU, Congressional Research Service 58 Global Economic Effects of COVID-19 ~~Reportedly, some African countries are opting to~~
negotiate debt relief negotiate debt relief ~~individual y~~ individually with China and other creditor nations because of concerns they with China and other creditor nations because of concerns they
~~wil~~ will be blocked from financial markets if they participate in the G-20 debt be blocked from financial markets if they participate in the G-20 debt ~~standstil .223~~standstill.257
Other Affected Sectors
Public concerns over the spread of the virus have led to self-quarantines, reductions in airline and Public concerns over the spread of the virus have led to self-quarantines, reductions in airline and
cruise liner travel, the closing of such institutions as the Louvre, and the rescheduling of theatrical cruise liner travel, the closing of such institutions as the Louvre, and the rescheduling of theatrical
releases of movies, including the sequel in the iconic James Bond series (titled, “No Time to releases of movies, including the sequel in the iconic James Bond series (titled, “No Time to

~~221 Davide Barbuscia, Marwa Rashad, and Andrea Shalal, “G20 Countries Agree Debt Freeze for World’s Poorest~~
~~Countries,” Reuters, April 15, 2020~~
~~222 Patrick Bolton, Lee Buchheit, Pierre-Olivier Gourinchas, et. al, “Sovereign Debt Standstills: An Update” VoxEU,~~
~~May 28, 2020.~~
~~223 Jevans Nyabiage, “All Eyes on China as Africa Spurns G20 Debt Relief Plan,” South China Morning Post, May 26,~~
~~2020.~~
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~~Global Economic Effects of COVID-19~~

~~Die”).224~~Die”).258 School closures are affecting 1.5 School closures are affecting 1.5 ~~bil ion~~billion children worldwide, children worldwide, ~~chal enging~~challenging parental leave parental leave
policies.policies.~~225~~259 Other countries are limiting the size of public gatherings. Other countries are limiting the size of public gatherings.
Some businesses are considering new approaches to managing their workforces and work Some businesses are considering new approaches to managing their workforces and work
methods. These techniques build on, or in some places replace, such standard techniques as self-methods. These techniques build on, or in some places replace, such standard techniques as self-
quarantines and travel bans. Some firms are adopting an open-leave policy to ensure employees quarantines and travel bans. Some firms are adopting an open-leave policy to ensure employees
receive sick pay if they are, or suspect they are, infected. Other firms are adopting paid sick leave receive sick pay if they are, or suspect they are, infected. Other firms are adopting paid sick leave
policies to encourage sick employees to stay home and are adopting remote working policies.policies to encourage sick employees to stay home and are adopting remote working policies.~~226~~260
Microsoft and Amazon have instructed Microsoft and Amazon have instructed al all of their Seattle-based employees to work from home of their Seattle-based employees to work from home
until the end of March 2020.until the end of March 2020.~~227~~261
The drop in business and tourist travel The drop in business and tourist travel ~~is causing~~has caused a sharp drop in scheduled airline flights by as a sharp drop in scheduled airline flights by as
much as 10%; airlines are estimating they could lose $113 much as 10%; airlines are estimating they could lose $113 ~~bil ion~~ billion in 2020 (an estimate that could in 2020 (an estimate that could
prove optimistic given the Trump Administration’s announced restrictions on flights from Europe prove optimistic given the Trump Administration’s announced restrictions on flights from Europe
to the United States and the growing list of countries that are similarly restricting flights),to the United States and the growing list of countries that are similarly restricting flights),~~228~~262 while while
airports in Europe estimate they could lose $4.3 airports in Europe estimate they could lose $4.3 ~~bil ion~~billion in revenue due to fewer flights. in revenue due to fewer flights.~~229~~263 Industry Industry
experts estimate that many airlines experts estimate that many airlines ~~wil~~ will be in bankruptcy by May 2020 under current conditions be in bankruptcy by May 2020 under current conditions
as a result of travel restrictions imposed by a growing number of countries.as a result of travel restrictions imposed by a growing number of countries.~~230~~264 The loss of Chinese The loss of Chinese
tourists is another economic blow to countries in Asia and elsewhere that have benefitted from the tourists is another economic blow to countries in Asia and elsewhere that have benefitted from the
~~growing market for Chinese tourists and the stimulus such tourism has provided.~~
~~The decline in industrial activity has reduced demand for energy products such as crude oil,~~
~~causing prices to drop sharply, which negatively affects energy producers, renewable energy~~
~~producers, and electric vehicle manufacturers, but general y is positive for consumers and~~
~~businesses. Saudi Arabia is pushing other OPEC (Organization of the Petroleum Exporting~~
~~Countries) members collectively to reduce output by 1.5 mil ion barrels a day to raise market~~
~~prices. U.S. shale oil producers, who are not represented by OPEC, support the move to raise~~
~~prices.231 An unwil ingness by Russia to agree to output reductions added to other downward~~
~~pressures on oil prices and caused Saudi Arabia to engage in a price war with Russia that has~~
~~driven oil prices below $25 per barrel at times, half the estimated $50 per barrel break-even point~~

~~224 Rosenberg,~~ growing market for Chinese tourists and the stimulus such tourism has provided. May 28, 2020. 257 Jevans Nyabiage, “All Eyes on China as Africa Spurns G20 Debt Relief Plan,” South China Morning Post, May 26, 2020. 258 Rosenberg, Alyssa, “Covid-19 Shut Down Mona Lisa and James Bond. We Can’t Let it Isolate Us,” Alyssa, “Covid-19 Shut Down Mona Lisa and James Bond. We Can’t Let it Isolate Us,” Washington
Post, March 4, 2020. https://www.washingtonpost.com/opinions/2020/03/04/Covid-19-shut-down-mona-lisa-james- March 4, 2020. https://www.washingtonpost.com/opinions/2020/03/04/Covid-19-shut-down-mona-lisa-james-
bond-we-cantbond-we-cant -let-it-isolate-us/. -let-it-isolate-us/.
~~225 T aylor~~ 259 Taylor, Adam, , Adam, ~~T eo~~Teo Armus, Rick Noak, “Covid-19 Armus, Rick Noak, “Covid-19 ~~T urmoil~~Turmoil Widens as U.S. Widens as U.S. Death Death ~~T oll~~Toll Mounts; Xi Cancels Japan Mounts; Xi Cancels Japan
~~T rip~~Trip,” ,” Washington Post, March 5, 2020; Strauss, Valerie,, March 5, 2020; Strauss, Valerie, “ “1.5 Billion Children Around Globe1.5 Billion Children Around Globe Affected by School Affected by School
Closure.Closure. What Countries Are Doing to Keep KidsWhat Countries Are Doing to Keep Kids Learning During Pandemic,” Learning During Pandemic,” Washington Post, March 27, 2020. , March 27, 2020.
https://www.washingtonpost.com/education/2020/03/26/nearly-14-billion-children-around-globe-are-out-school-heres-https://www.washingtonpost.com/education/2020/03/26/nearly-14-billion-children-around-globe-are-out-school-heres-
whatwhat -countries-are-doing-keep-kids-learning-during-pandemic/. -countries-are-doing-keep-kids-learning-during-pandemic/.
~~226~~260 Hill, Andrew Hill, Andrew and Emma Jacobs,and Emma Jacobs, “Covid-19 May Create Lasting Workplace Change,” “Covid-19 May Create Lasting Workplace Change,” Financial Times, February 27, , February 27,
2020. https://www.ft.com/content/5801a710-597c-11ea-abe5-8e03987b7b20. 2020. https://www.ft.com/content/5801a710-597c-11ea-abe5-8e03987b7b20.
~~227~~ 261 Armus, Armus, ~~T eo, “~~ Teo, “Live Updates: Covid-19 Live Updates: Covid-19 ~~T urmoil~~Turmoil Widens as U.S. Widens as U.S. Death Death ~~T oll~~Toll Mounts; Xi Cancels Mounts; Xi Cancels Japan Japan ~~T rip~~Trip,”,”
Washington Post, March 5, 2020, https://www.washingtonpost.com/world/2020/03/05/Covid-19-live-updates/. , March 5, 2020, https://www.washingtonpost.com/world/2020/03/05/Covid-19-live-updates/.
~~228 T aylor~~262 Taylor, Adam, “Airlines Could, Adam, “Airlines Could ~~Suffer~~ Suffer up to $113 Billion in Lost Revenue Dueup to $113 Billion in Lost Revenue Due to Covid-19 Crisis,to Covid-19 Crisis, ~~IAT A~~ IATA Says,” Says,”
Washington Post, March 5, 2020. https://www.washingtonpost.com/world/2020/03/05/Covid-19-live-updates/. , March 5, 2020. https://www.washingtonpost.com/world/2020/03/05/Covid-19-live-updates/.
~~229~~ 263 “Airlines Slash “Airlines Slash Flights to Cut Costs as Covid-19 Hits Flights to Cut Costs as Covid-19 Hits ~~T ravel~~Travel Demand,” Demand,” Financial Times. https://www.ft.com/. https://www.ft.com/
content/c28b5790-62c6-11ea-a6cd-df28cc3c6a68. content/c28b5790-62c6-11ea-a6cd-df28cc3c6a68.
~~230~~264 Smyth, Jamie Smyth, Andrew Smyth, Jamie Smyth, Andrew Edgecliffe-Johnson, Peggy Hollinger, Myles McCormick, David Keohane, and Edgecliffe-Johnson, Peggy Hollinger, Myles McCormick, David Keohane, and
Richard Milne, “Richard Milne, “ Most Airlines Face Bankruptcy by End of May, Industry Body Warns,Most Airlines Face Bankruptcy by End of May, Industry Body Warns, ” ” Financial ~~Tim es~~Times, March 16, 2020. Congressional Research Service 59 Global Economic Effects of COVID-19 The decline in industrial activity has reduced demand for energy products such as crude oil, causing prices to drop sharply, which negatively affects energy producers, renewable energy producers, and electric vehicle manufacturers, but generally is positive for consumers and businesses. Saudi Arabia is pushing other OPEC (Organization of the Petroleum Exporting Countries) members collectively to reduce output by 1.5 million barrels a day to raise market prices. U.S. shale oil producers, who are not represented by OPEC, support the move to raise prices.265 An unwillingness by Russia to agree to output reductions added to other downward pressures on oil prices and caused Saudi Arabia to engage in a price war with Russia that drove oil prices below $25 per barrel at times, half the estimated $50 per barrel break-even point for most oil producing countries.266 Rising oil supplies and falling demand combined to , ~~March 16,~~
~~2020.~~
~~231 Brower, Derek, “ Cash-Strapped US Shale Producers Pray for OPEC Aid,” Financial Times, March 3, 2020.~~
~~https://www.ft.com/content/9161e62c-5cb1-11ea-b0ab-339c2307bcd4.~~
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53

~~Global Economic Effects of COVID-19~~

~~for most oil producing countries.232 Rising oil supplies and fal ing demand are combining to~~
create an estimated surplus of 25 create an estimated surplus of 25 ~~mil ion~~million barrels a day and barrels a day and ~~could soon overwhelm~~overwhelmed storage storage
capacity capacity ~~and chal enge~~at times and challenged the viability the viability of U.S. shale oil production.of U.S. shale oil production.~~233~~267 In 2019, low energy prices In 2019, low energy prices
combined with high debt levels reportedly caused U.S. energy producers to reduce their spending combined with high debt levels reportedly caused U.S. energy producers to reduce their spending
on capital equipment, reduced their profits and, in some cases, led to bankruptcies.on capital equipment, reduced their profits and, in some cases, led to bankruptcies.~~234~~268 Reportedly, Reportedly,
in late 2019 and early 2020, bond and equity investors, as in late 2019 and early 2020, bond and equity investors, as ~~wel~~ well as banks, reduced their lending to as banks, reduced their lending to
shale oil producers and other energy producers that shale oil producers and other energy producers that ~~typical y~~typically use oil and gas reserves as use oil and gas reserves as
collateral.collateral.~~235~~269
Disruptions to industrial activity in China reportedly Disruptions to industrial activity in China reportedly ~~are causing~~caused delays in shipments of delays in shipments of
computers, computers, ~~cel~~ cell phones, toys, and medical equipment.phones, toys, and medical equipment.~~236~~270 Factory output in China, the United Factory output in China, the United
States, Japan, and South Korea States, Japan, and South Korea al all declined in the first months of 2020.declined in the first months of 2020.~~237~~271 Reduced Chinese Reduced Chinese
agricultural exports, including to Japan, are leading to shortages in some commodities. In agricultural exports, including to Japan, are leading to shortages in some commodities. In
addition, numerous auto producers addition, numerous auto producers ~~are facing~~have faced shortages in parts and other supplies that have been shortages in parts and other supplies that have been
sourced in China. Reductions in international trade have also affected ocean freight prices. Some sourced in China. Reductions in international trade have also affected ocean freight prices. Some
freight companies argue freight companies argue ~~that~~ they could be forced to shutter if prices they could be forced to shutter if prices dodid not rebound quickly. not rebound quickly.~~238~~
272 Disruptions in the movements of goods and people reportedly Disruptions in the movements of goods and people reportedly ~~are causing~~caused some companies to some companies to
reassess how international they want their supply chains to be.reassess how international they want their supply chains to be.~~239~~273 According to some estimates, According to some estimates,
nearly every member of the Fortune 1000 nearly every member of the Fortune 1000 ~~is being~~has been affected by disruptions in production in affected by disruptions in production in
China.China.~~240~~
~~Conclusions~~
~~The quickly evolving nature of the COVID-19 crisis creates a number of issues that make it~~
~~difficult to estimate the full cost to global economic activity. These issues include, but are not~~
~~limited to:~~
~~ How long wil the crisis last?~~
~~ How many workers wil be affected both temporarily and permanently?~~

~~232 Strauss, Delphine, “Why T here Are No Winners from the Oil Price Plunge T his T ime~~274 265 Brower, Derek, “Cash-Strapped US Shale Producers Pray for OPEC Aid,” Financial Times, March 3, 2020. https://www.ft.com/content/9161e62c-5cb1-11ea-b0ab-339c2307bcd4. 266 Strauss, Delphine, “Why There Are No Winners from the Oil Price Plunge This Time,” ,” Financial Times, March 10, March 10,
2020. https://www.ft.com/content/da2b0700-622c-11ea-b3f3-fe4680ea68b5; Mufson, Steve and Will Englund,2020. https://www.ft.com/content/da2b0700-622c-11ea-b3f3-fe4680ea68b5; Mufson, Steve and Will Englund, “ “Oil Oil
Price War Price War ~~T hreatens~~Threatens Widespread Collateral Damage,” Widespread Collateral Damage,” Washington Post, March 10, 2020. , March 10, 2020.
https://www.washingtonpost.com/climate-environment/oil-price-war-threatens-widespread-collateral-damage/2020/03/https://www.washingtonpost.com/climate-environment/oil-price-war-threatens-widespread-collateral-damage/2020/03/
09/3e42c9e2-6207-11ea-acca-80c22bbee96f_story.html. 09/3e42c9e2-6207-11ea-acca-80c22bbee96f_story.html.
~~233~~267 Sheppard, David and Derek Brower, “U.S. Crude Sheppard, David and Derek Brower, “U.S. Crude Oil Price Drops BelowOil Price Drops Below $20,” $20,” Financial Times, March 29, 2020. , March 29, 2020.
https://www.ft.com/content/bc938195-82d3-43eb-b031-740028451382. https://www.ft.com/content/bc938195-82d3-43eb-b031-740028451382.
~~234 “T exas~~268 “Texas Oil Groups: Oil Groups: Panhandling Ahead,” Panhandling Ahead,” The Financial Times, January 20, 2020. , January 20, 2020.
~~235~~269 Ibid. Ibid.
~~236~~270 Hille, Kathrin, Alistair Gray, and Patrick McGee, “Covid-19 Delays PC and Smartphone Shipments for Weeks,” Hille, Kathrin, Alistair Gray, and Patrick McGee, “Covid-19 Delays PC and Smartphone Shipments for Weeks,”
Financial ~~Tim es~~Times, March3, 2020. https://www.ft.com/content/72742872-5c31-11ea-b0ab-339c2307bcd4. March3, 2020. https://www.ft.com/content/72742872-5c31-11ea-b0ab-339c2307bcd4.
~~237~~271 Newmyer, Newmyer, ~~T ory, “~~ Tory, “The Finance 202: Stocks Stage Major Comeback, butThe Finance 202: Stocks Stage Major Comeback, but Manufacturing Report Points to Continued Manufacturing Report Points to Continued
Covid-19 Pain,” Covid-19 Pain,” Washington Post, March 3, 2020. https://www.washingtonpost.com/news/powerpost/paloma/the-, March 3, 2020. https://www.washingtonpost.com/news/powerpost/paloma/the-
finance-202/2020/03/03/the-finance-202-stocks-stage-major-comeback-but-manufacturing-reportfinance-202/2020/03/03/the-finance-202-stocks-stage-major-comeback-but-manufacturing-report -points-to-continued--points-to-continued-
Covid-19-pain/5e5d84a6602ff10d49ac081f/?itid=hp_hp-cards_hp-card-politics%3Ahomepage%2Fcard-ans. Covid-19-pain/5e5d84a6602ff10d49ac081f/?itid=hp_hp-cards_hp-card-politics%3Ahomepage%2Fcard-ans.
~~238~~272 Lynch, David J., “ Lynch, David J., “ Economic Fallout from China’s Covid-19 Mounts AroundEconomic Fallout from China’s Covid-19 Mounts Around the World,” the World,” Washington Post,
February 13, 2020. https://www.washingtonpost.com/business/economy/economic-falloutFebruary 13, 2020. https://www.washingtonpost.com/business/economy/economic-fallout -from-chinas-Covid-19--from-chinas-Covid-19-
mounts-across-the-globe/2020/02/13/7bb69a12-4e8c-11ea-9b5c-eac5b16dafaa_story.html?itid=lk_inline_manual_12 mounts-across-the-globe/2020/02/13/7bb69a12-4e8c-11ea-9b5c-eac5b16dafaa_story.html?itid=lk_inline_manual_12
~~239~~273 Ibid. Ibid.
~~240~~274 Ibid. Ibid.
Congressional Research Service Congressional Research Service

5460 Global Economic Effects of COVID-19 Conclusions The quickly evolving nature of the COVID-19 crisis creates a number of issues that make it difficult to estimate the full cost to global economic activity. These issues include, but are not limited to:  How long will the crisis last?  How many workers will be affected both temporarily and permanently?

~~Global Economic Effects of COVID-19~~

 How many countries  How many countries ~~wil~~ will be infected and how much economic activity be infected and how much economic activity ~~wil~~ will be be
reduced? reduced?
 When  When ~~wil~~ will the economic effects peak? the economic effects peak?
 How much economic activity  How much economic activity ~~wil~~ will be lost as a result of the viral outbreak? be lost as a result of the viral outbreak?
 What are the most effective monetary and fiscal policies at the national and  What are the most effective monetary and fiscal policies at the national and
global level to address the crisis? global level to address the crisis?
 What temporary and permanent effects  What temporary and permanent effects ~~wil~~ will the crisis have on how businesses the crisis have on how businesses
organize their work forces? organize their work forces?
 Many of the public health measures taken by countries such as Italy, Taiwan,  Many of the public health measures taken by countries such as Italy, Taiwan,
South Korea, Hong Kong, and China have sharply impacted their economies South Korea, Hong Kong, and China have sharply impacted their economies
(with plant closures, travel restrictions, and so forth). How are the tradeoffs (with plant closures, travel restrictions, and so forth). How are the tradeoffs
between public health and the economic impact of policies to contain the spread between public health and the economic impact of policies to contain the spread
of the virus being weighed? of the virus being weighed?
Congressional Research Service Congressional Research Service

5561

Global Economic Effects of COVID-19

Appendix. Table A-1. Select Measures Implemented
and Announced by Major Economies in Response to
COVID-19
United States
U.S. Federal Reserve
March 3: Cut the target range for the federal funds rate by 0.5 percentage point. Cut the target range for the federal funds rate by 0.5 percentage point.
March 12: Expanded reverseExpanded reverse repo operations,repo operations, adding $1.5 tril ionadding $1.5 tril ion of liquidity to the of liquidity to the
banking system. banking system.
March 15: Cut the target range for the federal funds rate by a ful percentage point Cut the target range for the federal funds rate by a ful percentage point
to a range of 0.00% to 0.25% and restarted quantitative easing with the purchase of at to a range of 0.00% to 0.25% and restarted quantitative easing with the purchase of at
least $500 bil ion in Treasury securitiesleast $500 bil ion in Treasury securities and $200 bil ionand $200 bil ion in mortgage-backed in mortgage-backed
securities. securities.
March 16: Increased reverse Increased reverse repo operations by another $500 bil ion. repo operations by another $500 bil ion.
March 17: U.S. Treasury Secretary Mnuchin approved the Federal U.S. Treasury Secretary Mnuchin approved the Federal Reserve’sReserve’s creation creation
of a “Commercialof a “Commercial Paper Funding Facility,"Paper Funding Facility," (CPFF) through March 17, 2021, which wil (CPFF) through March 17, 2021, which wil
~~al ows~~allows the Fed to create a corporation which can purchase commercial the Fed to create a corporation which can purchase commercial paper, short-paper, short-
term,term, unsecured loans made by businessesunsecured loans made by businesses for everyday expenses and authorized up for everyday expenses and authorized up
to $10 bil ion from the Treasury to help cover loan lossesto $10 bil ion from the Treasury to help cover loan losses incurred under this incurred under this
program.program.
March 17: Relaunched the Primary Relaunched the Primary ~~Dealer~~ Dealer Credit Facility (PDCF) for at least six Credit Facility (PDCF) for at least six
months. Starting March 20, the PDCF wil offer short-termmonths. Starting March 20, the PDCF wil offer short-term loans to banks secured by loans to banks secured by
col ateralcol ateral such as municipal bonds or investment-grade corporate debt. such as municipal bonds or investment-grade corporate debt.
March 18: Launched the Money Market Mutual Fund Liquidity Facility (MMLF) Launched the Money Market Mutual Fund Liquidity Facility (MMLF)
through the end of September,through the end of September, a new program to lend money to banks so they can a new program to lend money to banks so they can
purchase assets from money marketpurchase assets from money market funds. Treasury is offering up to $10 bil ion to funds. Treasury is offering up to $10 bil ion to
cover loan lossescover loan losses the Fed incurs fromthe Fed incurs from the program. the program.
March 23: Announced a series Announced a series of measuresof measures designed to stabilize markets,designed to stabilize markets, enhance enhance
liquidity and stimulate growth. The measuresliquidity and stimulate growth. The measures included the rolincluded the rol out of 2 new facilities, out of 2 new facilities,
the Primarythe Primary Market Corporate Credit Facility (PMCCF) for new bond and loan Market Corporate Credit Facility (PMCCF) for new bond and loan
issuance and the Secondary Market Corporate Credit Facility (SMCCF) to provide issuance and the Secondary Market Corporate Credit Facility (SMCCF) to provide
liquidity for outstanding corporate bonds. The FOMC removedliquidity for outstanding corporate bonds. The FOMC removed its caps on planned its caps on planned
QE purchases and wil now purchase TreasuriesQE purchases and wil now purchase Treasuries and agency mortgage-backed and agency mortgage-backed
securitiessecurities “in the amounts needed to support smooth market“in the amounts needed to support smooth market functioning and functioning and
effective transmissioneffective transmission of monetary policy to broader financial conditions and the of monetary policy to broader financial conditions and the
economy.” economy.”

U.S. Congress
March 5: Passed, and the President signed, a bil Passed, and the President signed, a bil providing $8.3 bil ionproviding $8.3 bil ion in emergency in emergency
funding for federalfunding for federal agencies to respond to the COVID-19 outbreak (H.R. 6074: agencies to respond to the COVID-19 outbreak (H.R. 6074:
COVID-19 PreparednessCOVID-19 Preparedness and Response Supplemental Appropriationsand Response Supplemental Appropriations Act 2020). Act 2020).
March 13: The House of Representatives passed a COVID-19 response package The House of Representatives passed a COVID-19 response package
(H.R. 6201; P.L. 116-127, Families(H.R. 6201; P.L. 116-127, Families ~~First~~ First COVID-19 Response Act); measureCOVID-19 Response Act); measure was was
signed by President Trump on March 18, 2020. The measuresigned by President Trump on March 18, 2020. The measure appropriates about $100 appropriates about $100
bil ion and includes tax credits for employersbil ion and includes tax credits for employers offering paid sick leave and increasesoffering paid sick leave and increases to to
unemployment benefits and food assistance. unemployment benefits and food assistance.
March 19: The Senate introduced the COVID-19 Aid, Relief,: The Senate introduced the COVID-19 Aid, Relief, and Economic Security and Economic Security
Act (S. 3548) to provide $2.0 tril ionAct (S. 3548) to provide $2.0 tril ion in assistance to businessesin assistance to businesses and workers. and workers.
March 27: Passed, and the President signed, the COVID-19 Aid, Relief, Passed, and the President signed, the COVID-19 Aid, Relief, and and
Economic Security Act (CARES Act, H.R.Economic Security Act (CARES Act, H.R. 748, P.L. 116-136), a $2.1 tril ion748, P.L. 116-136), a $2.1 tril ion fiscal fiscal
stimulus package. It includes $454 bil ionstimulus package. It includes $454 bil ion in loans for businesses,in loans for businesses, $349 bil ion$349 bil ion in loans in loans
for for ~~smal~~ small businesses,businesses, $300 bil ion for direct payments of $1,200 each for lower- and $300 bil ion for direct payments of $1,200 each for lower- and
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middle-income middle-income individual taxpayers (and $500 for each child), $250 bil ion for individual taxpayers (and $500 for each child), $250 bil ion for
unemployment insurance, and $221 bil ionunemployment insurance, and $221 bil ion in tax deferrals,in tax deferrals, among other measures.among other measures.
March 30: Some Members Some Members of the House of Representativesof the House of Representatives announced they had announced they had
begun work on a fourth COVID-19 bil targeting a number of issues,begun work on a fourth COVID-19 bil targeting a number of issues, including short including short
supplies of medicalsupplies of medical equipment and protective gear to enhance workerequipment and protective gear to enhance worker protections, protections,
infrastructure needs, and additional payments to individuals. infrastructure needs, and additional payments to individuals.

Trump Administration
March 13: President Trump declared a state of emergency, President Trump declared a state of emergency, ~~al owing~~ allowing the Federal the Federal
Government to distribute up to $50 bil ionGovernment to distribute up to $50 bil ion in aid to states, cities,in aid to states, cities, and territories. and territories.
March 17: The Internal Revenue Service The Internal Revenue Service postponed the Aprilpostponed the April 15 tax-payment 15 tax-payment
deadline for 90 days and wildeadline for 90 days and wil waive interestwaive interest and penalties. (The extension and waiver and penalties. (The extension and waiver
is available only to individuals and corporations that owe $1 mil ionis available only to individuals and corporations that owe $1 mil ion or $10 mil ionor $10 mil ion or or
less,less, respectively.) respectively.)
March 17: Administration Administration officials begin negotiations with Membersofficials begin negotiations with Members of Congress on of Congress on
a third stimulus package. a third stimulus package.
March 31: President Trump President Trump ~~cal s~~calls for $2 tril ion for $2 tril ion infrastructure spending, possibly as infrastructure spending, possibly as
part of fourth COVID-19 stimulus bil . part of fourth COVID-19 stimulus bil .
Albania
The Bank of Albania
March 25: Cut its benchmark interest rate to a record-low Cut its benchmark interest rate to a record-low 0.5% and its one-day 0.5% and its one-day
lending rate to 0.9% on to help lending in the economy affected by the COVID-19 lending rate to 0.9% on to help lending in the economy affected by the COVID-19
outbreak. It also announced that it would inject unlimited liquidity into the banking outbreak. It also announced that it would inject unlimited liquidity into the banking
sector,sector, ensure the normalensure the normal functioning of the electronicfunctioning of the electronic payments system,payments system, and that, and that,
together with the government,together with the government, it had agreed to postpone until the end of May it had agreed to postpone until the end of May al all loan loan
repayments by businesses and individuals facing difficulties due to the outbreak. repayments by businesses and individuals facing difficulties due to the outbreak.

Government of Albania
March 20: Passed measures Passed measures totaling $370 mil iontotaling $370 mil ion in its budget to soften the impact in its budget to soften the impact
from the COVID-19 crisis,from the COVID-19 crisis, including $25 mil ionincluding $25 mil ion for the health sector; guarantees for the health sector; guarantees
worth $100 mil ionworth $100 mil ion to companies unable to pay their employees;to companies unable to pay their employees; and $65 mil ionand $65 mil ion to to
help the needy, help the needy, ~~smal~~ small businesses,businesses, and those unable to work because of stay-at-home and those unable to work because of stay-at-home
orders.orders. It also announced that it would write off penalties on delayed electricityIt also announced that it would write off penalties on delayed electricity bil bil
payments worth somepayments worth some $150 mil ion,$150 mil ion, postpone taxes on company profits, and cut the postpone taxes on company profits, and cut the
wages of government ministerswages of government ministers and lawmakersand lawmakers by half for the duration of the crisis.by half for the duration of the crisis.
Argentina
Central Bank of Argentina
March 19: Indicated that it would lower Indicated that it would lower ~~reserve requirements~~ reserve requirements for banks that for banks that
extended special credit lines to extended special credit lines to ~~smal~~ small and medium-sizedand medium-sized ~~enterprises~~ enterprises at a maximum at a maximum
annual interest rate of 24% in a bid to offset the impact of COVID-19. annual interest rate of 24% in a bid to offset the impact of COVID-19.

Government of Argentina
March 19: Announced a fiscal stimulus package of 700 bil ion Announced a fiscal stimulus package of 700 bil ion pesos ($11.3 bil ion) to pesos ($11.3 bil ion) to
mitigate the impact of the COVID-19 and support the economy. The main measures mitigate the impact of the COVID-19 and support the economy. The main measures
include providing credit to productive activities (350 bil ion pesos),include providing credit to productive activities (350 bil ion pesos), increasing public increasing public
investments (100 bil ion pesos),investments (100 bil ion pesos), and waiving payrol taxes for firmsand waiving payrol taxes for firms affected by the affected by the
COVID-19. COVID-19.
Armenia
March 17: The Central Bank of Armenia The Central Bank of Armenia cut its key refinancing rate by 25 basis cut its key refinancing rate by 25 basis
points to 5.25% frompoints to 5.25% from 5.5% due to the effects of the COVID-19 outbreak on the 5.5% due to the effects of the COVID-19 outbreak on the
economy. economy.
Australia
Reserve Bank of Australia
March 3: Cut its benchmark interestCut its benchmark interest rate by 25 basis points to 0.5% due to the rate by 25 basis points to 0.5% due to the
significant effect of the COVID-19 outbreak on the Australian economy. significant effect of the COVID-19 outbreak on the Australian economy.
March 19: Cut its cash rate by 25 basis points to 0.25% and and introduced a series Cut its cash rate by 25 basis points to 0.25% and and introduced a series
of measures:of measures: (1) targeting the 3-year government bond yield at 0.25% via purchases in (1) targeting the 3-year government bond yield at 0.25% via purchases in
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the secondary market, the secondary market, (2) providing a three-year term funding facility to authorized (2) providing a three-year term funding facility to authorized
deposit-taking institutions worth at least AU$90 bil iondeposit-taking institutions worth at least AU$90 bil ion at a fixed rate of 0.25%, at a fixed rate of 0.25%,
aiming to support credit to aiming to support credit to ~~smal~~ small and medium-sizedand medium-sized enterprises,enterprises, (3) fixing the (3) fixing the
exchange settle balances at the central bank at 10 basis points. It wilexchange settle balances at the central bank at 10 basis points. It wil also continue to also continue to
provide liquidity by conducting one-month and three-month repo operations until provide liquidity by conducting one-month and three-month repo operations until
further notice. Longer-termfurther notice. Longer-term repo operations of six-month maturity or longer would repo operations of six-month maturity or longer would
be undertaken at least weekly.be undertaken at least weekly. The central bank also set out forward guidance, saying The central bank also set out forward guidance, saying
that it wilthat it wil not increase the cash rate until progressnot increase the cash rate until progress is made towards ful employment is made towards ful employment
and confident that inflation is sustainably within its target band. and confident that inflation is sustainably within its target band.
March 19: Through its daily money market Through its daily money market operation, it has injected cash into the operation, it has injected cash into the
banking systembanking system (through repurchasing agreements),(through repurchasing agreements), aiming to ease liquidity aiming to ease liquidity
constraints in the stressedconstraints in the stressed bond market:bond market: AU$12.7 bil ion (March 19), AU$10.7 bil ion AU$12.7 bil ion (March 19), AU$10.7 bil ion
(March 18), AU$8.8 (March 17), AU$5.9 bil ion(March 18), AU$8.8 (March 17), AU$5.9 bil ion (March 16), and AU$8.8 (March 13). (March 16), and AU$8.8 (March 13).

Government of Australia
March 12: Announced a AU$17.6 bil ion Announced a AU$17.6 bil ion ($11.4 bil ion) stimulus package that ($11.4 bil ion) stimulus package that
includes support for business investment, cash flow assistance for smallincludes support for business investment, cash flow assistance for small and medium and medium
sized business and employees,sized business and employees, and household stimulusand household stimulus payments. payments.
March 16: The Australian Securities The Australian Securities and Investments Commissionand Investments Commission ordered large ordered large
equity market participants to reduce their number of executed trades by 25% from equity market participants to reduce their number of executed trades by 25% from
the levelsthe levels executed on March 13, 2020, until further notice. executed on March 13, 2020, until further notice.
March 19: Announced that the Australian Office of Financial Management (AOFM) Announced that the Australian Office of Financial Management (AOFM)
wilwil be provided with an investment capacity of $15 bil ion to enable be provided with an investment capacity of $15 bil ion to enable ~~smal er~~ smaller lenders lenders
to continue supporting Australian consumersto continue supporting Australian consumers ~~and smal~~ and small businesses.businesses. (AOFM wil be (AOFM wil be
able to purchase residentialable to purchase residential mortgage backed securitiesmortgage backed securities and invest in a range of other and invest in a range of other
asset backed securitiesasset backed securities and warehouse facilitiesand warehouse facilities over the next 12 months.) over the next 12 months.)
March 22: Announced an additional AU$66.4 bil ion ($38.5 bil ion) fiscal package, Announced an additional AU$66.4 bil ion ($38.5 bil ion) fiscal package,
which extends income support measureswhich extends income support measures for existing welfarefor existing welfare and newly unemployed and newly unemployed
workers,workers, and boosted previously announced measuresand boosted previously announced measures for businesses such as cash for businesses such as cash
flow and wage subsidies.flow and wage subsidies. The government is also expected to give local businesses The government is also expected to give local businesses
AU$100,000 if the company has a turnover of less than AU$50 mil ionAU$100,000 if the company has a turnover of less than AU$50 mil ion each year and each year and
underwrite 50% of up AU$40 bil ion in loans offered by local lendersunderwrite 50% of up AU$40 bil ion in loans offered by local lenders ~~to smal~~ to small and and
mediummedium sized companies. sized companies.
March 30: Unveiled an economic package of AU$130 bil ion ($79.85 bil ion) to Unveiled an economic package of AU$130 bil ion ($79.85 bil ion) to
subsidize the wages of an estimated 6 mil ionsubsidize the wages of an estimated 6 mil ion people, marking a third tranche of people, marking a third tranche of
stimulus designed to limitstimulus designed to limit ~~the fal out~~ the fallout of the COVID-19 pandemic on the country’s of the COVID-19 pandemic on the country’s
economy.economy. The “job keeper” The “job keeper” ~~al owance,~~ allowance, which would bring the country’s COVID-19-which would bring the country’s COVID-19-
related stimulus so far to A$320 bil ion (about 15% of Australia’srelated stimulus so far to A$320 bil ion (about 15% of Australia’s ~~gross~~ gross domestic domestic
product), wil provide eligibleproduct), wil provide eligible companies with AU$1,500 every fortnight for six companies with AU$1,500 every fortnight for six
months for each employee.months for each employee. Any company that lost 30% of its revenue can apply for Any company that lost 30% of its revenue can apply for
the funds. the funds.
Austria
Government of Austria
March 14: Set up an initial 4 bil ion Set up an initial 4 bil ion euro ($4.4 bil ion) “corona crisiseuro ($4.4 bil ion) “corona crisis fund” to cover, fund” to cover,
among other things, benefits for affected workers,among other things, benefits for affected workers, ~~as wel~~ as well as bridge loans and credit as bridge loans and credit
guarantees to shore up businesses’guarantees to shore up businesses’ liquidity. liquidity.
March 18: Announced that it wil spend up to 38 bil ion euros ($42 bil ion) to secure Announced that it wil spend up to 38 bil ion euros ($42 bil ion) to secure
jobs and keep companies afloat, and it wiljobs and keep companies afloat, and it wil provide another 9 bil ionprovide another 9 bil ion euros in euros in
guarantees and warranties,guarantees and warranties, 15 bil ion15 bil ion euros in emergencyeuros in emergency aid, and 10 bil ionaid, and 10 bil ion euros in euros in
tax deferrals. tax deferrals.
Bosnia and
March 17: The prime The prime ~~minister~~ minister met with the IMF Resident Representative in Bosnia met with the IMF Resident Representative in Bosnia
Herzegovina
to request assistance from the IMF. The IMF indicated that it may extend a 165 to request assistance from the IMF. The IMF indicated that it may extend a 165
mil ionmil ion ~~euros~~ euros ($181 mil ion) loan to Bosnia under a Rapid Financing Instrument (RFI) ($181 mil ion) loan to Bosnia under a Rapid Financing Instrument (RFI)
to finance the increasing costs sustained by the country’s health systemto finance the increasing costs sustained by the country’s health system in combating in combating
COVID-19. COVID-19.
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Brazil
Central Bank of Brazil
March 18: Cut its benchmark interest rate by 50 basis points to 3.75% to cushion Cut its benchmark interest rate by 50 basis points to 3.75% to cushion
the economic blow of the COVID-19 pandemic. It also sold $830 mil ionthe economic blow of the COVID-19 pandemic. It also sold $830 mil ion in two in two
rounds of spot foreign exchange intervention and announced a repurchase program rounds of spot foreign exchange intervention and announced a repurchase program
for dol ar-denominated sovereignfor dol ar-denominated sovereign bonds held by Brazilian banks, which wil be carried bonds held by Brazilian banks, which wil be carried
out in conjunction with the Treasury. out in conjunction with the Treasury.
March 23: Announced that it planned to inject 1.2 tril ionAnnounced that it planned to inject 1.2 tril ion reais ($233.81 bil ion) into reais ($233.81 bil ion) into
the country’s financial systemthe country’s financial system to counteract the effects of the COVID-19 outbreak, to counteract the effects of the COVID-19 outbreak,
with morewith more than half that amount comprising loans to banks. Under the program, than half that amount comprising loans to banks. Under the program,
lenderslenders wil be able to package their loan portfolios into long-termwil be able to package their loan portfolios into long-term deposits to be deposits to be
acquired by the central bank in a move aimed at freeing up 670 bil ion reaisacquired by the central bank in a move aimed at freeing up 670 bil ion reais for fresh for fresh
loans. It also (1) cut long-term reserveloans. It also (1) cut long-term reserve ~~requirements~~ requirements to 17% from 25%, freeing up 68 to 17% from 25%, freeing up 68
bil ion reaisbil ion reais currently in compulsorycurrently in compulsory deposits with the central bank to banks, (2) deposits with the central bank to banks, (2)
announced measuresannounced measures ~~al owing smal~~ allowing small and mid-sized lendersand mid-sized lenders to issue up to 2 bil ion to issue up to 2 bil ion
reaisreais in special long-term bonds guaranteed by a privately held deposit insurance fund, in special long-term bonds guaranteed by a privately held deposit insurance fund,
limitedlimited to an amount equivalent to its shareholders’to an amount equivalent to its shareholders’ equity, and (3) wil extend loans equity, and (3) wil extend loans
backed by corporate bonds to financial institutions between March 23 and April 30 to backed by corporate bonds to financial institutions between March 23 and April 30 to
add liquidity to their investment funds. add liquidity to their investment funds.

Government of Brazil
March 16: Announced a fiscal stimulus package of 147.1 bil ion reaisAnnounced a fiscal stimulus package of 147.1 bil ion reais ($28.6 bil ion) ($28.6 bil ion)
to mitigate the impact of the COVID-19 and boost the economy.to mitigate the impact of the COVID-19 and boost the economy. It does not contain It does not contain
new money,new money, but is a range of measuresbut is a range of measures that aim to protect the most vulnerable that aim to protect the most vulnerable
population through social assistance payments (83.4 bil ionpopulation through social assistance payments (83.4 bil ion reais), support domestic reais), support domestic
companies and defer business taxes (59.4 bil ioncompanies and defer business taxes (59.4 bil ion reais), and increase investmentsreais), and increase investments in in
healthcare to combat the COVID-19 (4.5 bil ionhealthcare to combat the COVID-19 (4.5 bil ion reais). The government also reais). The government also
announced a 3.1 bil ionannounced a 3.1 bil ion reais boost to the “Bolsa Família”reais boost to the “Bolsa Família” assistance for someassistance for some of of
Brazil’sBrazil’s poorest families. poorest families.
March 16: The National Monetary Council (CMN) approved the measures The National Monetary Council (CMN) approved the measures that wil that wil
~~al ow~~allow banks to (1) increase banks to (1) increase loans and offer better terms to firms and households over loans and offer better terms to firms and households over
the next six months and (2) extend certain loan maturitiesthe next six months and (2) extend certain loan maturities for the next six months. It for the next six months. It
also loweredalso lowered capital requirementscapital requirements for banks. for banks.
April 1: Announced that it wil cut the IOF financial tax for 90 days. It wil be Announced that it wil cut the IOF financial tax for 90 days. It wil be
temporary and cost 7 bil ion reais.temporary and cost 7 bil ion reais. It wilIt wil also extend the deadline for submitting the also extend the deadline for submitting the
2019 base year net income2019 base year net income report to June 30 from Aprilreport to June 30 from April 30 and 30 and ~~al ow~~allow companies to companies to
postpone payment of certain tax contributions for two months and reduce wages by postpone payment of certain tax contributions for two months and reduce wages by
up to 70% (or the minimumup to 70% (or the minimum wage) for three months, among other measures. wage) for three months, among other measures.
Bulgaria
Government of Bulgaria
March 30: Announced it wil spend more Announced it wil spend more than 1 bil ion levs ($566 mil ion)than 1 bil ion levs ($566 mil ion) to pay to pay
part of workers’part of workers’ ~~salaries~~ salaries in companies whose operations have been hit by the in companies whose operations have been hit by the
COVID-19 crisis,COVID-19 crisis, part of part of an part of part of an ~~overal~~ overall 4.5 bil ion-lev4.5 bil ion-lev package. package.
March 31: Announced plans to raise Announced plans to raise the ceiling on new debt it can raise to 10 bil ion the ceiling on new debt it can raise to 10 bil ion
levs due to the COVID-19 pandemic. levs due to the COVID-19 pandemic.
Cambodia
Government of Cambodia
March 5: Announced that it would Announced that it would ~~al ocate~~allocate $30 mil ion $30 mil ion to finance Cambodia’s to finance Cambodia’s
COVID-19 screening and monitoring efforts. COVID-19 screening and monitoring efforts.
March 10: Al ocated between $800 mil ionAl ocated between $800 mil ion to $2 bil ionto $2 bil ion to address the economic to address the economic
impacts of the novel COVID-19 outbreak.impacts of the novel COVID-19 outbreak.
Canada
Bank of Canada
March 4: Lowered Lowered its target for the overnight rate by 50 basis points to 1.25% its target for the overnight rate by 50 basis points to 1.25%
(setting the bank rate to 1.5% and the deposit rate to 1%). (setting the bank rate to 1.5% and the deposit rate to 1%).
March 12: Announced that it wil broaden the scope of the current GovernmentAnnounced that it wil broaden the scope of the current Government of of
Canada bond buyback program and temporarilyCanada bond buyback program and temporarily add new Term Repo operations. add new Term Repo operations.
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March 13: Lowered Lowered its benchmark overnight rate to 1.25% from 1.75% in response its benchmark overnight rate to 1.25% from 1.75% in response
to the epidemic. to the epidemic.
March 13: Announced its intention to launch the Bankers’Announced its intention to launch the Bankers’ Acceptance Purchase Acceptance Purchase
Facility (BAPF), starting the week of March 23, 2020, in an effort to support the Facility (BAPF), starting the week of March 23, 2020, in an effort to support the
continuous functioning of financial markets; it wil conduct secondary market continuous functioning of financial markets; it wil conduct secondary market
purchases of one-month Bankers’purchases of one-month Bankers’ Acceptances issued and guaranteed by any Acceptances issued and guaranteed by any
Canadian bank and of sufficiently high quality. BAPF operations wil be conducted Canadian bank and of sufficiently high quality. BAPF operations wil be conducted
weeklyweekly with the purchase amount and reservewith the purchase amount and reserve rate being adjusted to reflect market rate being adjusted to reflect market
conditions. (For the first operation,conditions. (For the first operation, the Bank of Canada the Bank of Canada ~~wil~~ will purchase up to $10 purchase up to $10
bil ion of one-month Bankers’bil ion of one-month Bankers’ Acceptances with a reserveAcceptances with a reserve rate of the overnight index rate of the overnight index
swap rate plus 20 basis points.) swap rate plus 20 basis points.)
March 16: Announced that it wil broaden eligibleAnnounced that it wil broaden eligible col ateralcol ateral for its term repo facility for its term repo facility
and increaseand increase purchases of mortgage-backed securitiespurchases of mortgage-backed securities (Canada Mortgage Bonds). (Canada Mortgage Bonds).
March 27: Cut its overnight interestCut its overnight interest rate by 50 basis points to 0.25%, its lowestrate by 50 basis points to 0.25%, its lowest level level
since June 2010 and the third cut in March, to support an economy hit hard by the since June 2010 and the third cut in March, to support an economy hit hard by the
outbreak of COVID-19. It also announced that it would begin purchases of CA$5 outbreak of COVID-19. It also announced that it would begin purchases of CA$5
bil ion per week of Government of Canada securitiesbil ion per week of Government of Canada securities in the secondary market. in the secondary market.

Canadian Government
March 6: Announced an investment of CA$27 mil ion Announced an investment of CA$27 mil ion to fund COVID-19 research to fund COVID-19 research
and accelerateand accelerate the development, testing, and implementationthe development, testing, and implementation of measuresof measures to deal to deal
with the COVID-19 outbreak. with the COVID-19 outbreak.
March 11: Unveiled CA$1 bil ion Unveiled CA$1 bil ion ($750 mil ion)($750 mil ion) in funding for vaccine researchin funding for vaccine research and and
health measures. health measures.
March 13: Established a Business Established a Business Credit AvailabilityCredit Availability ~~Program~~ Program (BCAP) to support (BCAP) to support
financing in the private sector through the Businessfinancing in the private sector through the Business ~~Development~~ Development Bank of Canada Bank of Canada
(BDC) and Export Development(BDC) and Export Development Canada (EDC); it wilCanada (EDC); it wil ~~al ow~~ allow BDC and EDC to BDC and EDC to
provide moreprovide more than $10 bil ionthan $10 bil ion of additional support to businesses. of additional support to businesses.
March 13: The Office of the Superintendent of Financial Institutions (OSFI) lowered The Office of the Superintendent of Financial Institutions (OSFI) lowered
the Domesticthe Domestic Stability Buffer requirementStability Buffer requirement for domestic for domestic ~~systemical y~~ systemically important banks important banks
by 1.25% of riskby 1.25% of risk weighted assets; it wilweighted assets; it wil increase the lending capacity of Canada’s large increase the lending capacity of Canada’s large
banks and support the supply of credit to the economybanks and support the supply of credit to the economy by moreby more than CA$300 bil ion. than CA$300 bil ion.
March 25: Almost Almost doubled the value of an aid package previously announced to help doubled the value of an aid package previously announced to help
people and businessespeople and businesses deal with lossesdeal with losses ~~from~~ from the COVID-19 outbreak, from CA$27 the COVID-19 outbreak, from CA$27
bil ion to CA$52 bil ionbil ion to CA$52 bil ion ($36.6 bil ion).($36.6 bil ion). It wilIt wil give people affected by the outbreak give people affected by the outbreak
CA$2,000 a month, delay student loan repayments,CA$2,000 a month, delay student loan repayments, and defer tax payments, among and defer tax payments, among
other measuresother measures to boost the economy. to boost the economy.
Chile
Central Bank of Chile
March 16: Cut its benchmark rate by 75 basis points to 1% and announced measures Cut its benchmark rate by 75 basis points to 1% and announced measures
to inject liquidity, including to inject liquidity, including ~~al ocating $4 bil ion~~ allocating $4 billion to purchase inflation-linked bank to purchase inflation-linked bank
bonds and providing additional credit to banks. bonds and providing additional credit to banks.
March 31: Cut its benchmark interest rate by 50 basis points to 0.50% amid the Cut its benchmark interest rate by 50 basis points to 0.50% amid the
COVID-19 pandemic. COVID-19 pandemic.

Government of Chile
March 19: Announced a stimulus Announced a stimulus package of $11.75 bn to mitigate the negative package of $11.75 bn to mitigate the negative
economiceconomic impact of the outbreak of COVID-19 and civil unrest. The measures impact of the outbreak of COVID-19 and civil unrest. The measures
include extending unemployment insurance to those who are sick or unable to work include extending unemployment insurance to those who are sick or unable to work
from home,from home, delaying tax payments for delaying tax payments for ~~smal~~ small businesses,businesses, a cash bonus for a cash bonus for
approximately 2 mil ionapproximately 2 mil ion ~~workers~~ workers who lack formalwho lack formal employment,employment, and emergency funds and emergency funds
for municipalities. for municipalities.
China
People’s Bank of China (PBOC)
February 3: Expanded reverseExpanded reverse repo operations by $174 bil ion;repo operations by $174 bil ion; added another $71 added another $71
bil ion on February 4. bil ion on February 4.
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February 16: Cut the one-year medium-termCut the one-year medium-term lending facility rate by 10 basis points. lending facility rate by 10 basis points.
February 20: Cut the one-year and five-year prime rates by 10 and 5 basis points, Cut the one-year and five-year prime rates by 10 and 5 basis points,
respectively. respectively.
March 13: LoweredLowered bank reservebank reserve requirements,requirements, freeing up about $79 bil ion to be freeing up about $79 bil ion to be
loaned out. loaned out.
March 30: LoweredLowered the interest rate on reversethe interest rate on reverse repurchase agreements to 2.20% repurchase agreements to 2.20%
from 2.40%, as authorities stepped up easing measuresfrom 2.40%, as authorities stepped up easing measures to relieveto relieve pressure on the pressure on the
economy that has been hit hard by the epidemic. economy that has been hit hard by the epidemic.

PRC Government
February: Asked Asked banks to extend the termsbanks to extend the terms of business loans and commercial of business loans and commercial
landlords to reduce rents. landlords to reduce rents.
February 24: The Asian Infrastructure Investment Bank (AIIB) contributed $1 The Asian Infrastructure Investment Bank (AIIB) contributed $1
mil ionmil ion in medical equipment to help China control the spread of COVID-19. in medical equipment to help China control the spread of COVID-19.
February 27: Announced a number of tax reliefAnnounced a number of tax relief ~~measures~~ measures to tackle COVID-19 to tackle COVID-19
disruption, including a temporary reduction its value-added tax (VAT) and the disruption, including a temporary reduction its value-added tax (VAT) and the
eliminationelimination of VAT on medical,of VAT on medical, catering, accommodation,catering, accommodation, hairdressing,hairdressing, and laundry and laundry
servicesservices ~~as wel~~ as well as on masksas on masks and protective clothing. and protective clothing.
March: EarmarkedEarmarked $15.9 bil ion$15.9 bil ion to fight the epidemic. to fight the epidemic.
March 21: Announced that it would cut fees on a large scale to stimulateAnnounced that it would cut fees on a large scale to stimulate private-private-
sector investment and also acceleratesector investment and also accelerate the development of “new infrastructure” to the development of “new infrastructure” to
help spur the economy. help spur the economy.
March 19: Reportedly is considering a fiscal stimulus package worth tril ions Reportedly is considering a fiscal stimulus package worth tril ions of yuan of yuan
to reviveto revive the economy amid the COVID-19 pandemic. The ramped-up spending the economy amid the COVID-19 pandemic. The ramped-up spending ~~wil~~
will aim to spur infrastructure investment, backed by as much as 2.8 tril ionaim to spur infrastructure investment, backed by as much as 2.8 tril ion yuan ($394 yuan ($394
bil ion) of local government special bonds. bil ion) of local government special bonds.
March 27: The Communist Party’s Politburo announced that it would step up The Communist Party’s Politburo announced that it would step up
macroeconomicmacroeconomic policy changes and pursue morepolicy changes and pursue more proactive fiscal policy. It proactive fiscal policy. It ~~cal ed~~called for for
expanding the budget deficit, issuing moreexpanding the budget deficit, issuing more local and national bonds, guiding interest local and national bonds, guiding interest
rates lower,rates lower, delaying loan repayments, reducing supply-chain bottlenecks and delaying loan repayments, reducing supply-chain bottlenecks and
boosting consumption. boosting consumption.
Colombia
Central Bank of Colombia
March 18: Announced a $400 mil ion Announced a $400 mil ion dol ar to peso swap to take place on March dol ar to peso swap to take place on March
19, and that it would increase the resources19, and that it would increase the resources available to financial institutions and ease available to financial institutions and ease
rules on which institutions can have access to funds. rules on which institutions can have access to funds.
March 27: Cut its benchmark interest rate by 50 basis points to 3.75% in an effort to Cut its benchmark interest rate by 50 basis points to 3.75% in an effort to
boost economicboost economic growth amid growth amid ~~fal~~ fall-out from COVID-19. -out from COVID-19.

Government of Colombia
March 18: Announced that it has 14.8 tril ion Announced that it has 14.8 tril ion pesos ($3.65 bil ion) to spend on pesos ($3.65 bil ion) to spend on
emergencyemergency ~~measures~~ measures to ease the economic to ease the economic ~~fal out from~~ fallout from COVID-19, but it wilCOVID-19, but it wil not not
take on additional debt to finance the efforts (12.1 tril iontake on additional debt to finance the efforts (12.1 tril ion pesos wilpesos wil come from the come from the
country’s savings programs). It wilcountry’s savings programs). It wil ~~initial y~~ initially spend 1 tril ion spend 1 tril ion pesos on the healthcare pesos on the healthcare
systemsystem and 500 bil ion pesos on additional payments to social welfareand 500 bil ion pesos on additional payments to social welfare programs for programs for
families,families, young people and the elderly,young people and the elderly, accelerate a plan to return value added tax to accelerate a plan to return value added tax to
the neediest Colombiansthe neediest Colombians from April,from April, and makeand make 48 tril ion48 tril ion pesos available to give pesos available to give
credit guarantees to credit guarantees to ~~smal~~ small and medium-sizedand medium-sized ~~businesses~~ businesses and households. and households.
Congo-Kinshasa
March 24: The Central Bank of the Congo cut its base interest rate to 7.5% from The Central Bank of the Congo cut its base interest rate to 7.5% from
(Democratic Republic
9.0% in order to cushion the economic impact of the COVID-19 outbreak. It wil also 9.0% in order to cushion the economic impact of the COVID-19 outbreak. It wil also
of the Congo)
cut mandatory reserve cut mandatory reserve ~~requirements~~ requirements and provide liquidity to banks. and provide liquidity to banks.
Cyprus
Government of Cyprus
March 15: Unveiled a 700 mil ion Unveiled a 700 mil ion euro support package for companieseuro support package for companies and workers and workers
to deal with the impact of the spread ofto deal with the impact of the spread of COVID-19, which includes a temporary VAT COVID-19, which includes a temporary VAT
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reduction, support for individuals and companies affected, additional paid sick reduction, support for individuals and companies affected, additional paid sick leave, leave,
and 100 mil ionand 100 mil ion euro for the public health sector. euro for the public health sector.
March 23: Announced that it is revising the economic Announced that it is revising the economic package announced on March package announced on March
15. It wil amount to at least 1.5 bil ion15. It wil amount to at least 1.5 bil ion euro and include direct support, deferred euro and include direct support, deferred
government income in the formgovernment income in the form of payment suspension of direct and indirect taxes of payment suspension of direct and indirect taxes
and other fees, as and other fees, as ~~wel~~ well as government guarantees (which would not incur a fiscal as government guarantees (which would not incur a fiscal
impact unless they materialize). impact unless they materialize).
Czech Republic
Czech National Bank
March 16: The Czech National Bank lowered The Czech National Bank lowered its main two-week repo rate by 50 its main two-week repo rate by 50
basis points to 1.75%, reversingbasis points to 1.75%, reversing its February rate hike to combat the hit fromits February rate hike to combat the hit from the the
virus outbreak. It also raisedvirus outbreak. It also raised the number of repo operations that provide liquidity to the number of repo operations that provide liquidity to
banks to three times a weekbanks to three times a week from once, noting that bids would be met with zero from once, noting that bids would be met with zero
spread to the repo rate. spread to the repo rate.
March 17: Revised the countercyclical capital buffer for exposures located in the Revised the countercyclical capital buffer for exposures located in the
Czech Republic to 1.75 %. Czech Republic to 1.75 %.
March 26: Cut its main two-week repo rate by 75 basis points to 1.00% and Cut its main two-week repo rate by 75 basis points to 1.00% and
announced that it was ready to cut interestannounced that it was ready to cut interest rates further if needed. rates further if needed.

Government of the Czech Republic
March 9: Adopted a number of economicAdopted a number of economic measures,measures, which wilwhich wil include providing 100 include providing 100
bil ion CZK ($3.9 bil ion) in direct support and 900 bil ion CZK ($34.8 bil ion) in bil ion CZK ($3.9 bil ion) in direct support and 900 bil ion CZK ($34.8 bil ion) in
indirect in the form of guarantees to maintain the employmentindirect in the form of guarantees to maintain the employment rate, paying out rate, paying out
(through the respective(through the respective employers)employers) 60% of the average contribution base to 60% of the average contribution base to
employeesemployees affected by the quarantine, supporting employersaffected by the quarantine, supporting employers who continue, despite who continue, despite
their businesses being shut down, to pay out 100% of the salary to affected their businesses being shut down, to pay out 100% of the salary to affected
employeesemployees by covering 80% of salary costs (up to 1.2 bil ion CZK), and by covering 80% of salary costs (up to 1.2 bil ion CZK), and ~~al ocating~~allocating 10 10
bil ion CZK ($390 mil ion)bil ion CZK ($390 mil ion) to the Czech-Moravian Guarantee and Developmentto the Czech-Moravian Guarantee and Development Bank Bank
for immediatefor immediate granting of interest-freegranting of interest-free loans with a one-year deferral with the loans with a one-year deferral with the
possibilitypossibility of a two-year extension for businessesof a two-year extension for businesses affected by the COVID-19 affected by the COVID-19
(“COVID Loans Program”).(“COVID Loans Program”). (On March 16, the government(On March 16, the government ~~earmarked~~ earmarked another 1 another 1
bil ion CZK to the COVID Loans Program.) bil ion CZK to the COVID Loans Program.)
March 13: Extended the deadline for the filing of tax returns until 1 July and waived Extended the deadline for the filing of tax returns until 1 July and waived
fines stemmingfines stemming from the late submissionfrom the late submission of tax declarations or reports. of tax declarations or reports.
March 13: The Czech Banking Association (ČBA) The Czech Banking Association (ČBA) wil wil ~~al ow~~allow banks to voluntarily banks to voluntarily
extend the deadlines on loan and mortgage payments. extend the deadlines on loan and mortgage payments.
March 23: Approved a five-fold rise Approved a five-fold rise in this year’sin this year’s budget deficit, as it offers help to budget deficit, as it offers help to
businessesbusinesses hit hard by the COVID-19 outbreak. hit hard by the COVID-19 outbreak.
April 1: Announced that it had approved a scheme for a moratoriumAnnounced that it had approved a scheme for a moratorium of up to six of up to six
months on consumer,months on consumer, company, and mortgage loan payments to help the country company, and mortgage loan payments to help the country
through the COVID-19 crisis. through the COVID-19 crisis.
Denmark
Danmarks Nationalbank
March 12: Released banks’ emergency buffer and wilReleased banks’ emergency buffer and wil be offering low interest rate be offering low interest rate
loans to banks. loans to banks.
March 26: Injected $2.85 bil ion in loans to Danish banks and financial institutions by Injected $2.85 bil ion in loans to Danish banks and financial institutions by
auctioning off U.S.auctioning off U.S. dol ars in two loans with a maturity date on Aprildol ars in two loans with a maturity date on April 8 and June 19 8 and June 19
and a cut-off rate of 0.32 and 0.34, respectively. and a cut-off rate of 0.32 and 0.34, respectively.
April 1: Sold $750 mil ion Sold $750 mil ion worth of its mint 30-year government bonds in an auction worth of its mint 30-year government bonds in an auction
that was held a month early to expedite funding of aid packagesthat was held a month early to expedite funding of aid packages due to COVID-19 due to COVID-19
that is expected to cost the state morethat is expected to cost the state more than 60 bil ion Danish crowns ($8.8 bil ion). than 60 bil ion Danish crowns ($8.8 bil ion).

Government of Denmark
March 10: Wil Wil grant tax breaks to businessesgrant tax breaks to businesses affected by the COVID-19 as part of a affected by the COVID-19 as part of a
seriesseries of measuresof measures worth $20 bil ion.worth $20 bil ion. Large businessesLarge businesses ~~wil~~ wil be given an additional 30 be given an additional 30
days to pay value added tax, while days to pay value added tax, while al all companies wilcompanies wil be granted four additional be granted four additional
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months to pay their labor contributions. The government is also lifting the ceiling on months to pay their labor contributions. The government is also lifting the ceiling on
businesses’businesses’ tax accounts, so that corporations can avoid paying the negative interest tax accounts, so that corporations can avoid paying the negative interest
rates they are charged when placing cash in the bank. rates they are charged when placing cash in the bank.
March 12: Indicated that it would release Indicated that it would release banks’ counter-cyclical capital buffer, banks’ counter-cyclical capital buffer,
freeing about 200 bil ionfreeing about 200 bil ion Danish crowns ($30 bil ion) for lending. Other fiscal Danish crowns ($30 bil ion) for lending. Other fiscal
measures,measures, worth 2.8 bil ion Danish crowns ($416 mil ion),worth 2.8 bil ion Danish crowns ($416 mil ion), include compensation to include compensation to
companies for salary payments to employeescompanies for salary payments to employees who have who have ~~fal en il~~ fallen il or been quarantined or been quarantined
due to the COVID-19. due to the COVID-19.
March 18: Proposed an economic Proposed an economic aid package worth 40 bil ionaid package worth 40 bil ion kroner ($5.8 bil ion) kroner ($5.8 bil ion)
to help to help ~~smal businesses~~ small businesses cover (for three months) most of the lossescover (for three months) most of the losses in revenue and in revenue and
somesome of their fixed expenses as a result of the COVID-19 outbreak. Under the of their fixed expenses as a result of the COVID-19 outbreak. Under the
program,program, companies who have seen their revenuescompanies who have seen their revenues decline by 40% or moredecline by 40% or more wil wil
receivereceive government grants to help cover between 25% to 80% of their fixed costs, government grants to help cover between 25% to 80% of their fixed costs,
and self-employedand self-employed ~~and smal~~ and small firms who see their revenues firms who see their revenues ~~fal more~~ fall more than 30% wilthan 30% wil also also
be offered government compensation worth 75% of their normal monthly income. be offered government compensation worth 75% of their normal monthly income.
March 31: Announced that it wil postpone by three months around 200,000 Announced that it wil postpone by three months around 200,000
companies’companies’ deadline of end-May to submit their annual reports in an effort to help deadline of end-May to submit their annual reports in an effort to help
companies affected by the COVID-19 outbreak. companies affected by the COVID-19 outbreak.
Egypt
Central Bank of Egypt
March 16: Cut by 300 basis points both the overnight lending rate (from 13.25% to Cut by 300 basis points both the overnight lending rate (from 13.25% to
10.25%) and the overnight deposit rate (from 12.25% to 9.25%) in what it described 10.25%) and the overnight deposit rate (from 12.25% to 9.25%) in what it described
as a “preemptive”as a “preemptive” move to support the economy in the face of the COVID-19 move to support the economy in the face of the COVID-19
outbreak. outbreak.
March 23: Told commercial Told commercial banks to cut interest on dol ar deposits to 1% above the banks to cut interest on dol ar deposits to 1% above the
London Interbank Offered Rate (Libor) instead of 1.5% above Libor,London Interbank Offered Rate (Libor) instead of 1.5% above Libor, starting March starting March
23, in order to control the exchange market23, in order to control the exchange market and reduce the expected dol arization and reduce the expected dol arization
operations after cutting interestoperations after cutting interest rates on March 16. rates on March 16.
March 29: Instructed Egyptian banks to apply temporary limitsInstructed Egyptian banks to apply temporary limits on daily withdrawals on daily withdrawals
and deposits in a moveand deposits in a move ~~seemingly~~ seemingly designed to control inflation and hoarding during designed to control inflation and hoarding during
the coronavirus’the coronavirus’ spread, after 30 bil ionspread, after 30 bil ion Egyptian pounds ($1.91 bil ion)Egyptian pounds ($1.91 bil ion) were were
withdrawn from banks in the past three weeks.withdrawn from banks in the past three weeks. The daily limitThe daily limit for individuals would for individuals would
be 10,000 Egyptian pounds ($635) and 50,000 pounds for companies. be 10,000 Egyptian pounds ($635) and 50,000 pounds for companies.

Government of Egypt
March 14: Indicated that the government wil Indicated that the government wil ~~al ocate~~ allocate 100 bil ion Egyptian pounds 100 bil ion Egyptian pounds
($6.4 bil ion) to finance a “comprehensive”($6.4 bil ion) to finance a “comprehensive” state plan for combating the COVID-19 state plan for combating the COVID-19
outbreak. outbreak.
March 22: Announced that the government would Announced that the government would ~~al ocate~~allocate 20 bil ion Egyptian 20 bil ion Egyptian
pounds ($1.27 bil ion)pounds ($1.27 bil ion) to support the stock exchange. to support the stock exchange.
March 30: Ordered relevant authorities to boost strategic reserves Ordered relevant authorities to boost strategic reserves of staple goods, of staple goods,
as global concerns about food security rise amid the COVID-19 crisis. as global concerns about food security rise amid the COVID-19 crisis.
Eswatini (Swaziland)
March 21: The Central Bank of Eswatini cut its main lending rate by 100 basis points The Central Bank of Eswatini cut its main lending rate by 100 basis points
to 5.5%, citing global and domesticto 5.5%, citing global and domestic economic developmentseconomic developments and the impact of and the impact of
COVID-19. The reduction was to ensure the equal pegging of the local currency with COVID-19. The reduction was to ensure the equal pegging of the local currency with
the South African rand after the South African Reservethe South African rand after the South African Reserve Bank (SARB) cut its main Bank (SARB) cut its main
lending rate by 100 basis points to 5.25% on March 19. lending rate by 100 basis points to 5.25% on March 19.
European Union
European Central Bank (ECB)
March 12: Announced that it would provide banks with loans at a rate as low as Announced that it would provide banks with loans at a rate as low as
minus 0.75%, below the-0.5% deposit rate, increase bond purchases by 120 bil ion minus 0.75%, below the-0.5% deposit rate, increase bond purchases by 120 bil ion
euros ($135.28 bil ion) this year (with a focus on corporate debt), and euros ($135.28 bil ion) this year (with a focus on corporate debt), and ~~al ow~~allow euro euro
zone banks to zone banks to ~~fal~~ fall short of someshort of some key capital and cash requirementskey capital and cash requirements (in order to keep (in order to keep
credit flowing to the economy). credit flowing to the economy).
March 18: Launched a new, 750 bil ion euro ($818 bil ion) temporary asset purchase Launched a new, 750 bil ion euro ($818 bil ion) temporary asset purchase
program of private and public sector securitiesprogram of private and public sector securities to counter the risksto counter the risks posed by the posed by the
outbreak and escalating diffusion of COVID-19 (the Pandemic Emergency Purchase outbreak and escalating diffusion of COVID-19 (the Pandemic Emergency Purchase
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Programme). Programme). Purchases wil be conducted until the end of 2020 and wil include Purchases wil be conducted until the end of 2020 and wil include al
all the asset categories eligiblethe asset categories eligible under the existing asset purchase program.under the existing asset purchase program. It wil also It wil also
support commercialsupport commercial debt marketsdebt markets by expanding the range of eligibleby expanding the range of eligible assets under the assets under the
corporate sector purchase program to nonfinancial commercialcorporate sector purchase program to nonfinancial commercial paper of sufficient paper of sufficient
credit quality, and by easing col ateral standards by expanding the scope of Additional credit quality, and by easing col ateral standards by expanding the scope of Additional
Credit ClaimsCredit Claims to include claimsto include claims related to the financing of the corporate sector. related to the financing of the corporate sector.
March 26: Announced that under the new 750 bil ionAnnounced that under the new 750 bil ion euro ($818 bil ion) temporary euro ($818 bil ion) temporary
bond purchase Pandemic Emergency Purchase Program (PEPP), it would not apply bond purchase Pandemic Emergency Purchase Program (PEPP), it would not apply
self-imposedself-imposed ~~limits~~ limits on how many bonds it could buy from any single euro zone on how many bonds it could buy from any single euro zone
country. Under its long-running asset purchase scheme,country. Under its long-running asset purchase scheme, the ECB has capped bond the ECB has capped bond
buys at 33% of each euro zone state’s debt. buys at 33% of each euro zone state’s debt.

European Commission
March 11: Announced a 37 bil ion euro ($41 bil ion) “Corona Investment Fund” that Announced a 37 bil ion euro ($41 bil ion) “Corona Investment Fund” that
would use “spare” money from the EU budget to help businesses,would use “spare” money from the EU budget to help businesses, health-care health-care
systems,systems, and sectors in need; and sectors in need; ~~additional y~~additionally, the EU’s own investment fund wil , the EU’s own investment fund wil
guarantee 8 bil ion euros ($8.9 bil ion) of loans to 100,000 guarantee 8 bil ion euros ($8.9 bil ion) of loans to 100,000 ~~smal~~ small- and medium-sized - and medium-sized
enterprisesenterprises and affected companiesand affected companies may be able to delay the payment of their existing may be able to delay the payment of their existing
loans. loans.
March 19: Adopted a Temporary Framework Adopted a Temporary Framework to enable Member States to use the to enable Member States to use the
ful flexibilityful flexibility ~~foreseen~~ foreseen under state aid rules to support the economy in the context of under state aid rules to support the economy in the context of
the COVID-19 outbreak. It provides for five types of aid: (1) direct grants, selective the COVID-19 outbreak. It provides for five types of aid: (1) direct grants, selective
tax advantages and advance payments (Member States wil be able to set up schemes tax advantages and advance payments (Member States wil be able to set up schemes
to grant up to 800,000 euros to a company to address its urgent liquidity needs); (2) to grant up to 800,000 euros to a company to address its urgent liquidity needs); (2)
state guarantees for loans taken by companies fromstate guarantees for loans taken by companies from banks; (3) subsidized public loans banks; (3) subsidized public loans
to companies; (4) safeguards for banks that channel state aid to the realto companies; (4) safeguards for banks that channel state aid to the real economy; economy;
and (5) short-termand (5) short-term export credit insurance. export credit insurance.
Fiji
March 18: The ReserveThe Reserve Bank of FijiBank of Fiji cut its Overnight Policy Rate by 25 basis points cut its Overnight Policy Rate by 25 basis points
to 0.25% in orderto 0.25% in order to stimulate demand and cushion the blow to its important tourism to stimulate demand and cushion the blow to its important tourism
industry from the global spread of COVID-19.industry from the global spread of COVID-19.
France
Government of France
March 12: Pledged more Pledged more generous guarantees on loans made to generous guarantees on loans made to ~~smal~~ small businesses, businesses,
moremore cash for firmscash for firms struggling to hold on to workers,struggling to hold on to workers, and a solidarity fund to help and a solidarity fund to help
companies cushion the blow from the COVID-19 outbreak; it also announced that companies cushion the blow from the COVID-19 outbreak; it also announced that
the government would be ready to increase funds available to help companies reduce the government would be ready to increase funds available to help companies reduce
workers’workers’ hours, instead of laying them off. hours, instead of laying them off.
March 16: Announced that the government would guarantee 300 bil ion Announced that the government would guarantee 300 bil ion euros in euros in
bank loans for bank loans for ~~smal~~ small and medium-sizedand medium-sized businesses. businesses.
March 17: The Autorité des Marchés Financiers The Autorité des Marchés Financiers (AMF), France’s financial-markets (AMF), France’s financial-markets
authority, stated that it would forbid short authority, stated that it would forbid short ~~sel ing~~selling of stock in 92 companies during the of stock in 92 companies during the
March 17 session. March 17 session.
March 17: Announced that it would spend 45 bil ion Announced that it would spend 45 bil ion euros ($50 bil ion) to help euros ($50 bil ion) to help ~~smal~~
small businessesbusinesses and employeesand employees struggling with the COVID-19 outbreak, including through struggling with the COVID-19 outbreak, including through
an expanded partial-unemployment package in which the state pays the salariesan expanded partial-unemployment package in which the state pays the salaries of of
employeesemployees who are not needed during the crisis. who are not needed during the crisis.
Gambia
February 28: The Central Bank of The Gambia lowered The Central Bank of The Gambia lowered its policy rate by 50 basis its policy rate by 50 basis
points to 12.0% amid riskspoints to 12.0% amid risks from the COVID-19 outbreak and uncertainty surrounding from the COVID-19 outbreak and uncertainty surrounding
global food prices. global food prices.
Georgia
April 1: The government announced that it wil The government announced that it wil put 2 bil ionput 2 bil ion lari ($606 mil ion)lari ($606 mil ion) from from
its state budget toward helping the economy through the COVID-19 pandemic, in its state budget toward helping the economy through the COVID-19 pandemic, in
addition to 351 mil ionaddition to 351 mil ion ~~lari~~ lari that wil be that wil be ~~al ocated~~allocated for the healthcare system for the healthcare system from the from the
state budget. The government wil fund three months’ payments for electricitystate budget. The government wil fund three months’ payments for electricity and and
gas consumption to Georgiansgas consumption to Georgians who used lesswho used less than 200 kilowatts of electricitythan 200 kilowatts of electricity and 200 and 200
cubic meterscubic meters of gas a month in March, April,of gas a month in March, April, and May.and May.
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Germany
Government of Germany
March 13: Pledged to provide unlimitedPledged to provide unlimited liquidity assistance to Germanliquidity assistance to German companies hit companies hit
by the pandemic. (The measureby the pandemic. (The measure envisages an expansion of loans provided by KfW,envisages an expansion of loans provided by KfW, the the
state development bank, and wil state development bank, and wil ~~al ow~~ allow companies to defer bil ions of euros in tax companies to defer bil ions of euros in tax
payments.) The Bundestag also expanded the Kurzarbeit or short-timepayments.) The Bundestag also expanded the Kurzarbeit or short-time work scheme, work scheme,
under which companies that put their workersunder which companies that put their workers on reduced hours can receiveon reduced hours can receive state state
support. The government also indicated that it would boost investments by €3.1 support. The government also indicated that it would boost investments by €3.1
bil ion per year (about $3.5 bil ion)bil ion per year (about $3.5 bil ion) between 2021 and 2024. between 2021 and 2024.
March 23: Agreed to a package worth more Agreed to a package worth more than 750 bil ionthan 750 bil ion euros ($808 bil ion) to euros ($808 bil ion) to
mitigate the damage of the COVID-19 outbreak. It includes 156 bil ion eurosmitigate the damage of the COVID-19 outbreak. It includes 156 bil ion euros in debt in debt
to finance higher socialto finance higher social spending, 50 bil ion-eurospending, 50 bil ion-euro liquidity fund for self-employed liquidity fund for self-employed
people, 600 bil ion-europeople, 600 bil ion-euro rescue fund (400 bil ion euros in guarantees,100 bil ionrescue fund (400 bil ion euros in guarantees,100 bil ion euros euros
in loans through state-run developmentin loans through state-run development bank KfW,bank KfW, and 100 bil ionand 100 bil ion euros earmarked euros earmarked
for equity stakes in companies). for equity stakes in companies). ~~Additional y,~~ Additionally, the state’s KfW bank has 500 bil ion the state’s KfW bank has 500 bil ion
euros available to boost liquidity of Germaneuros available to boost liquidity of German companies. companies.
March 30: Announced that, in response to COVID-19, it would expand export loan Announced that, in response to COVID-19, it would expand export loan
guarantees on short-term payments to include transactions within the EU and with guarantees on short-term payments to include transactions within the EU and with
Australia,Australia, Canada, Iceland, Japan, New Zealand, Norway, Switzerland, Britain, and the Canada, Iceland, Japan, New Zealand, Norway, Switzerland, Britain, and the
United States. United States.
Ghana
March 18: The Bank of Ghana (Ghana’s central bank) cut its interest rate to 14.5% The Bank of Ghana (Ghana’s central bank) cut its interest rate to 14.5%
from 16% due to the negative economicfrom 16% due to the negative economic impacts it anticipates from the spread of the impacts it anticipates from the spread of the
COVID-19. COVID-19.
Greece
Government of Greece
March 9: Wil Wil suspend the payment of sales taxes due at the end of March (for four suspend the payment of sales taxes due at the end of March (for four
months) of social security contributions by companies (until June 30). months) of social security contributions by companies (until June 30).
March 17: Announced a package of up to 2 bil ion Announced a package of up to 2 bil ion euros ($2.20 bil ion) to support euros ($2.20 bil ion) to support
businessesbusinesses fol owing the COVID-19 outbreak fol owing the COVID-19 outbreak
March 17: The The ~~Hel enic~~ Hellenic Bank AssociationBank Association wil offer businesseswil offer businesses hit by the COVID-19 hit by the COVID-19
crisiscrisis a six-month freeze on loan payments as part of reliefa six-month freeze on loan payments as part of relief efforts to help borrowers efforts to help borrowers
deal with the economicdeal with the economic shutdown. shutdown.
March 30: Announced new tax breaks and economic Announced new tax breaks and economic assistance to thousands of assistance to thousands of
businessesbusinesses and workersand workers to buffer its economy from a national lockdown triggered by to buffer its economy from a national lockdown triggered by
the COVID-19 pandemic. The support measuresthe COVID-19 pandemic. The support measures include a one-off benefit for 1.7 include a one-off benefit for 1.7
mil ion,mil ion, or 81% of private sectoror 81% of private sector ~~workers~~ workers whose jobs are temporarilywhose jobs are temporarily suspended and suspended and
payment of their social security contributions for 45 days, extend financial aid for the payment of their social security contributions for 45 days, extend financial aid for the
self-employed,self-employed, and suspend VAT and tax arrear payments for 800,000 businesses. and suspend VAT and tax arrear payments for 800,000 businesses.
Guatemala
March 29: The government announced that it would use nearly $26 mil ion The government announced that it would use nearly $26 mil ion ~~from~~ from an an
emergencyemergency fund to help the country’s neediest families,fund to help the country’s neediest families, as measuresas measures to combat the to combat the
spread of a COVID-19 impact on the economy and jobs,spread of a COVID-19 impact on the economy and jobs, It plans to withdraw 200 It plans to withdraw 200
mil ionmil ion quetzals ($25.8 mil ion)quetzals ($25.8 mil ion) from the emergency fund and give familiesfrom the emergency fund and give families 1,000 1,000
quetzals ($129) to help pay for electricity,quetzals ($129) to help pay for electricity, water and supplies.water and supplies.
Hong Kong
Hong Kong Monetary Authority
March 3: LoweredLowered its base rate charged through the overnight discount window by its base rate charged through the overnight discount window by
50 basis points to 1.5% after the U.S. Federal50 basis points to 1.5% after the U.S. Federal ~~Reserve delivered~~ Reserve delivered a rate cut of the same a rate cut of the same
margin. margin.
March 16: LoweredLowered its base rate charged through the overnight discount window to its base rate charged through the overnight discount window to
0.86%, after the U.S. Federal0.86%, after the U.S. Federal Reserve deliveredReserve delivered a rate cut. It also cut the level of a rate cut. It also cut the level of
capital buffers it requirescapital buffers it requires financial institutions to hold to 1% from 2% of their risk-financial institutions to hold to 1% from 2% of their risk-
weighted assets to help companies and lendersweighted assets to help companies and lenders weather the impact of the COVID-19 weather the impact of the COVID-19
outbreak. outbreak.

Government of Hong Kong
February 26: Announced a HK$120 bil ion ($15.4 bil ion) relief Announced a HK$120 bil ion ($15.4 bil ion) relief package as part of package as part of
its 2020-2021 budget, including a payment of HK$10,000 ($1,200) to each permanent its 2020-2021 budget, including a payment of HK$10,000 ($1,200) to each permanent
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resident of the city 18 or older, paying one month’s rent for people living in public resident of the city 18 or older, paying one month’s rent for people living in public
housing, cutting payrol ,housing, cutting payrol , income,income, property, and business taxes, low-interest, property, and business taxes, low-interest,
government-guaranteed loans for businesses,government-guaranteed loans for businesses, and an extra month’s worth of and an extra month’s worth of
payments to people col ecting old-age or disability benefits. payments to people col ecting old-age or disability benefits.
Hungary
Hungarian National Bank
March 16: Announced emergency Announced emergency steps to help businesses,steps to help businesses, boosting the range of boosting the range of
col ateralcol ateral it accepts from banks and it accepts from banks and ~~cal ing~~calling on lenders on lenders to apply a loan repayment to apply a loan repayment
moratoriummoratorium for firmsfor firms hit by the coronavirushit by the coronavirus ~~economic fal out~~ economic fallout. (It said in a statement . (It said in a statement
that performingthat performing corporate loans in domesticcorporate loans in domestic banks’ balance sheets totaled closebanks’ balance sheets totaled close to to
3.6 tril ion3.6 tril ion forints, and that it would apply a 30% haircut on those, boosting the range forints, and that it would apply a 30% haircut on those, boosting the range
of col ateralsof col aterals that can be used and thus also lifting banks’ lending potential by more that can be used and thus also lifting banks’ lending potential by more
than 2.5 tril ionthan 2.5 tril ion forints ($8.10 bil ion)). It also offered to inject forint liquidity into the forints ($8.10 bil ion)). It also offered to inject forint liquidity into the
banking systembanking system via foreign exchange swaps. via foreign exchange swaps.
March 18: Urged domestic Urged domestic banks to introduce a moratoriumbanks to introduce a moratorium on household loan on household loan
repayments considering the “extraordinary situation” due to the coronavirus crisis, repayments considering the “extraordinary situation” due to the coronavirus crisis,
and that if banks did not bring in the measure,and that if banks did not bring in the measure, the Bank would ask the government to the Bank would ask the government to
pass a decreepass a decree enforcing it. It also announced that it was considering restarting its enforcing it. It also announced that it was considering restarting its
mortgage note buying program to provide moremortgage note buying program to provide more long-term liquidity for the banking long-term liquidity for the banking
systemsystem and reduce the financing costs of household loans. and reduce the financing costs of household loans.
March 24: Launched new measures Launched new measures to boost liquidity and flagged further steps if to boost liquidity and flagged further steps if
needed to prevent long-term damage to the economy fromneeded to prevent long-term damage to the economy from the coronavirus the coronavirus
pandemic. It moved to pump morepandemic. It moved to pump more money into the banking system by introducing a money into the banking system by introducing a
massivemassive fixed-rate col ateralizedfixed-rate col ateralized loan instrument. Lending loan instrument. Lending ~~wil~~ will be provided to banks at be provided to banks at
a fixed interest rate in unlimited quantity, to support bank lending and also a fixed interest rate in unlimited quantity, to support bank lending and also
government bond purchases. It also releasedgovernment bond purchases. It also released domestic lendersdomestic lenders from the requirement from the requirement
to hold a certain level of cash as reserves. to hold a certain level of cash as reserves.
April 1: Announced its col ateralizedAnnounced its col ateralized loan tenders,loan tenders, offering liquidity to banks at a offering liquidity to banks at a
fixed rate of 0.9% on various maturities,fixed rate of 0.9% on various maturities, and that it would offer them to domestic and that it would offer them to domestic
open-ended investmentopen-ended investment funds, in orderfunds, in order to support the government securitiesto support the government securities market market
and the real estate marketand the real estate market and help offset the and help offset the ~~fal out~~fallout from the coronavirus pandemic. from the coronavirus pandemic.

Government of Hungary
April 4: Created a $2 bil ion Created a $2 bil ion special fund to aid the fight against COVID-19 and it wil special fund to aid the fight against COVID-19 and it wil
include contributions from banks and foreign retailers.include contributions from banks and foreign retailers. Hungarian banks wilHungarian banks wil be be
expected to pay 55 bil ion forints ($163 mil ion)expected to pay 55 bil ion forints ($163 mil ion) in the fund this year, with in the fund this year, with
multinational retailersmultinational retailers adding 36 bil ionadding 36 bil ion forints. Local governments wilforints. Local governments wil have to divert have to divert
vehicle taxes amounting to a total of 34 bil ion forints to the fund, while political vehicle taxes amounting to a total of 34 bil ion forints to the fund, while political
parties wilparties wil pay half of their central budget revenue to the fund for a total of 1.2 pay half of their central budget revenue to the fund for a total of 1.2
bil ion forints. bil ion forints.
April 6: Announced a stimulusAnnounced a stimulus package, which includes subsidized loans to Hungarian package, which includes subsidized loans to Hungarian
companies and funds to preservecompanies and funds to preserve jobs. It would amount to 18%-20% of gross jobs. It would amount to 18%-20% of gross
domesticdomestic product (GDP), including National Bank of Hungary programs.product (GDP), including National Bank of Hungary programs. The prime The prime
ministerminister said that the government was ready to pay somesaid that the government was ready to pay some of the wage costs of of the wage costs of
companies forced to cut working hours, would support investmentscompanies forced to cut working hours, would support investments with 450 bil ion with 450 bil ion
forints ($1.3 bil ion),forints ($1.3 bil ion), and would provide targeted support for sectors such as tourism, and would provide targeted support for sectors such as tourism,
the food industry, and construction. Subsidized loans to companies wilthe food industry, and construction. Subsidized loans to companies wil total more total more
than 2 tril ionthan 2 tril ion forints, while pensionersforints, while pensioners wil get one month’s extra pension to be wil get one month’s extra pension to be
disbursed in four tranches fromdisbursed in four tranches from early 2021. early 2021.
Iceland
The Central Bank of Iceland
March 11: Cut its benchmark interest rate by 50 basis points to 2.25%, as it tries Cut its benchmark interest rate by 50 basis points to 2.25%, as it tries to
~~al eviate~~ to alleviate the potential impact of the COVID-19 on its tourism-dependent economy.the potential impact of the COVID-19 on its tourism-dependent economy. It It
wilwil also lower deposit institutions’ average reservealso lower deposit institutions’ average reserve ~~requirement~~ requirement to 0% fromto 0% from 1% to 1% to
ease banks’ liquidity positions. ease banks’ liquidity positions.
March 18: Cut its key interest rate for the second timeCut its key interest rate for the second time in a week by 50 basis points in a week by 50 basis points
to 1.75% and reduced the banks’ countercyclical capital buffer to 0% fromto 1.75% and reduced the banks’ countercyclical capital buffer to 0% from 2%. 2%.
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March 23: Announced that it would start buying up treasury bonds in order to boost March 23: Announced that it would start buying up treasury bonds in order to boost
liquidity and support government plans to increase spending to help the economy liquidity and support government plans to increase spending to help the economy
weather the COVID-19 outbreak. weather the COVID-19 outbreak.
Government of Iceland
March 10: Announced an action plan to respond to the economic impact of COVID-Announced an action plan to respond to the economic impact of COVID-
19, which includes deferring19, which includes deferring taxes and levies,taxes and levies, providing temporary reliefproviding temporary relief to the to the
tourismtourism industry, and accelerating ongoing and planned infrastructure projects. industry, and accelerating ongoing and planned infrastructure projects.
March 21: Announced a 230-bil ion-krona ($1.6 bil ion) package (8% of gross Announced a 230-bil ion-krona ($1.6 bil ion) package (8% of gross
domesticdomestic product) to cushion the impact of COVID-19 on the economy.product) to cushion the impact of COVID-19 on the economy. It includes It includes
state guarantees on bridge loans to businessesstate guarantees on bridge loans to businesses and the payment of as much as 75% of and the payment of as much as 75% of
an employee’san employee’s lost salarieslost salaries over the next two-and-a-half months. In addition, public over the next two-and-a-half months. In addition, public
projects worth 20 bil ion krona projects worth 20 bil ion krona ~~wil~~ will be moved forward to this year and tax breaks for be moved forward to this year and tax breaks for
banks wilbanks wil be implementedbe implemented sooner than sooner than ~~original y~~ originally planned. planned.
India
Reserve Bank of India
March 12: Announced a $2 bil ion injection Announced a $2 bil ion injection into the foreign-exchange marketinto the foreign-exchange market to to
support the rupee. support the rupee.
March 13: Announced a plan to add liquidity through short-termAnnounced a plan to add liquidity through short-term repurchase repurchase
operations. operations.
March 14: Plans to infuse 250 bil ionPlans to infuse 250 bil ion rupees ($3.4 bil ion) into the system through rupees ($3.4 bil ion) into the system through
short-term repurchase operation. short-term repurchase operation.
March 19: Announced that it wil buy bonds on the open marketAnnounced that it wil buy bonds on the open market for a total of 100 for a total of 100
bil ion Indian rupees ($1.35 bil ion) due to mature between 2022 and 2025 to try to bil ion Indian rupees ($1.35 bil ion) due to mature between 2022 and 2025 to try to
keep keep al all market segmentsmarket segments liquid and stable. liquid and stable.
March 27: Lowered Lowered its benchmark repo rate by 75 basis points to 4.40% and its benchmark repo rate by 75 basis points to 4.40% and
announced severalannounced several other steps to tackle the impactother steps to tackle the impact of COVID-19 on various of COVID-19 on various
industries fromindustries from the lockdown,the lockdown, some of which include cutting banks’ cash reserve some of which include cutting banks’ cash reserve
ratio and targeted long term repos operations.ratio and targeted long term repos operations. The reverseThe reverse repo rate was reduced by repo rate was reduced by
90 basis points to 4%. 90 basis points to 4%.

Government of India
March 15: Pledged $10 mil ionPledged $10 mil ion towards South Asian Associationtowards South Asian Association for Regional for Regional
Cooperation (SAARC) “COVID-19 emergencyCooperation (SAARC) “COVID-19 emergency fund.” fund.”
March 15: Is reportedlyIs reportedly “pushing” state-run banks to approve new loans amounting “pushing” state-run banks to approve new loans amounting
to 500 bil ion-600 bil ion rupees by the end of March. to 500 bil ion-600 bil ion rupees by the end of March.
March 26: Announced a 1.7-tril ion-rupee Announced a 1.7-tril ion-rupee ($22.6 bil ion) economic($22.6 bil ion) economic stimulus plan stimulus plan
providing direct cash transfers and food security measuresproviding direct cash transfers and food security measures to give reliefto give relief to mil ionsto mil ions of of
poor people hit by a nationwide lockdown overpoor people hit by a nationwide lockdown over COVID-19. It wil provide direct cash COVID-19. It wil provide direct cash
transfers to 200 mil iontransfers to 200 mil ion women and the elderly,women and the elderly, hand out free cooking gas cylinders hand out free cooking gas cylinders
to 83 mil ionto 83 mil ion poor families,poor families, and help feed about 800 mil ionand help feed about 800 mil ion poor people over the poor people over the
next three months by distributing 5 kilogramsnext three months by distributing 5 kilograms of staple food-grains wheat or riceof staple food-grains wheat or rice for for
each person free of cost, with a kilogrameach person free of cost, with a kilogram of pulses for every low-incomeof pulses for every low-income family.family. The The
government outlined plans for medicalgovernment outlined plans for medical insurance cover of 5 mil ioninsurance cover of 5 mil ion rupees ($66,000) rupees ($66,000)
for every frontline health worker,for every frontline health worker, from doctors,from doctors, nurses and paramedics to those nurses and paramedics to those
involved in sanitary services. involved in sanitary services.
Indonesia
Bank Indonesia (Bank Sentral Republik Indonesia)
February 20: Cut the seven-day reverseCut the seven-day reverse repurchase rate by 25 basis points to repurchase rate by 25 basis points to
4.75%. 4.75%.
March 19: Cut the seven-day reverseCut the seven-day reverse repurchase rate by 25 basis points to 4.50% repurchase rate by 25 basis points to 4.50%
and indicated that it wil intensify intervention to ensure market confidence and and indicated that it wil intensify intervention to ensure market confidence and
liquidity. It has purchased government bonds to combat capital outflows amid the liquidity. It has purchased government bonds to combat capital outflows amid the
COVID-19 epidemic,COVID-19 epidemic, including 27 tril ionincluding 27 tril ion rupiah ($2 bil ion) on February 20 and 6 rupiah ($2 bil ion) on February 20 and 6
tril iontril ion rupiah ($405 mil ion)rupiah ($405 mil ion) on March 13, adding to 8 tril ionon March 13, adding to 8 tril ion rupiah of bonds rupiah of bonds
purchased March 12.purchased March 12.
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March 25: Announced with the country’s financial regulator that currency market Announced with the country’s financial regulator that currency market
and stock trading hours wiland stock trading hours wil be limitedbe limited next weeknext week as part of efforts to contain the as part of efforts to contain the
spread of COVID-19. spread of COVID-19.

Government of Indonesia
February 25: Announced a stimulus package worth 10.3 tril ion Announced a stimulus package worth 10.3 tril ion rupiah ($742.6 rupiah ($742.6
mil ion)mil ion) to protect its economy from the impact of the COVID-19 outbreak. It to protect its economy from the impact of the COVID-19 outbreak. It
includes 4.6 tril ionincludes 4.6 tril ion rupiah in subsidiesrupiah in subsidies for basic needs for poor households, 1.5 for basic needs for poor households, 1.5
tril iontril ion rupiah for the state property financing program,rupiah for the state property financing program, 443.4 bil ion rupiah for 443.4 bil ion rupiah for
airlinesairlines and travel agents, 298.5 bil ion rupiah to bring in foreign tourists,and travel agents, 298.5 bil ion rupiah to bring in foreign tourists, 3.3 tril ion 3.3 tril ion
rupiah cover for rupiah cover for ~~shortfal s~~ shortfalls in regional budgets, and fiscal transfers (147 bil ion rupiah). in regional budgets, and fiscal transfers (147 bil ion rupiah).
March 13: Announced a 120 tril ion Announced a 120 tril ion rupiah ($8.1 bil ion) stimulus package to support rupiah ($8.1 bil ion) stimulus package to support
the economy, of which 22.9 tril ionthe economy, of which 22.9 tril ion rupiah wil be tax breaks, lasting six months rupiah wil be tax breaks, lasting six months
starting in April.starting in April. The government is also exempting companies in 19 manufacturing The government is also exempting companies in 19 manufacturing
sectorssectors from having to pay import taxes, whilefrom having to pay import taxes, while giving them a 30% corporate tax giving them a 30% corporate tax
discount, relaxing rules for exports (e.g.,discount, relaxing rules for exports (e.g., ~~fisheries~~ fisheries and forestry products) and imports and forestry products) and imports
(e.g., steel,(e.g., steel, sugar, flour and salt), and easing rulessugar, flour and salt), and easing rules on loan restructuring for on loan restructuring for ~~smal -~~ small- and and
medium-sizedmedium-sized companies. companies.
March 17: Ordered the Finance Minister to divert 40 tril ion Ordered the Finance Minister to divert 40 tril ion rupiah ($2.7 bil ion) rupiah ($2.7 bil ion)
from the non-urgent government budget to increasefrom the non-urgent government budget to increase spending in programs that could spending in programs that could
provide direct support to household consumption or increase people’sprovide direct support to household consumption or increase people’s purchasing purchasing
power. power.
March 31: Announced a national public health emergency and that it would spend Announced a national public health emergency and that it would spend
405.1 tril ion405.1 tril ion rupiah ($24.85 bil ion) morerupiah ($24.85 bil ion) more on COVID-19 response,on COVID-19 response, social welfare social welfare
programs,programs, and economicand economic stimulus,stimulus, including a 3 percentage point cut in corporate tax including a 3 percentage point cut in corporate tax
rates to 22%. rates to 22%.
Iran
Central Bank of Iran
February/March: Indicated that it would help Indicated that it would help ~~smal businesses~~ small businesses affected by the affected by the
COVID-19 outbreak by providing tax breaks and COVID-19 outbreak by providing tax breaks and ~~al owing~~ allowing defaults on bank loans for defaults on bank loans for
severalseveral months. months.
March 12: Requested $5 bil ion emergencyRequested $5 bil ion emergency funding from the International Monetary funding from the International Monetary
Fund’s Rapid Financing Instrument to help Iran fight the COVID-19 outbreak. Fund’s Rapid Financing Instrument to help Iran fight the COVID-19 outbreak.
March 17: ~~Al ocated~~Allocated at least 250 mil ion at least 250 mil ion euro to import medicineeuro to import medicine and medical and medical
equipment requiredequipment required to fight COVID-19. to fight COVID-19.

Government of Iran
March 12: Asked the United Nations to Asked the United Nations to ~~al ocate resources~~ allocate resources to help it tackleto help it tackle COVID-COVID-
19 and facilitate imports19 and facilitate imports as a way of boosting the country’sas a way of boosting the country’s sanctions-hit healthcare sanctions-hit healthcare
system. system.
March 15: Announced a seriesAnnounced a series of banking, welfare and tax reliefof banking, welfare and tax relief ~~measures~~ measures to to
support businesses and familiessupport businesses and families as the COVID-19 outbreak puts severeas the COVID-19 outbreak puts severe strain on the strain on the
economy.economy. Employees wilEmployees wil be able to defer health insurance, tax and utility bil be able to defer health insurance, tax and utility bil
payments for the next three months, while the 3 mil ionpayments for the next three months, while the 3 mil ion poorest Iranians wilpoorest Iranians wil receive receive
an additional cash subsidy starting March 17, 2020. an additional cash subsidy starting March 17, 2020.
March 23: The European Union’s High Representative The European Union’s High Representative of the Union for Foreign of the Union for Foreign
Affairs and Security Policy (Josep Affairs and Security Policy (Josep ~~Borrel )~~ Borrell) announced that the EU would provide 20 announced that the EU would provide 20
mil ionmil ion ~~euros~~ euros in humanitarian aid to Iran to help in humanitarian aid to Iran to help ~~al eviate~~ alleviate the COVID-19 and support the COVID-19 and support
Iran’s request for IMF financial help. Iran’s request for IMF financial help.
March 26: President Hassan Rouhani wrote to Supreme President Hassan Rouhani wrote to Supreme Leader Ayatol ah Ali Leader Ayatol ah Ali
Khamenei requesting permissionKhamenei requesting permission to withdraw $1 bil ionto withdraw $1 bil ion ~~from~~ from the country’s sovereign the country’s sovereign
wealth fund (the National Developmentwealth fund (the National Development Fund) to support the healthcare system, Fund) to support the healthcare system,
which is overstretched by the COVID-19 outbreak. which is overstretched by the COVID-19 outbreak.
March 28: Announced that it would Announced that it would ~~al ocate~~allocate 20% of its annual state budget to 20% of its annual state budget to
fighting the pandemic in the country. The budget fighting the pandemic in the country. The budget ~~al ocation~~allocation, amounting to about 1,000 , amounting to about 1,000
tril iontril ion rials,rials, would include grants and low-interestwould include grants and low-interest loans to those affected by COVID-loans to those affected by COVID-
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19, Rouhani said. While 19, Rouhani said. While ~~the al ocated~~ the allocated amount is worth some amount is worth some $6.3 bil ion at the rial’s $6.3 bil ion at the rial’s
free marketfree market exchange rate of about 160,000 rials per dol ar,exchange rate of about 160,000 rials per dol ar, the government may the government may
decide to decide to ~~al ocate some~~ allocate some of the funds at the official rate of 42,000 (which is used to of the funds at the official rate of 42,000 (which is used to
subsidize food and medicine). subsidize food and medicine).
Ireland
March 9: The government announced that it wil set aside 3 bil ion The government announced that it wil set aside 3 bil ion euros ($3.44 euros ($3.44
bil ion) to provide additional funding to the health servicebil ion) to provide additional funding to the health service (435 mil ion(435 mil ion euros), boost euros), boost
workers’workers’ sick pay and benefits (2.4 bil ion euros),sick pay and benefits (2.4 bil ion euros), and offer liquidity assistance to and offer liquidity assistance to
businessesbusinesses affected (200 mil ionaffected (200 mil ion euros). euros).
Israel
Bank of Israel
March 18: Announced it would Announced it would ~~al ocate~~allocate up to $15 bil ion for swap transactions up to $15 bil ion for swap transactions
between currenciesbetween currencies for domestic banks, part of a movefor domestic banks, part of a move aimed at shoring up the aimed at shoring up the
IsraeliIsraeli economy amid the COVID-19 pandemic. economy amid the COVID-19 pandemic.
April 6: Cut its benchmark interest rate to 0.1% from 0.25%, its first rate cut in five Cut its benchmark interest rate to 0.1% from 0.25%, its first rate cut in five
years, expanded its repo transactions so that the agreementsyears, expanded its repo transactions so that the agreements can include corporate can include corporate
bonds—in addition to government bonds—as security, and wil provide loans to bonds—in addition to government bonds—as security, and wil provide loans to
banks for a termbanks for a term of three years (with a fixed interestof three years (with a fixed interest rate of 0.1%) with the goal of rate of 0.1%) with the goal of
increasing the supply of bank credit to increasing the supply of bank credit to ~~smal~~ small businesses.businesses. The size of the plan wil be 5 The size of the plan wil be 5
bil ion shekels. bil ion shekels.

Government of Israel
March 9: The Finance Ministry announced that it was opening a 4 bil ion-shekel The Finance Ministry announced that it was opening a 4 bil ion-shekel
credit line for banks to lend money to credit line for banks to lend money to ~~smal~~ small and medium-sizedand medium-sized businesses facing a businesses facing a
cash crisiscash crisis with a high-level government guarantee. with a high-level government guarantee.
March 11: Wil Wil expand an aid package (for a second time) to help the country deal expand an aid package (for a second time) to help the country deal
with the COVID-19 outbreak by 6 bil ion shekelswith the COVID-19 outbreak by 6 bil ion shekels to a total of 10 bil ionto a total of 10 bil ion ~~shekels~~ shekels ($2.8 ($2.8
bil ion).bil ion). Of that, 8 bil ion shekelsOf that, 8 bil ion shekels wil be in a fund to provide cheap loans to wil be in a fund to provide cheap loans to
businesses,businesses, 1 bil ion shekels1 bil ion shekels ~~wil~~ wil boost the health system by increasing medicine boost the health system by increasing medicine
stocks and preparing hospitals to receivestocks and preparing hospitals to receive a larger number of patients, and 1 bil ion wil a larger number of patients, and 1 bil ion wil
be earmarkedbe earmarked for needs such as the policefor needs such as the police force. force.
March 16: WilWil expand its aid package (for a third time) to help businessesexpand its aid package (for a third time) to help businesses hurt by hurt by
the COVID-19 crisisthe COVID-19 crisis by another 5 bil ion shekelsby another 5 bil ion shekels ($1.3 bil ion). ($1.3 bil ion).
March 30: Announced that it wil spend 80 bil ion Announced that it wil spend 80 bil ion ~~shekels~~ shekels ($22 bil ion) to help the ($22 bil ion) to help the
economy weather the COVID-19 crisis—70 bil ioneconomy weather the COVID-19 crisis—70 bil ion ~~shekels~~ shekels in addition to 10 bil ion in addition to 10 bil ion
already promisedalready promised to boost welfareto boost welfare ~~services~~ services for those who have lost their jobs or are for those who have lost their jobs or are
on unpaid leave and to assiston unpaid leave and to assist the private sector.the private sector. It includes a 20-bil ion-shekel social It includes a 20-bil ion-shekel social
safety net, with stipends for those who lost income; 40 bil ionsafety net, with stipends for those who lost income; 40 bil ion ~~shekels earmarked to~~
shekels earmarked to assist businessesassist businesses with tax breaks,with tax breaks, loans, and other services;loans, and other services; about 10 bil ion for the about 10 bil ion for the
healthcare system; and nearly 8 bil ionhealthcare system; and nearly 8 bil ion wil be spent to speed up the recovery. wil be spent to speed up the recovery.
Italy
Government of Italy
March 11: Announced two packages worth 25 bil ion Announced two packages worth 25 bil ion euros ($28.3 bil ion):euros ($28.3 bil ion): A A
package worth 12 bil ionpackage worth 12 bil ion euros wileuros wil provide extra funding for the health system as provide extra funding for the health system as
~~wel~~ well as a mix of measuresas a mix of measures to help companies and households, including freezing tax to help companies and households, including freezing tax
and loan payments and boosting unemployment benefits to ensure no jobs were lost. and loan payments and boosting unemployment benefits to ensure no jobs were lost.
The remainderThe remainder ~~wil~~ wil be a reservebe a reserve to pay for any further measures.to pay for any further measures. The government The government
also indicated that payments on mortgagesalso indicated that payments on mortgages wil be suspended across Italy. ABI, Italy’s wil be suspended across Italy. ABI, Italy’s
banking lobby, said lendersbanking lobby, said lenders would offer debt moratoriumswould offer debt moratoriums ~~to smal firms~~ to small firms and and
households grappling with the economichouseholds grappling with the economic ~~fal out~~ fallout from the virus. from the virus.
April 6: Announced a new emergency decree Announced a new emergency decree aimed at granting liquidity and bank aimed at granting liquidity and bank
loans worth moreloans worth more than 400 bil ion euros to companies hit by COVID-19. The new than 400 bil ion euros to companies hit by COVID-19. The new
legislation,legislation, combined with a previous stimuluscombined with a previous stimulus package in March, would package in March, would ~~al ow~~allow banks banks
to offer credit totaling over 750 bil ion euros ($809.78 bil ion). to offer credit totaling over 750 bil ion euros ($809.78 bil ion).
Japan
Bank of Japan
March 16: Announced that it would (1) double its upper limitAnnounced that it would (1) double its upper limit of annual purchases of of annual purchases of
exchange traded funds to 12 tril ionexchange traded funds to 12 tril ion yen ($112.46 bil ion) and of real-estate yen ($112.46 bil ion) and of real-estate
investment trusts to 180 bil ioninvestment trusts to 180 bil ion yen ($1.7 bil ion) per year, (2) expand its upper limit yen ($1.7 bil ion) per year, (2) expand its upper limit
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of its corporate bond balance and commercial of its corporate bond balance and commercial paper balance by 1 tril ionpaper balance by 1 tril ion yen ($9.5 yen ($9.5
bil ion) each, and (3) start a lending program for commercialbil ion) each, and (3) start a lending program for commercial banks, providing them banks, providing them
with one-year loans in exchange for corporate col ateralwith one-year loans in exchange for corporate col ateral worth 8 tril ionworth 8 tril ion yen ($75.6 yen ($75.6
bil ion). bil ion).
Government of Japan
February 13: Unveiled a set of measuresUnveiled a set of measures worth 15.3 bil ionworth 15.3 bil ion yen ($140 mil ion)yen ($140 mil ion) to to
fight the spread of COVID-19; secured 500 bil ion yen ($4.7 bil ion) for emergency fight the spread of COVID-19; secured 500 bil ion yen ($4.7 bil ion) for emergency
lending and loan guarantees at the Japan Finance Corporation and other institutions lending and loan guarantees at the Japan Finance Corporation and other institutions
for for ~~smal businesses~~ small businesses hit hard by the virus outbreak. hit hard by the virus outbreak.
March 10: Unveiled a second package of measuresUnveiled a second package of measures totaling 430.8 bil iontotaling 430.8 bil ion yen ($4.1 yen ($4.1
bil ion) in spending to cope with the bil ion) in spending to cope with the ~~fal out~~fallout of the COVID-19 outbreak (focusing on of the COVID-19 outbreak (focusing on
support to support to ~~smal~~ small and mid-sized firms)and mid-sized firms) and boosted to 1.6 tril ionand boosted to 1.6 tril ion yen ($15.1 bil ion) its yen ($15.1 bil ion) its
special financing for special financing for ~~smal -~~ small- and mid-size firmsand mid-size firms hit by the virus, up fromhit by the virus, up from 500 bil ion yen. 500 bil ion yen.
March 23: Announced that it is working on a package of measuresAnnounced that it is working on a package of measures to combat the to combat the
widening economicwidening economic ~~fal out~~ fallout from the COVID-19 that wil involve direct fiscal spending from the COVID-19 that wil involve direct fiscal spending
exceeding 15 tril ionexceeding 15 tril ion yen ($137 bil ion). Including loans and other steps that does not yen ($137 bil ion). Including loans and other steps that does not
include direct spending, the size of the package may exceed 30 tril ioninclude direct spending, the size of the package may exceed 30 tril ion yen. yen.
April 6: Announced a 108 tril ion Announced a 108 tril ion yen ($989 bil ion,yen ($989 bil ion, equivalent to 20% of gross equivalent to 20% of gross
domesticdomestic product) stimulus package, Japan’s largest ever,product) stimulus package, Japan’s largest ever, to rescue the COVID-19-hit to rescue the COVID-19-hit
economy.economy. It wilIt wil include cash handouts worth 6 tril ioninclude cash handouts worth 6 tril ion yen for households and yen for households and ~~smal~~
small businessesbusinesses hit by the virus and offers businesseshit by the virus and offers businesses ~~deferrals~~ deferrals on tax and socialon tax and social service service
costs worth 26 tril ioncosts worth 26 tril ion yen. The first phase of the package aims to stop job lossesyen. The first phase of the package aims to stop job losses and and
bankruptcies, while a second round of aid, after the virus is contained, wil try to bankruptcies, while a second round of aid, after the virus is contained, wil try to
support a V-shaped economic recovery. support a V-shaped economic recovery.
Kazakhstan
National Bank of Kazakhstan
April 3: Cut its policy rate to 9.5% from 12.0% in an unscheduled move aimed at Cut its policy rate to 9.5% from 12.0% in an unscheduled move aimed at
boosting economicboosting economic growth. growth.

Government of Kazakhstan
March 23: The president ordered state-owned companies to start The president ordered state-owned companies to start ~~sel ing~~ selling part of part of
their foreign currency revenue on the domestictheir foreign currency revenue on the domestic market to support the local tenge market to support the local tenge
currency (and to pay out up to 100% of last year’scurrency (and to pay out up to 100% of last year’s profits in dividends) in orderprofits in dividends) in order to to
soften the impact of the oil price crash and the COVID-19 outbreak on the economy. soften the impact of the oil price crash and the COVID-19 outbreak on the economy.
He also ordered a standstil on bank loan repayments by individuals and He also ordered a standstil on bank loan repayments by individuals and ~~smal -~~ small- and and
medium-sizedmedium-sized businesses for the duration of the state of emergency,businesses for the duration of the state of emergency, announced that announced that
the government would pay 42,500 tenge ($95) per month to people who have lost the government would pay 42,500 tenge ($95) per month to people who have lost
their source of income,their source of income, was delaying tax payments for was delaying tax payments for ~~smal~~ small businesses,businesses, and stood and stood
ready to more than tripleready to more than triple spending on a program to provide temporaryspending on a program to provide temporary employment employment
through infrastructure maintenance and construction projects.through infrastructure maintenance and construction projects. Together with soft Together with soft
loan program and other spending, the volumeloan program and other spending, the volume of the stimulus package is expected to of the stimulus package is expected to
reach $10 bil ion. reach $10 bil ion.
April 2: Announced that it plans to borrow $3 bil ion on foreign capital markets Announced that it plans to borrow $3 bil ion on foreign capital markets to to
finance its budget deficit this year,finance its budget deficit this year, due to the col apsedue to the col apse in energy prices and the in energy prices and the
additional stimulusadditional stimulus spending amid the COVID-19 outbreak. spending amid the COVID-19 outbreak.
Kenya
Central Bank of Kenya
March 23: Cut its benchmark lending rate by 100 basis points to 7.25% and lowered Cut its benchmark lending rate by 100 basis points to 7.25% and lowered
the cash reservethe cash reserve ratio for commercialratio for commercial banks to 4.25% from 5.25%. The movebanks to 4.25% from 5.25%. The move to to
lowerlower the cash ratio is expected to releasethe cash ratio is expected to release an extra 35.2 bil ion shil ingsan extra 35.2 bil ion shil ings ($330.83 ($330.83
mil ion)mil ion) for banks to lend to customersfor banks to lend to customers trying to deal with the outbreak. trying to deal with the outbreak.

Government of Kenya
March 16: The World The World Bank announced that it is making $60 mil ionBank announced that it is making $60 mil ion available to available to
Kenya’s health sector to help it deal with the COVID-19 outbreak. Kenya’s health sector to help it deal with the COVID-19 outbreak.
March 24: Announced that it wil seek Announced that it wil seek ~~emergency~~ emergency assistance fromassistance from the IMF of up to the IMF of up to
$350 mil ion,$350 mil ion, and $750 mil ionand $750 mil ion from the Worldfrom the World Bank, releaseBank, release 49 bil ion49 bil ion shil ings ($460 shil ings ($460
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mil ion) mil ion) to pay pending bil sto pay pending bil s to suppliers,to suppliers, and expedite the payment of closeand expedite the payment of close to 10 to 10
bil ion ($94 mil ion)bil ion ($94 mil ion) shil ings in value-added tax refunds to businessesshil ings in value-added tax refunds to businesses in the next two in the next two
to three months. to three months.
March 25: Announced that the value-added tax rate would be cut to 14% from Announced that the value-added tax rate would be cut to 14% from 16% 16%
and corporation tax would be reduced to 25% fromand corporation tax would be reduced to 25% from 30% under plans scheduled to 30% under plans scheduled to
come into force by April,come into force by April, and that there would be 100% tax reliefand that there would be 100% tax relief for Kenyans for Kenyans
earning a monthly income of up to 24,000 Kenyan Shil ingsearning a monthly income of up to 24,000 Kenyan Shil ings ($226) to increase($226) to increase their their
disposable income. disposable income.
Kuwait
Central Bank of Kuwait
March 16: Cut by 100 basis points its deposit rate to 1.5% and its overnight, one- Cut by 100 basis points its deposit rate to 1.5% and its overnight, one-
week,week, and one-month repo rates to 1%, 1.25%, and 1.75%, respectively. and one-month repo rates to 1%, 1.25%, and 1.75%, respectively.
April 2: Announced a stimulusAnnounced a stimulus package to support vital sectors and package to support vital sectors and ~~smal~~ small and and
mediummedium ~~enterprises~~ enterprises (SMEs) amid the (SMEs) amid the ~~fal out from~~ fallout from the COVID-19 pandemic. It cut the COVID-19 pandemic. It cut
capital adequacy requirementscapital adequacy requirements by 2.5%, eased the riskby 2.5%, eased the risk weighting for SMEs to 25% weighting for SMEs to 25%
from 75%, raised the maximumfrom 75%, raised the maximum lending limitlending limit to 100% fromto 100% from 90%, and increased90%, and increased the the
maximummaximum financing for residentialfinancing for residential real estate developmentsreal estate developments to the value of the to the value of the
property or the cost of development. The measuresproperty or the cost of development. The measures are expected to raiseare expected to raise banks’ banks’
lending capacity by 5 bil ion dinars ($16 bil ion). lending capacity by 5 bil ion dinars ($16 bil ion).

Government of Kuwait
April 1: Announced measures Announced measures ~~aimed~~ aimed at shoring up its economy against the pandemic, at shoring up its economy against the pandemic,
including soft long-term loans from local banks to provide liquidity for including soft long-term loans from local banks to provide liquidity for ~~smal~~ small and and
medium-sizedmedium-sized ~~enterprises~~ enterprises and directing government agencies to pay obligations to the and directing government agencies to pay obligations to the
private sector as soon as possible. private sector as soon as possible.
Malaysia
Government of Malaysia
February 27: Announced the “Economic Stimulus Announced the “Economic Stimulus Package 2020” to mitigate the Package 2020” to mitigate the
economiceconomic impact of COVID-19, improveimpact of COVID-19, improve the cash flow of affected businesses, the cash flow of affected businesses,
stimulate private consumption, and accelerate domesticstimulate private consumption, and accelerate domestic investment activities.investment activities. It It
includes exempting accommodation servicesincludes exempting accommodation services from servicesfrom services tax, providing salestax, providing sales tax tax
exemptions,exemptions, and lifting duties on certain imports. and lifting duties on certain imports.
March 27: Announced a stimulusAnnounced a stimulus package worth 250 bil ion ringgit ($58.28 bil ion), package worth 250 bil ion ringgit ($58.28 bil ion),
its second in a month, to help cushion the economic blow from the pandemic. It its second in a month, to help cushion the economic blow from the pandemic. It
includes a 25 bil ion ringgit direct fiscal injection by the government aimed at helping includes a 25 bil ion ringgit direct fiscal injection by the government aimed at helping
familiesfamilies and business owners; one-off payments and discounts on utilitiesand business owners; one-off payments and discounts on utilities for people for people
whose livelihoodswhose livelihoods have been affected; 1 bil ionhave been affected; 1 bil ion ringgit for a food security fund; and a ringgit for a food security fund; and a
50 bil ion50 bil ion ringgit loan scheme for larger companies,ringgit loan scheme for larger companies, which wil offer guarantees of up which wil offer guarantees of up
to 80% of the sum borrowed to shore up working capital in the corporate sector. to 80% of the sum borrowed to shore up working capital in the corporate sector.
Mauritius
March 10: The Bank of Mauritius cut its key repo rate by 50 basis points to 2.85% The Bank of Mauritius cut its key repo rate by 50 basis points to 2.85%
amid the COVID-19 outbreak, which is expected to have a significant impact on the amid the COVID-19 outbreak, which is expected to have a significant impact on the
domesticdomestic economy. economy.
Mexico
Banxico (Bank of Mexico)
February 13: Cut its key rate by 25 basis points to 7.0%. Cut its key rate by 25 basis points to 7.0%.
March 19: LoweredLowered its benchmark interest rate by 50 basis points to 6.50% in an its benchmark interest rate by 50 basis points to 6.50% in an
out-of-cycle cut in a bid to support the country’s financial markets,out-of-cycle cut in a bid to support the country’s financial markets, reduced the rates reduced the rates
on its additional ordinary liquidity facility, and cut by 50 bil ionon its additional ordinary liquidity facility, and cut by 50 bil ion pesos ($2.06 bil ion) pesos ($2.06 bil ion)
the monetary regulation deposit that private banks must observe.the monetary regulation deposit that private banks must observe.
Moldova
National Bank of Moldova
March 4: Cut its main interest Cut its main interest rate by 100 basis points to 4.50%, citing the domestic rate by 100 basis points to 4.50%, citing the domestic
disinflationary trend and global economic concerns related to the COVID-19 disinflationary trend and global economic concerns related to the COVID-19
outbreak. outbreak.
March 20: Cut its main interest rate for the second timeCut its main interest rate for the second time in March to 3.25% from in March to 3.25% from
4.50% in order4.50% in order to support banking system amid marketsto support banking system amid markets ~~volatility~~ volatility due to the COVID-due to the COVID-
19 spread. 19 spread.
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Mongolia
March 11: The Central Bank of Mongolia cut its policy rate 100 basis points to The Central Bank of Mongolia cut its policy rate 100 basis points to
10.0% in response10.0% in response to increased uncertainties in connection with the spread of to increased uncertainties in connection with the spread of
COVID-19. It also loweredCOVID-19. It also lowered the reservethe reserve ~~requirement~~ requirement on banks. on banks.
Morocco
March 15: Morocco’s Morocco’s King Mohammed VI ordered the creation of a 10 bil ion-King Mohammed VI ordered the creation of a 10 bil ion-
dirham ($1 bil ion) fund to upgrade health infrastructure, help vulnerable economic dirham ($1 bil ion) fund to upgrade health infrastructure, help vulnerable economic
sectorssectors such as tourism,such as tourism, maintain jobs, and mitigatemaintain jobs, and mitigate the socialthe social ~~repercussions~~ repercussions of the of the
outbreak. outbreak.
March 17: Bank Al-Maghrib (Central Bank of the Kingdom of Morocco) Bank Al-Maghrib (Central Bank of the Kingdom of Morocco) cut its cut its
benchmark interest rate by 25 basis points to 2% in order to help shore up economic benchmark interest rate by 25 basis points to 2% in order to help shore up economic
activity fol owing a drought and the outbreak of COVID-19. activity fol owing a drought and the outbreak of COVID-19.
Netherlands
Government of the Netherlands
March 12: Announced that it would expand loan guarantees for Announced that it would expand loan guarantees for ~~smal~~ small and medium and medium
sized enterprises,sized enterprises, from 50% to 75%. from 50% to 75%.
March 12: The Tax Authority wil al ow companies The Tax Authority wil al ow companies affected by COVID-19 to defer affected by COVID-19 to defer
income,income, corporate, turnover, and wage taxes for the timecorporate, turnover, and wage taxes for the time being. being.
March 17: Announced measures Announced measures to support companies,to support companies, ranging from tax ranging from tax
exemptions to having up to 90% of wages lost for workexemptions to having up to 90% of wages lost for work hour reductions paid by the hour reductions paid by the
government. government.
New Zealand
Reserve Bank of New Zealand
March 16: Cut the official cash rate by 75 basis points to a recordCut the official cash rate by 75 basis points to a record low of 0.25%, and low of 0.25%, and
pledged to keep it at this level for at least 12 months. pledged to keep it at this level for at least 12 months.
March 22: Announced that it wil purchase up NZ$30 bil ion Announced that it wil purchase up NZ$30 bil ion ($17 bil ion) of ($17 bil ion) of
government bonds in the secondary marketgovernment bonds in the secondary market over the next 12 months. It wilover the next 12 months. It wil seek to seek to
buy NZ$750 mil ionbuy NZ$750 mil ion bonds a week across a range of maturities,bonds a week across a range of maturities, via an auction via an auction
process. process.
March 24: Reduced banks’ core funding ratios to 50% from 75% to help banks make Reduced banks’ core funding ratios to 50% from 75% to help banks make
credit available. credit available.
March 30: Announced that it was deploying more Announced that it was deploying more tools to provide additional tools to provide additional
liquidity to the corporate sector and support market functioning to offset the impact liquidity to the corporate sector and support market functioning to offset the impact
of the pandemic. A new weeklyof the pandemic. A new weekly Open Market Operation—to be held each Tuesday—Open Market Operation—to be held each Tuesday—
wilwil provide liquidity in exchange for eligibleprovide liquidity in exchange for eligible corporate and asset-backed securitiescorporate and asset-backed securities by by
offering up to NZ$500 mil ionoffering up to NZ$500 mil ion ($300 mil ion)($300 mil ion) for termsfor terms out to approximately three out to approximately three
months, starting on March 31. The bank also wil offer to purchase government bonds months, starting on March 31. The bank also wil offer to purchase government bonds
maturing on May 15, 2021, for liquidity management purposes. maturing on May 15, 2021, for liquidity management purposes.

Government of New Zealand
March 16: Announced a spending package of NZ$12.1 bil ion ($7.3 bil ion), Announced a spending package of NZ$12.1 bil ion ($7.3 bil ion),
equivalent to 4% of GDP in an attempt to fight the effects of COVID-19 on the equivalent to 4% of GDP in an attempt to fight the effects of COVID-19 on the
economy; approximately NZ$5 bil ioneconomy; approximately NZ$5 bil ion ~~wil~~ wil go toward wage subsidies for businesses, go toward wage subsidies for businesses,
NZ$2.8 bil ion toward income support, NZ$2.8 bil ionNZ$2.8 bil ion toward income support, NZ$2.8 bil ion in business tax relief,in business tax relief, and and
NZ$600 mil ionNZ$600 mil ion toward the airline industry. toward the airline industry.
March 24: Announced that retailAnnounced that retail banks wil offer a six-month principal and interest banks wil offer a six-month principal and interest
payment holiday for mortgage holders and payment holiday for mortgage holders and ~~smal~~ small business customersbusiness customers whose incomes whose incomes
have been affected by the economichave been affected by the economic disruption fromdisruption from COVID-19. The government and COVID-19. The government and
the banks wil also implementthe banks wil also implement a NZ$6.25 bil ion ($3.62 bil ion) Business Finance a NZ$6.25 bil ion ($3.62 bil ion) Business Finance
Guarantee SchemeGuarantee Scheme ~~for smal~~ for small and medium-sizedand medium-sized businesses.businesses. It wilIt wil include a limitinclude a limit of of
NZ$500,000 per loan and wil apply to firmsNZ$500,000 per loan and wil apply to firms with a turnover of between with a turnover of between
NZ$250,000 and NZ$80 mil ionNZ$250,000 and NZ$80 mil ion per annum (the government wilper annum (the government wil carry 80% of the carry 80% of the
credit risk,credit risk, with the other 20% to be carried by the banks). with the other 20% to be carried by the banks).
Norway
Norges Bank
March 13: Cut its key interest rate to 1% from 1.5%, as it seeks Cut its key interest rate to 1% from 1.5%, as it seeks to counter the to counter the
economiceconomic impact of the COVID-19 pandemic. It indicated that it would offer funding impact of the COVID-19 pandemic. It indicated that it would offer funding
to banks to help counter the volatilityto banks to help counter the volatility in financial marketsin financial markets and announced that banks’ and announced that banks’
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countercyclical capital buffer would be reduced from 2.5% to 1%, to help banks countercyclical capital buffer would be reduced from 2.5% to 1%, to help banks
continue to lend money. continue to lend money.
March 20: Cut its key policy rate by 75 basis points to 0.25% from 1.0% in a bid to Cut its key policy rate by 75 basis points to 0.25% from 1.0% in a bid to
~~al eviate~~ alleviate the economicthe economic impact fromimpact from the COVID-19 outbreak. It also offered a third the COVID-19 outbreak. It also offered a third
batch of extraordinary loans to the banking industry to ensure it has enough for the batch of extraordinary loans to the banking industry to ensure it has enough for the
months ahead. months ahead.
March 30: Increased its planned issuance of government bonds this year to between Increased its planned issuance of government bonds this year to between
70 bil ion70 bil ion and 85 bil ionand 85 bil ion Norwegian crowns ($6.68 bil ion-$8.11 bil ion) fromNorwegian crowns ($6.68 bil ion-$8.11 bil ion) from an an
original plan of 55 bil ion crowns, fol owingoriginal plan of 55 bil ion crowns, fol owing the government’sthe government’s decision to offer loans decision to offer loans
worth tens of bil ions of crowns in emergency funding to companies hurt by the worth tens of bil ions of crowns in emergency funding to companies hurt by the
coronavirus outbreak. coronavirus outbreak.
March 31: Wil Wil ~~increase~~ increase further its daily purchase of Norwegian currency to 2 bil ion further its daily purchase of Norwegian currency to 2 bil ion
crowns ($190 mil ion)crowns ($190 mil ion) per day from 1.6 bil ion crownsper day from 1.6 bil ion crowns in orderin order to make funds to make funds
available for the government’savailable for the government’s fiscal budget. (On March 18, it announced that it would fiscal budget. (On March 18, it announced that it would
increaseincrease it to 1.6 bil ion Norwegian crowns per day from 500 mil ionit to 1.6 bil ion Norwegian crowns per day from 500 mil ion crowns.) crowns.)

Government of Norway
March 13: Announced that it would pay a greater part of the bil for Announced that it would pay a greater part of the bil for al all companies companies
seekingseeking to make temporary layoffs, suspended to make temporary layoffs, suspended al all airport fees for the first six months airport fees for the first six months
of 2020, and lifted for a periodof 2020, and lifted for a period of 10 months the tax charged for each passenger. of 10 months the tax charged for each passenger.
March 15: Announced that it would offer companies at least 100 bil ionAnnounced that it would offer companies at least 100 bil ion Norwegian Norwegian
crowns ($9.7 bil ion) in funding in the form of loan guarantees (50 bil ioncrowns ($9.7 bil ion) in funding in the form of loan guarantees (50 bil ion crowns to crowns to
~~smal~~ small and mediumand medium sized companies seeking bank loans) and bond issues (50 bil ion sized companies seeking bank loans) and bond issues (50 bil ion
crowns to large firmscrowns to large firms issuing corporate bonds). In addition, payments of payrol taxes issuing corporate bonds). In addition, payments of payrol taxes
wilwil be postponed. be postponed.
March 20: Presented legislationPresented legislation that would temporarilythat would temporarily reduce the value-added tax, reduce the value-added tax,
postpone tax filing deadlines and add workerpostpone tax filing deadlines and add worker and business protections under a 280 and business protections under a 280
bil ion kronerbil ion kroner ($24 bil ion) plan to boost the economy amid the pandemic. Along with ($24 bil ion) plan to boost the economy amid the pandemic. Along with
the tax provisions,the tax provisions, the legislativethe legislative package includes two previouslypackage includes two previously announced lending announced lending
programs that the government said would provide up to 100 bil ionprograms that the government said would provide up to 100 bil ion ~~kroner~~ kroner in support in support
for Norwegian businesses,for Norwegian businesses, ~~improving~~ improving their access to credit to ensure liquidity. their access to credit to ensure liquidity.
March 27: Proposed new measuresProposed new measures to support businesses hit by the viral outbreak to support businesses hit by the viral outbreak
and a sharp and a sharp ~~fal~~ fall in the price of oil.in the price of oil. They include, among other things, covering fixed They include, among other things, covering fixed
costs for companies affected by the coronavirus outbreak at a cost of 10 bil ion to 20 costs for companies affected by the coronavirus outbreak at a cost of 10 bil ion to 20
bil ion Norwegian crowns ($958 mil ionbil ion Norwegian crowns ($958 mil ion to $1.92 bil ion) per month for two months. to $1.92 bil ion) per month for two months.
Oman
March 18: The Central Bank of Oman announced that it wil The Central Bank of Oman announced that it wil provide about 8 bil ion provide about 8 bil ion
Omani rialsOmani rials ($20.8 bil ion) in extra liquidity to banks as one of several measures ($20.8 bil ion) in extra liquidity to banks as one of several measures
aimed at supporting the economy.aimed at supporting the economy. It also asked banks to cut banking fees,It also asked banks to cut banking fees, adjust adjust
capital and credit ratios,capital and credit ratios, ~~al ow~~ allow repayment postponements for up to six months, and repayment postponements for up to six months, and
facilitate lending, particularly in sectors affected by the COVID-19, including facilitate lending, particularly in sectors affected by the COVID-19, including
healthcare, travel and tourism. healthcare, travel and tourism.
Pakistan
State Bank of Pakistan
March 17: Cut its key interest rate by 75 basis points to 12.50% in response Cut its key interest rate by 75 basis points to 12.50% in response to the to the
anticipated slowdown due to COVID-19, provided additional support to investment, anticipated slowdown due to COVID-19, provided additional support to investment,
offering a new package of 100 bil ion rupees ($630.5 mil ion)offering a new package of 100 bil ion rupees ($630.5 mil ion) for investment in the for investment in the
manufacturing sector to fund investorsmanufacturing sector to fund investors at 7% for 10 years.,at 7% for 10 years., and announced that it and announced that it
would refinance banks to provide 5 bil ion rupees ($31.5 mil ion)would refinance banks to provide 5 bil ion rupees ($31.5 mil ion) at a maximumat a maximum of 3% of 3%
for the purchasing of equipment used to fight the COVID-19. for the purchasing of equipment used to fight the COVID-19.
March 24: Cut its benchmark interest rate for the second time Cut its benchmark interest rate for the second time in a week,in a week, lowering lowering
it by 150 basis points to 11% amidit by 150 basis points to 11% amid considerable uncertainty about how the COVID-considerable uncertainty about how the COVID-
19 outbreak would impact the global economy and Pakistan. 19 outbreak would impact the global economy and Pakistan.

Government of Pakistan
March 24: Announced a financial-relief Announced a financial-relief package of morepackage of more than 1 tril ionthan 1 tril ion rupees ($6.3 rupees ($6.3
bil ion) to support the economy and poorerbil ion) to support the economy and poorer workers.workers. It wilIt wil include help to the include help to the
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export and industry sectors, export and industry sectors, tax breaks, procurementtax breaks, procurement of medical and other of medical and other
equipment requiredequipment required to fight the pandemic, and the distribution of a monthly cash to fight the pandemic, and the distribution of a monthly cash
stipend among the poor. stipend among the poor.
Paraguay
Central Bank of Paraguay
March 13: Cut its benchmark interest rate by 25 basis points to 3.75%, as part of a Cut its benchmark interest rate by 25 basis points to 3.75%, as part of a
seriesseries of measuresof measures aimed at dealing with the impact of the COVID-19 outbreak. aimed at dealing with the impact of the COVID-19 outbreak.
Banks’ reserveBanks’ reserve ~~requirements~~ requirements wil also be reduced to help the financial sector wil also be reduced to help the financial sector
refinance debts. refinance debts.

Government of Paraguay
March 13: Announced tax relief Announced tax relief measures,measures, ~~as wel~~ as well as $150 mil ionas $150 mil ion of credit lines in of credit lines in
state banks and loans from multilateralstate banks and loans from multilateral agencies. agencies.
Peru
Central Reserve Bank of Peru
March 19: Cut its benchmark interest rate by 100 basis points to 1.25%, from 2.25% Cut its benchmark interest rate by 100 basis points to 1.25%, from 2.25%
to counter the economicto counter the economic impact of the COVID-19 pandemic and announced that, if impact of the COVID-19 pandemic and announced that, if
necessary,necessary, could employ other additional liquidity injection instruments to could employ other additional liquidity injection instruments to ~~al eviate~~alleviate
the crisis. the crisis.
March 29: Announced that that as part of the 90 bil ion soles Announced that that as part of the 90 bil ion soles stimulus plan stimulus plan
announced on March 29, the Bank would inject 30 bil ion solesannounced on March 29, the Bank would inject 30 bil ion soles into banks for loans to into banks for loans to
mainly mainly ~~smal er~~ smaller companies to help cover their working capital. companies to help cover their working capital.
April 2: Announced that it is preparing a majorAnnounced that it is preparing a major bond issuance to help underwrite an bond issuance to help underwrite an
unprecedented stimulus package to counter the economicunprecedented stimulus package to counter the economic impact of the fast-impact of the fast-
spreading pandemic. spreading pandemic.

Government of Peru
March 29: Announced that it is planning an economicAnnounced that it is planning an economic stimulus package worth stimulus package worth
around 90 bil ion solesaround 90 bil ion soles ($26.41 bil ion($26.41 bil ion or 12% of grossor 12% of gross domestic product) to support domestic product) to support
citizens and the key mining sector that have been impacted by COVID-19. It wilcitizens and the key mining sector that have been impacted by COVID-19. It wil have have
three phases of 30 bil ionthree phases of 30 bil ion ~~soles~~ soles each: containing the disease,each: containing the disease, ensuring companies’ ensuring companies’
payment chains by granting credit guarantees, and reactivating production, particularly payment chains by granting credit guarantees, and reactivating production, particularly
in the copper industry. in the copper industry.
Philippines
Central Bank of the Philippines (Bangko Sentral ng Pilipinas)
March 19: Cut the rate on its overnight reverseCut the rate on its overnight reverse repurchase facility by 50 basis repurchase facility by 50 basis
points to 3.25%, authorized a temporary relaxation of regulations on compliance points to 3.25%, authorized a temporary relaxation of regulations on compliance
reporting by banks, calculations of penalties on required reservesreporting by banks, calculations of penalties on required reserves and single borrower and single borrower
limits,limits, and approved a temporary reduction to zero of the term spread on and approved a temporary reduction to zero of the term spread on
rediscounting loans relativerediscounting loans relative to the overnight lending rate. to the overnight lending rate.
March 23: Revealed it would purchase up to 300 bil ion Philippine peso ($5.9 bil ion) Revealed it would purchase up to 300 bil ion Philippine peso ($5.9 bil ion)
worth of short-termworth of short-term ~~securities~~ securities under a repurchase agreement with the Bureau of the under a repurchase agreement with the Bureau of the
Treasury in a bid to inject a fresh round of liquidity into the marketTreasury in a bid to inject a fresh round of liquidity into the market and to keep a lid and to keep a lid
on interest rates in the process. on interest rates in the process.
March 24: Announced a 200 basis points reduction in the reserve Announced a 200 basis points reduction in the reserve ~~requirement~~ requirement ratio ratio
(RRR) to calm financial markets(RRR) to calm financial markets and boost lending. The cut, effective March 30, wil and boost lending. The cut, effective March 30, wil
bring the ratio to 12% and ensure there is sufficient liquidity to counter the economic bring the ratio to 12% and ensure there is sufficient liquidity to counter the economic
impact of the COVID-19 outbreak. impact of the COVID-19 outbreak.

Government of the Philippines
March 13: Instructed the Government Instructed the Government ~~Service~~ Service Insurance SystemInsurance System and the Social and the Social
Security System “to take advantage of the low stock prices" and "support the stock Security System “to take advantage of the low stock prices" and "support the stock
marketmarket by at least doubling their daily average purchase volumes"by at least doubling their daily average purchase volumes" from 2019. from 2019.
March 16: The government announced a 27.1-bil ion peso package to help fight the The government announced a 27.1-bil ion peso package to help fight the
COVID-19 pandemic and provide economic reliefCOVID-19 pandemic and provide economic relief to affected sectors. to affected sectors.
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March 17: The Philippine Stock Exchange halted The Philippine Stock Exchange halted al all stock, bond and currency trading stock, bond and currency trading
until further notice, after President Rodrigo Duterte placed Luzon, the country’s until further notice, after President Rodrigo Duterte placed Luzon, the country’s
economiceconomic powerhouse, under “enhanced community quarantine”. powerhouse, under “enhanced community quarantine”.
March 22: The Philippine Congress The Philippine Congress is reportedly drafting a stimulus package of at is reportedly drafting a stimulus package of at
least 200 bil ion pesos ($3.9 bil ion) as part of a supplemental budget to shore up the least 200 bil ion pesos ($3.9 bil ion) as part of a supplemental budget to shore up the
economy from the impact of the COVID-19 outbreak. economy from the impact of the COVID-19 outbreak.
March 19: The Philippine Stock Exchange reopened with shortened hours. The Philippine Stock Exchange reopened with shortened hours.
Poland
National Bank of Poland
March 17: Cut its benchmark interest rate by 50 basis points to 1.0% from 1.5% in Cut its benchmark interest rate by 50 basis points to 1.0% from 1.5% in
response to the COVID-19 pandemic; it also loweredresponse to the COVID-19 pandemic; it also lowered its lombardits lombard rate to 1.50% from rate to 1.50% from
2.50% and the rediscount rate to 1.05% from 1.75%, reduced banks’ required reserve 2.50% and the rediscount rate to 1.05% from 1.75%, reduced banks’ required reserve
ratios to 0.5% from 3.5%, announced plans to boost banking sector liquidity (through ratios to 0.5% from 3.5%, announced plans to boost banking sector liquidity (through
the extension of repo operations), and offered “large-scale” purchases of government the extension of repo operations), and offered “large-scale” purchases of government
bonds as part of its open-marketbonds as part of its open-market operations. operations.

Government of Poland
March 18: Announced an economic stimulusAnnounced an economic stimulus package of 212 bil ion zloty ($52 bil ion, package of 212 bil ion zloty ($52 bil ion,
or approximately 9% of gross domesticor approximately 9% of gross domestic product) to assist entrepreneursproduct) to assist entrepreneurs and and
employeesemployees during the COVID-19 crisis.during the COVID-19 crisis. It consists of 5 pil ars:It consists of 5 pil ars: ~~employee~~ employee safety, safety,
company financing, health protection, strengthening the financial system,company financing, health protection, strengthening the financial system, and a public and a public
investment program.investment program. Specific measuresSpecific measures include holidays in debt repayments and social include holidays in debt repayments and social
contributions, loan guarantees, as contributions, loan guarantees, as ~~wel~~ well as payments of salariesas payments of salaries to those unable to to those unable to
work. work.
March 26: Announced that the state bank BGK wil Announced that the state bank BGK wil issue bonds worth around 16 issue bonds worth around 16
bil ion zlotys ($3.9 bil ion) in 2020-2021 as part of a wider plan to combat the bil ion zlotys ($3.9 bil ion) in 2020-2021 as part of a wider plan to combat the
coronavirus impact on the economy.coronavirus impact on the economy. The state wilThe state wil buy the bonds back in 2021-2025, buy the bonds back in 2021-2025,
spending around 2.5 bil ionspending around 2.5 bil ion zlotys a year in the first year and then around 3.7 bil ion zlotys a year in the first year and then around 3.7 bil ion
zlotys zlotys ~~annual y~~annually. .
Portugal
Government of Portugal
March 13: Announced a 2.3 bil ion-euro Announced a 2.3 bil ion-euro package that wil include delaying somepackage that wil include delaying some tax tax
payments and granting soft loans. Companies wilpayments and granting soft loans. Companies wil ~~be al owed~~ be allowed to suspend social to suspend social
security payments and maintain employees’security payments and maintain employees’ contracts with payments equal to two-contracts with payments equal to two-
thirds of salaries,thirds of salaries, funded largelyfunded largely by the state, and workersby the state, and workers who have to stay at home who have to stay at home
to care for school children of up to 12 years of age wilto care for school children of up to 12 years of age wil ~~receive~~ receive 66% of their base 66% of their base
salaries. salaries.
March 18: Announced a 9.2 bil ion-euro Announced a 9.2 bil ion-euro package to support workerspackage to support workers and provide and provide
liquidity for companies affected by the COVID-19 outbreak. It consists of 5.2 bil ion liquidity for companies affected by the COVID-19 outbreak. It consists of 5.2 bil ion
euros in fiscal stimulus,euros in fiscal stimulus, 3 bil ion in state-backed credit guarantees, and 1 bil ion 3 bil ion in state-backed credit guarantees, and 1 bil ion
related to socialrelated to social security payments. (Just oversecurity payments. (Just over half of the 3 bil ionhalf of the 3 bil ion euros in credit lines euros in credit lines
announced is aimed at companiesannounced is aimed at companies working in tourism,working in tourism, hotels and restaurants. The hotels and restaurants. The
other half goes to industriesother half goes to industries like textiles,like textiles, clothing and wood. Around a third is set clothing and wood. Around a third is set
aside for microaside for micro ~~and smal~~ and small enterprises.) enterprises.)
Qatar
Qatar Central Bank
March 16: Cut the deposit rate by 50 basis points to 1%, lending rate by 100 basis Cut the deposit rate by 50 basis points to 1%, lending rate by 100 basis
points to 2.50%, and repurchase rate (repo) by 50 basis points to 1%. points to 2.50%, and repurchase rate (repo) by 50 basis points to 1%.

Government of Qatar
March 15: The Emir of Qatar announced several The Emir of Qatar announced several ~~measures~~ measures to shield the economic to shield the economic
and financial sectorsand financial sectors in the country from the impact of the COVID-19, including: (1) in the country from the impact of the COVID-19, including: (1)
~~al ocating~~allocating 75 bil ion Qatari riyals ($20.6 bil ion) to support and provide financial and 75 bil ion Qatari riyals ($20.6 bil ion) to support and provide financial and
economiceconomic incentives in the private sector,incentives in the private sector, (2) directing the Central Bank of Qatar to (2) directing the Central Bank of Qatar to
provide additional liquidity to banks operating in the country and putting in place the provide additional liquidity to banks operating in the country and putting in place the
appropriate mechanismappropriate mechanism to encourage banks to postpone loan to encourage banks to postpone loan ~~instal ments~~ installments and and
obligations of the private sectorobligations of the private sector with a grace period of six months, (3) directing the with a grace period of six months, (3) directing the
Qatar DevelopmentQatar Development Bank to postpone the Bank to postpone the ~~instal ments for al borrowers~~ installments for all borrowers for a period for a period
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of six months, (4) directing the government to increase of six months, (4) directing the government to increase its investmentsits investments in the stock in the stock
exchange by 10 bil ionexchange by 10 bil ion Qatari riyalsQatari riyals ($2.75 bil ion),($2.75 bil ion), (5) exempting food and medical (5) exempting food and medical
goods fromgoods from customs duties for a period of six months, and (6) exempting the various customs duties for a period of six months, and (6) exempting the various
sectorssectors of the economy from electricityof the economy from electricity and water fees for a period of 6 months. and water fees for a period of 6 months.
Romania
March 20: The National bank of Romania cut its benchmark interest rate by 50 basis The National bank of Romania cut its benchmark interest rate by 50 basis
points to 2.0% in order to curb the economicpoints to 2.0% in order to curb the economic ~~fal out~~ fallout from the COVID-19 outbreak. It from the COVID-19 outbreak. It
also cut its lending rate facility to 2.50% from 3.50% and wilalso cut its lending rate facility to 2.50% from 3.50% and wil provide liquidity to banks provide liquidity to banks
via repo transactions and purchase leu-denominated debt on the secondary market. via repo transactions and purchase leu-denominated debt on the secondary market.
Saudi Arabia
Saudi Arabian ~~Monetary~~ Monetary Authority
March 15: Announced that it had prepared a 50 bil ion riyal Announced that it had prepared a 50 bil ion riyal ($13.32 bil ion) package ($13.32 bil ion) package
to help to help ~~smal~~ small and medium-sizedand medium-sized ~~enterprises~~ enterprises cope with the economic impacts of cope with the economic impacts of
COVID-19; it also loweredCOVID-19; it also lowered by 75 basis points both its repo rate to 1%, and its by 75 basis points both its repo rate to 1%, and its
reversereverse repo rate to 0.5%. repo rate to 0.5%.

Government of Saudi Arabia
March 20: Introduced an additional stimulus package worth 120 bil ion Introduced an additional stimulus package worth 120 bil ion riyals ($32 riyals ($32
bil ion) to aid businesses,bil ion) to aid businesses, including the postponement of value-added tax (VAT), including the postponement of value-added tax (VAT),
excise tax, and incomeexcise tax, and income tax payments for a period of three months and exemptions of tax payments for a period of three months and exemptions of
various government leviesvarious government levies and fees. and fees.
March 30: Announced that it wil finance treatment for anyone infected with Announced that it wil finance treatment for anyone infected with
COVID-19 in the country, and took steps to boost wheat and livestockCOVID-19 in the country, and took steps to boost wheat and livestock supplies amid supplies amid
global fears of a food shortage. global fears of a food shortage.
Serbia
National Bank of Serbia
March 11: Cut its reference Cut its reference interest rate by 50 basis points to 1.75% to help interest rate by 50 basis points to 1.75% to help
minimizeminimize economic disruption caused by the COVID-19 outbreak. economic disruption caused by the COVID-19 outbreak.

Government of Serbia
March 29: Announced that it plans to offer about 5 bil ion Announced that it plans to offer about 5 bil ion euros ($5.54 bil ion) in euros ($5.54 bil ion) in
loans and subsidies to businessesloans and subsidies to businesses to help them cope with the economicto help them cope with the economic impact of impact of
COVID-19 and make a one-time payment of 100 euros to everyCOVID-19 and make a one-time payment of 100 euros to every citizen older than citizen older than
18. The president indicated that the state would use 700 mil ion18. The president indicated that the state would use 700 mil ion euros to pay euros to pay
minimumminimum wages of 30,367 dinars ($288.58) and wages of 30,367 dinars ($288.58) and ~~al ow~~allow tax delays for micro tax delays for micro ~~and smal~~
and small enterprisesenterprises for the three months after the end of the state of emergencyfor the three months after the end of the state of emergency to avoid job to avoid job
loss. loss.
Seychelles
March 24: The Central Bank of The Central Bank of ~~Seychel es~~ Seychelles cut its monetary policy rate by 100 basis cut its monetary policy rate by 100 basis
points to 4.0%, indicating that this was the first phase of its responsepoints to 4.0%, indicating that this was the first phase of its response to the to the ~~chal enge~~challenge
from the spread of the COVID-19, which is expected to lowerfrom the spread of the COVID-19, which is expected to lower this year’sthis year’s earnings earnings
from tourismfrom tourism by 70% and trigger a double-digit drop in economicby 70% and trigger a double-digit drop in economic growth. growth.
Singapore
Monetary Authority of Singapore
March 30: Announced that it would adopt a 0% per annum rate of appreciation of Announced that it would adopt a 0% per annum rate of appreciation of
the policy band starting at the prevailing levelthe policy band starting at the prevailing level of the Singapore Dol arof the Singapore Dol ar Nominal Nominal
Effective Exchange Rate (S$NEER), currently slightly below the mid-point of the Effective Exchange Rate (S$NEER), currently slightly below the mid-point of the
policy band.policy band.

Government of Singapore
February 18: Announced around $4.5 bil ion in financial packages to help contain Announced around $4.5 bil ion in financial packages to help contain
the COVID-19 outbreak, including $575 mil ionthe COVID-19 outbreak, including $575 mil ion to fight and contain the disease, to fight and contain the disease,
mainly through healthcare funding, and 4 bil ion in economic stimulusmainly through healthcare funding, and 4 bil ion in economic stimulus ~~measures~~ measures to to
manage its impact on businesses,manage its impact on businesses, jobs and households. jobs and households.
March 26: Unveiled stimulus plan worth around S$48 bil ion Unveiled stimulus plan worth around S$48 bil ion ($33.7 bil ion) to deal ($33.7 bil ion) to deal
with the economic with the economic ~~fal out~~fallout from COVID-19 (of which S$17 bil ion wil from COVID-19 (of which S$17 bil ion wil be drawn from be drawn from
the national reserves).the national reserves). A key part of the stimulus package involvesA key part of the stimulus package involves ramping up a jobs ramping up a jobs
support scheme first announced in February. The government wilsupport scheme first announced in February. The government wil now offset up to now offset up to
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25% of the first S$4,600 of workers’ 25% of the first S$4,600 of workers’ monthly wages for a nine-month period (up from monthly wages for a nine-month period (up from
the 8% quantum and S$3,600 cap announced in February), while self-employed the 8% quantum and S$3,600 cap announced in February), while self-employed
workersworkers ~~wil~~ wil be eligiblebe eligible to receiveto receive monthly payments of S$1,000 for nine months. monthly payments of S$1,000 for nine months.
SomeSome hard-hit sectors wilhard-hit sectors wil ~~receive~~ receive additional support: the government would offset additional support: the government would offset
up to 50% of wages in the food servicesup to 50% of wages in the food services sector and up to 75% of wages in the aviation sector and up to 75% of wages in the aviation
and tourismand tourism sectors.sectors. A previously announced cash payout to A previously announced cash payout to al all adult Singaporeans adult Singaporeans
would be tripled and low-incomewould be tripled and low-income ~~families wil~~ families wil also receivealso receive grocery vouchers. grocery vouchers.
Slovakia
Government of the Slovak Republic
March 29: Announced plans for an aid package of up to 1 bil ion euros a month to Announced plans for an aid package of up to 1 bil ion euros a month to
help firmshelp firms and employeesand employees hurt by the pandemic. Under the plan, the state would (1) hurt by the pandemic. Under the plan, the state would (1)
pay 80% of wages for employeespay 80% of wages for employees at firmsat firms forced to shut, (2) help self-employed forced to shut, (2) help self-employed
people and employeespeople and employees in firmsin firms that suffer that suffer ~~fal ing~~falling revenue, with payments linked to the revenue, with payments linked to the
size of the revenue drop, (3) size of the revenue drop, (3) ~~al ow~~allow employers employers to postpone their contributions to to postpone their contributions to
state social and health systems and delay somestate social and health systems and delay some tax payments if they suffer a 40% drop tax payments if they suffer a 40% drop
in revenue; (4) in revenue; (4) ~~al ow~~allow firms firms to offset accumulated lossesto offset accumulated losses ~~from~~ from past years going back to past years going back to
2014 against corporate income2014 against corporate income tax, and (5) offer firms bank guarantees of up to 500 tax, and (5) offer firms bank guarantees of up to 500
mil ionmil ion ~~euros~~ euros a month.a month.
South Africa
South African Reserve Bank
March 19: Cut its main lending rate by 100 basis points to 5.25% as it sought to Cut its main lending rate by 100 basis points to 5.25% as it sought to
offset the drag from the COVID-19 outbreak and the plunge in oil prices. offset the drag from the COVID-19 outbreak and the plunge in oil prices.
March 20: Announced measures Announced measures to inject liquidity into local markets,to inject liquidity into local markets, including including
intraday overnight supplementary repos to provide liquidity support to clearingintraday overnight supplementary repos to provide liquidity support to clearing banks, banks,
loweringlowering the standing facilities’the standing facilities’ borrowing rate by 100 basis points to 200 basis point borrowing rate by 100 basis points to 200 basis point
below the benchmark repo rate, and loweringbelow the benchmark repo rate, and lowering the standing facilities’the standing facilities’ lending rate to lending rate to
the repo rate from the previousthe repo rate from the previous rate of repo plus 100 basis points. rate of repo plus 100 basis points.
March 25: Announced that it would begin buying an unspecified amount of Announced that it would begin buying an unspecified amount of
government bonds as part of additional emergencygovernment bonds as part of additional emergency policy measurespolicy measures aimed at easing a aimed at easing a
severesevere liquidity crunch triggered by the COVID-19. liquidity crunch triggered by the COVID-19.
South Korea
Bank of Korea
March 16: Cut the seven-day repurchase rate by 50 basis points to 0.75% in an Cut the seven-day repurchase rate by 50 basis points to 0.75% in an
effort to soften the impact of the COVID-19 pandemic on the Korean economy. It effort to soften the impact of the COVID-19 pandemic on the Korean economy. It
also loweredalso lowered borrowing costs for the bank’s low interestborrowing costs for the bank’s low interest rate loan programsrate loan programs and and
relaxed col ateralrelaxed col ateral rules of its repurchasing operations,rules of its repurchasing operations, to ensure companies can easily to ensure companies can easily
and cheaply access credit. and cheaply access credit.
March 19: Announced that it wil buy government bonds worth 1.5 tril ionAnnounced that it wil buy government bonds worth 1.5 tril ion won won
($1.2 bil ion) to bolster liquidity in the bond market($1.2 bil ion) to bolster liquidity in the bond market and back short-term liquidity in and back short-term liquidity in
banks under increased loan demand due to banks under increased loan demand due to ~~fal out from~~ fallout from COVID-19. COVID-19.

Government of the Republic of Korea
March 3: Announced a 11.7 tril ionAnnounced a 11.7 tril ion won ($9.8 bil ion) stimuluswon ($9.8 bil ion) stimulus package that includes package that includes
funding for medicalfunding for medical institutions and quarantine efforts,institutions and quarantine efforts, assistance to assistance to ~~smal -~~ small- to to
medium-sizedmedium-sized businesses struggling to pay wages to their workers,businesses struggling to pay wages to their workers, and subsidies for and subsidies for
child care. child care.
March 17: The National Assembly The National Assembly approved a supplementary budget worth 11.7 approved a supplementary budget worth 11.7
tril iontril ion won ($9.4 bil ion) to help contain COVID-19 and cushion the economic won ($9.4 bil ion) to help contain COVID-19 and cushion the economic
~~fal out~~fallout. The government has indicated that it plans to execute at least 75% of its . The government has indicated that it plans to execute at least 75% of its
spending within the next two months. spending within the next two months.
March 18: Pledged 50 tril ion Pledged 50 tril ion won ($40 bil ion) in emergencywon ($40 bil ion) in emergency financing for financing for ~~smal~~
small businessesbusinesses and other stimulusand other stimulus ~~measures~~ measures to help the economy.to help the economy. Some highlights of the Some highlights of the
package include 12 tril ionpackage include 12 tril ion won in low-interestwon in low-interest financing for financing for ~~smal~~ small firms,firms, 5.5 tril ion 5.5 tril ion
won in loan guarantees, easing loan termswon in loan guarantees, easing loan terms and suspending interestand suspending interest payments for payments for ~~smal~~
small businesses.businesses. The Bank of KoreaThe Bank of Korea reportedly wilreportedly wil actively provide liquidity support for actively provide liquidity support for
around half of the new package. around half of the new package.
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March 20: South Korea’s South Korea’s financial authorities and local banks agreed to set up a financial authorities and local banks agreed to set up a
bond marketbond market stabilization fund worth more than 10 tril ionstabilization fund worth more than 10 tril ion won ($7.9 bil ion)won ($7.9 bil ion) as part as part
of the country’s efforts to calm financial markets roiledof the country’s efforts to calm financial markets roiled by the spread of COVID-19. by the spread of COVID-19.
March 24: Announced that it would double the planned economic Announced that it would double the planned economic rescue package rescue package
announced on March 18 to 100 tril ionannounced on March 18 to 100 tril ion won ($80 bil ion) to save companies hit by the won ($80 bil ion) to save companies hit by the
COVID-19 and put a floor under crashing stocks and bond markets.COVID-19 and put a floor under crashing stocks and bond markets. It includes 29.1 It includes 29.1
tril iontril ion won in loans to won in loans to ~~smal~~ small- and medium-sized- and medium-sized companies and 20 tril ioncompanies and 20 tril ion won wil be won wil be
used to buy corporate bonds and commercialused to buy corporate bonds and commercial paper of companies facing a credit paper of companies facing a credit
crunch. As part of the rescue package, the Financial Servicescrunch. As part of the rescue package, the Financial Services ~~Commission~~ Commission wil wil
establish a 10.7 tril ionestablish a 10.7 tril ion won facility set up to stabilize stock markets.won facility set up to stabilize stock markets. It wilIt wil also also
commencecommence a bond buying facility in Aprila bond buying facility in April that wilthat wil be funded by 84 institutions, be funded by 84 institutions,
including the Bank of Korea,including the Bank of Korea, ~~commercial~~ commercial banks and insurers. banks and insurers.
March 29: Announced that an “emergency disaster Announced that an “emergency disaster ~~relief~~ relief payment” of up to 1 mil ion payment” of up to 1 mil ion
won ($820) would be made to won ($820) would be made to ~~al households~~ all households (except the top 30% by income), (except the top 30% by income),
totaling sometotaling some 9.1 tril ion9.1 tril ion won ($7.44 bil ion). It is also preparing another extra budget won ($7.44 bil ion). It is also preparing another extra budget
worth 7.1 tril ionworth 7.1 tril ion won ($5.80 bil ion) for parliamentary approval in April,won ($5.80 bil ion) for parliamentary approval in April, and wil and wil
exempt some exempt some ~~smal~~ small and medium-sizedand medium-sized ~~companies~~ companies from paying utility bil s. from paying utility bil s.
Spain
Government of Spain
March 12: Approved the creation of a 2.8 bil ion euro ($3 bil ion) aid package to Approved the creation of a 2.8 bil ion euro ($3 bil ion) aid package to
help regionalhelp regional authorities mitigate the economic impact fromauthorities mitigate the economic impact from COVID-19, and COVID-19, and
announced a 1 bil ionannounced a 1 bil ion euro contribution to the health ministry’seuro contribution to the health ministry’s budget and 14 bil ion budget and 14 bil ion
euros ($15.1 bil ion) in liquidity for euros ($15.1 bil ion) in liquidity for ~~smal~~ small and mediumand medium companies (e.g., companies (e.g., ~~smal~~
small businessesbusinesses affected by the outbreak would be exempt from paying taxes for six affected by the outbreak would be exempt from paying taxes for six
months). It also announced that it would open a 400 mil ionmonths). It also announced that it would open a 400 mil ion euro credit line to aid euro credit line to aid
the tourismthe tourism industry. industry.
March 17: Unveiled a package of 200 bil ion euros ($219 bil ion) to mitigate Unveiled a package of 200 bil ion euros ($219 bil ion) to mitigate the the
effects of COVID-19 (117 bil ion euros wileffects of COVID-19 (117 bil ion euros wil be mobilizedbe mobilized by the state, with the rest by the state, with the rest
coming from private companies). It wil include state-backed credit guarantees for coming from private companies). It wil include state-backed credit guarantees for
companies,companies, loans and aid for vulnerable people, a moratoriumloans and aid for vulnerable people, a moratorium on mortgage payments on mortgage payments
and evictions; the government wiland evictions; the government wil also guarantee water, electricityalso guarantee water, electricity and internet to and internet to
for people adverselyfor people adversely affected. affected.
Sri Lanka
March 16: The Central Bank of Sri Lanka cut the Standing Deposit Facility Rate The Central Bank of Sri Lanka cut the Standing Deposit Facility Rate
(SDFR) and the Standing Lending Facility Rate (SLFR) by 25 basis points to 6.25% and (SDFR) and the Standing Lending Facility Rate (SLFR) by 25 basis points to 6.25% and
7.25%, respectively,7.25%, respectively, and the Statutory Reserveand the Statutory Reserve Ratio (SRR) on Ratio (SRR) on al all rupee deposit rupee deposit
liabilitiesliabilities of licensed commercialof licensed commercial banks was reduced by 1 percentage point to 4% banks was reduced by 1 percentage point to 4%
March 16: The Colombo Stock Exchange was closed until March 19, as the The Colombo Stock Exchange was closed until March 19, as the
government extended the public holiday in a bid to halt the spread of COVID-19 in government extended the public holiday in a bid to halt the spread of COVID-19 in
the country. the country.
April 3: The Central Bank of Sri Lanka cut by a further 25 basis points its benchmark The Central Bank of Sri Lanka cut by a further 25 basis points its benchmark
interest rates (the Standing Deposit Facility Rate and Standing Lending Facility Rate to interest rates (the Standing Deposit Facility Rate and Standing Lending Facility Rate to
6.00% and 7.00%, respectively),6.00% and 7.00%, respectively), its second such reduction in three weeks,its second such reduction in three weeks, in a move in a move
to support the economy amid the coronavirusto support the economy amid the coronavirus pandemic. pandemic.
Sweden
Sveriges Riksbank
March 13: Stated that it would lend up to 500 bil ion crowns ($51 bil ion) to Stated that it would lend up to 500 bil ion crowns ($51 bil ion) to
Swedish companies via banks to shoreSwedish companies via banks to shore up credit flows as the epidemicup credit flows as the epidemic wreaks havoc wreaks havoc
on financial markets. on financial markets.
March 16: Announced that it would buy securities Announced that it would buy securities for up to an additional 300 bil ion for up to an additional 300 bil ion
Swedish crowns ($31 bil ion) in 2020 to facilitate credit supply and mitigateSwedish crowns ($31 bil ion) in 2020 to facilitate credit supply and mitigate the the
downturn in the economy caused by the COVID-19, reduced the overnight lending downturn in the economy caused by the COVID-19, reduced the overnight lending
rate to banks to 0.2 percentage point above its repo rate (from 0.75 percentage rate to banks to 0.2 percentage point above its repo rate (from 0.75 percentage
point), and indicated that it would be flexible with the col ateralpoint), and indicated that it would be flexible with the col ateral banks can use when banks can use when
they borrow money from the Riksbank, giving lendersthey borrow money from the Riksbank, giving lenders ~~more~~ more scope to use mortgage scope to use mortgage
bonds as col ateral. bonds as col ateral.

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Government of Sweden
March 16: Presented a package worth morePresented a package worth more than 300 bil ion Swedish crowns ($31 than 300 bil ion Swedish crowns ($31
bil ion) to support the economy in the face of the COVID-19 pandemic. It included bil ion) to support the economy in the face of the COVID-19 pandemic. It included
measuresmeasures such as the central government assuming the ful cost for sicksuch as the central government assuming the ful cost for sick leave from leave from
companies through the months of April and May 2020 and for temporary companies through the months of April and May 2020 and for temporary
redundancies due to the crisis,redundancies due to the crisis, ~~and al owing~~ and allowing companies to put off paying tax and VAT companies to put off paying tax and VAT
for up to a year (retroactive to the start of 2020). for up to a year (retroactive to the start of 2020).
Switzerland
Swiss National Bank
March 23: Hiked its foreign currency interventions to their highest level Hiked its foreign currency interventions to their highest level since the since the
Brexit referendumBrexit referendum in 2016 in an effort to stem the risein 2016 in an effort to stem the rise in the franc, which has in the franc, which has
appreciated as investorsappreciated as investors sought safe assets while stock marketssought safe assets while stock markets have plunged during have plunged during
the coronavirus pandemic. the coronavirus pandemic.

Government of Switzerland
March 13: Unveiled an emergency economic-aid package of roughly 10 bil ion francs Unveiled an emergency economic-aid package of roughly 10 bil ion francs
($10.5 bil ion) for workers($10.5 bil ion) for workers ~~and smal~~ and small businesses.businesses. It includes 8 bil ion francs for It includes 8 bil ion francs for
“Kurzarbeit,” or short-time work,“Kurzarbeit,” or short-time work, and 580 mil ionand 580 mil ion francs in guaranteed bank loans. francs in guaranteed bank loans.
March 20: Announced a new 32 bil ion franc ($32.56 bil ion) aid package to support Announced a new 32 bil ion franc ($32.56 bil ion) aid package to support
companies and workerscompanies and workers hit by the wideninghit by the widening COVID-19 outbreak. The bulk of the COVID-19 outbreak. The bulk of the
cash (20 bil ion francs) wilcash (20 bil ion francs) wil go into guarantees for bank loans to companies at “very go into guarantees for bank loans to companies at “very
modest” interest rates.modest” interest rates. ~~Firms wil~~ Firms wil be able to get loans worth up to 10% of their be able to get loans worth up to 10% of their
revenue, to a maximumrevenue, to a maximum of 20 mil ionof 20 mil ion francs. Amounts of 500,000 francs wilfrancs. Amounts of 500,000 francs wil be paid be paid
out immediatelyout immediately and guaranteed by the government. The government’sand guaranteed by the government. The government’s short-time short-time
working schemeworking scheme would also be extended to fixed-term, temporarywould also be extended to fixed-term, temporary workers,workers, and and
trainees.trainees. The package fol ows one worth 10 bil ionThe package fol ows one worth 10 bil ion francs announced on March 13, francs announced on March 13,
bringing the total stimulus to 42 bil ion francs ($42.8 bil ion). bringing the total stimulus to 42 bil ion francs ($42.8 bil ion).
March 31: Announced that it is stepping up its funding plans in response Announced that it is stepping up its funding plans in response to to
government measuresgovernment measures to cushion the economicto cushion the economic impact of the pandemic, doubling the impact of the pandemic, doubling the
volume of outstanding short-term money market instruments.volume of outstanding short-term money market instruments. The Federal Finance The Federal Finance
AdministrationAdministration (FFA) wil(FFA) wil ~~increase~~ increase the outstanding volumethe outstanding volume of short-term money of short-term money
~~market~~ market instruments, from around 6 bil ion francs ($6.24 bil ion) to 12 bil ion francs, instruments, from around 6 bil ion francs ($6.24 bil ion) to 12 bil ion francs,
and wiland wil once again step up salesonce again step up sales of its own Confederation bond holdings. of its own Confederation bond holdings.
Taiwan
Central Bank of the Republic of China (Taiwan)

March 19: Cut its benchmark rate by 25 basis points to 1.125%, and announced that Cut its benchmark rate by 25 basis points to 1.125%, and announced that
it would expand the scope of repurchase facility operations and provide banks with it would expand the scope of repurchase facility operations and provide banks with
T$200 bil ion ($6.6 bil ion) of financing to support T$200 bil ion ($6.6 bil ion) of financing to support ~~smal~~ small and mediumand medium sized companies sized companies
which have been hard hit by the COVID-19 outbreak. which have been hard hit by the COVID-19 outbreak.

Government of Taiwan
February 25: Approved a T$60 bil ion Approved a T$60 bil ion ($2 bil ion) package to help cushion the ($2 bil ion) package to help cushion the
impact of the COVID-19 outbreak on its export-reliant economy,impact of the COVID-19 outbreak on its export-reliant economy, including loans for including loans for
~~smal~~ small businesses,businesses, subsidies for hard-hit tour agencies,subsidies for hard-hit tour agencies, tax cuts for tour bus drivers, tax cuts for tour bus drivers,
and vouchers to spend on food in night markets. and vouchers to spend on food in night markets.
March 12: Announced that an additional T$40 bil ion Announced that an additional T$40 bil ion ($1.33 bil ion) from the ($1.33 bil ion) from the
Employment Stabilization Fund and the TourismEmployment Stabilization Fund and the Tourism ~~Development~~ Development Fund would be Fund would be
available to stimulate Taiwanese economy. available to stimulate Taiwanese economy.
March 19: The president said that the government would help its hard-hit airline The president said that the government would help its hard-hit airline
industry access T$50 bil ionindustry access T$50 bil ion in financing, and did not rule out further economic in financing, and did not rule out further economic
stimulus. stimulus.
March 19: Authorized its National Stabilisation Fund to intervene and buy stocks on Authorized its National Stabilisation Fund to intervene and buy stocks on
the market,the market, as the island’s bourse continues to as the island’s bourse continues to ~~fal~~ fall on COVID-19 worries. on COVID-19 worries.
Thailand
Bank of Thailand
March 20: Cut its key interest rate by 25 basis points to 0.75%, as the spread of Cut its key interest rate by 25 basis points to 0.75%, as the spread of
COVID-19 exerted further pressureCOVID-19 exerted further pressure on the Thai economy. on the Thai economy.
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March 22: Together with the Ministry of Finance and the Securities Together with the Ministry of Finance and the Securities and Exchange and Exchange
Commission,Commission, announced three measuresannounced three measures to address liquidity concerns and ensure the to address liquidity concerns and ensure the
functioning of local financial markets:functioning of local financial markets: (1) setting up a special facility that (1) setting up a special facility that ~~al ows~~allows
commercialcommercial banks that purchase units in high-quality money marketbanks that purchase units in high-quality money market funds or daily funds or daily
fixed-income funds to use them as col ateralfixed-income funds to use them as col ateral for liquidity support (initial estimatefor liquidity support (initial estimate is 1 is 1
tril iontril ion baht); (2) creation of a 70-100 bil ion baht “Corporate Bond Stabilization baht); (2) creation of a 70-100 bil ion baht “Corporate Bond Stabilization
Fund” that invests in high-quality, newly issued bonds by corporates that cannot ful y Fund” that invests in high-quality, newly issued bonds by corporates that cannot ful y
rol overrol over maturing corporate bonds, and (3) Bank of Thailand wilmaturing corporate bonds, and (3) Bank of Thailand wil continue to continue to
purchase government bonds to provide liquidity to the market. purchase government bonds to provide liquidity to the market.

Government of Thailand
March 10: Approved a stimulus Approved a stimulus package worth an estimatedpackage worth an estimated 400 bil ion baht ($12.74 400 bil ion baht ($12.74
bil ion) to help bil ion) to help ~~al eviate~~ alleviate the impact of the COVID-19 outbreak. It includes 150 bil ion the impact of the COVID-19 outbreak. It includes 150 bil ion
baht of soft loans, a 20 bil ion baht fund to help firmsbaht of soft loans, a 20 bil ion baht fund to help firms and workersand workers affected, and tax affected, and tax
benefits and support for utilitiesbenefits and support for utilities costs. costs.
March 24: Approved a package of stimulus Approved a package of stimulus ~~measures~~ measures worth at least 117 bil ion baht worth at least 117 bil ion baht
($3.56 bil ion) to try to mitigate the impact of the coronavirus outbreak. The ($3.56 bil ion) to try to mitigate the impact of the coronavirus outbreak. The
measuresmeasures include cash handouts worth 45 bil ion baht for 3 mil ioninclude cash handouts worth 45 bil ion baht for 3 mil ion ~~workers~~ workers outside outside
the social security system; soft loans worth 60 bil ion baht; and tax breaks.the social security system; soft loans worth 60 bil ion baht; and tax breaks. Separately, Separately,
~~smal firms~~ small firms wil be offered 10 bil ion baht of loanswil be offered 10 bil ion baht of loans and business tax payments wil be and business tax payments wil be
delayed. delayed.
March 30: Announced that it is preparing a third stimulus package, worth more Announced that it is preparing a third stimulus package, worth more than than
500 bil ion baht ($15.3 bil ion), to 500 bil ion baht ($15.3 bil ion), to ~~al eviate~~ alleviate the impact of the coronavirus crisis. the impact of the coronavirus crisis.
March 31: Agreed to triple Agreed to triple the number of workersthe number of workers receiving cash handouts to nine receiving cash handouts to nine
mil ionmil ion to help ease the impact of the spreading coronavirus.to help ease the impact of the spreading coronavirus. It had previouslyIt had previously planned planned
to provide cash handouts of 15,000 baht ($458) each to 3 mil ionto provide cash handouts of 15,000 baht ($458) each to 3 mil ion workers,workers, taking the taking the
total to 45 bil ion baht ($1.38 bil ion).total to 45 bil ion baht ($1.38 bil ion). Now its total handout wil reach 135 bil ion Now its total handout wil reach 135 bil ion
baht ($4.13 bil ion). baht ($4.13 bil ion).
Tunisia
Central Bank of Tunisia
March 17: Cut its key interest rate by 100 basis points to 6.75%, as it responded to Cut its key interest rate by 100 basis points to 6.75%, as it responded to
the negative impact of the COVID-19 on the global growth outlook. the negative impact of the COVID-19 on the global growth outlook.
April 1: Asked banks and financial institutions to suspend the distribution of 2019 Asked banks and financial institutions to suspend the distribution of 2019
dividends and dividends and ~~al ow customers~~ allow customers to defer loan payments for three months as part of a to defer loan payments for three months as part of a
package to ease the social and economicpackage to ease the social and economic effects of the coronavirus. effects of the coronavirus.

Government of Tunisia
March 21: Announced that it would Announced that it would ~~al ocate~~allocate 2.5 bil ion dinars ($850 mil ion) 2.5 bil ion dinars ($850 mil ion) to to
combat the economiccombat the economic and social effects of the COVID-19 health crisis.and social effects of the COVID-19 health crisis. Among new Among new
measures,measures, the government wilthe government wil delay tax debts, postpone taxes on delay tax debts, postpone taxes on ~~smal -~~ small- and and
medium-sizedmedium-sized businesses,businesses, delay repayment of low-incomedelay repayment of low-income ~~employee~~ employee loans, and loans, and
provide financial assistance to poor familiesprovide financial assistance to poor families and those who have lost their jobs due to and those who have lost their jobs due to
the crisisthe crisis and loans and aid to help companies affected. and loans and aid to help companies affected.
March 23: The finance minister The finance minister announced that the International Monetary Fund wil announced that the International Monetary Fund wil
disburse $400 mil iondisburse $400 mil ion to help the country face the effects of COVID-19. to help the country face the effects of COVID-19.
March 28: The European Union granted Tunisia 250 mil ion The European Union granted Tunisia 250 mil ion euros in aid to help it euros in aid to help it
cope with the economiccope with the economic and social effects of the viral outbreak. and social effects of the viral outbreak.
Turkey
Central Bank of Turkey
March 17: LoweredLowered its benchmark one-week repo rate by 100 basis points to 9.75%, its benchmark one-week repo rate by 100 basis points to 9.75%,
as it responded to the negative impact of the COVID-19 on the global growth as it responded to the negative impact of the COVID-19 on the global growth
outlook. outlook.
March 31: Announced emergency Announced emergency ~~measures~~ measures to stem the to stem the ~~fal out~~fallout from a growing from a growing
pandemic. It would (1) pandemic. It would (1) ~~al ow~~allow primary dealers primary dealers ~~to sel~~ to sell to the Bank (for a temporary to the Bank (for a temporary
period) debt they purchased from the Unemployment Insurance Fund, (2) extend 60 period) debt they purchased from the Unemployment Insurance Fund, (2) extend 60
bil ion lirabil ion lira ($9 bil ion) worth of rediscount credits,($9 bil ion) worth of rediscount credits, (3) add more(3) add more lending options lending options ~~wel~~
well below its 9.75% policy rate, (4) hold swap auctions with six-month maturitiesbelow its 9.75% policy rate, (4) hold swap auctions with six-month maturities for lira for lira
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against dol ars, against dol ars, euros, or gold at an interest rate 125 basis points lowereuros, or gold at an interest rate 125 basis points lower than the than the
policy rate, and (5) policy rate, and (5) ~~al ow lenders~~ allow lenders to use mortgage- and asset-backed securitiesto use mortgage- and asset-backed securities as as
col ateralcol ateral for foreign exchange operations. for foreign exchange operations.

Government of Turkey
March 18: Unveiled a 100 bil ion-lira Unveiled a 100 bil ion-lira ($15.4 bil ion) plan to help businesses($15.4 bil ion) plan to help businesses affected affected
by the COVID-19 pandemic. It includes measuresby the COVID-19 pandemic. It includes measures from tax cuts and payment from tax cuts and payment
deferralsdeferrals for businesses to an increase in minimumfor businesses to an increase in minimum pension payouts. pension payouts.
Ukraine
March 19: The government published a new law that wil The government published a new law that wil exempt taxpayers from exempt taxpayers from
paying the land and property taxes from March 1 to April 30, introduced a paying the land and property taxes from March 1 to April 30, introduced a
moratoriummoratorium on tax audits from March 18 to May 31, and suspended some taxon tax audits from March 18 to May 31, and suspended some tax -related -related
penalties from March 1 to May 31. penalties from March 1 to May 31.
Uganda
Bank of Uganda
March 24: Sold dol ars in the interbank market Sold dol ars in the interbank market to support the local currency, which to support the local currency, which
has been experiencing sharp depreciation due to COVID-19-related disruptions. has been experiencing sharp depreciation due to COVID-19-related disruptions.
April 6: Cut its policy rate by 100 basis points to 8.0% to support the economy Cut its policy rate by 100 basis points to 8.0% to support the economy
which has been hit by the impact of COVID-19. It also announced that it had which has been hit by the impact of COVID-19. It also announced that it had
“directed” commercial“directed” commercial banks to defer banks to defer ~~al discretionary~~ all discretionary payments, such as dividends payments, such as dividends
and bonus payments, for at least 90 days from March. and bonus payments, for at least 90 days from March.
United Arab Emirates
Central Bank of the UAE
(UAE)
March 15: Announced a 100 bil ion Announced a 100 bil ion dirham ($27 bil ion)dirham ($27 bil ion) stimulus package to deal stimulus package to deal
with the economic effects of the COVID-19 pandemic; it cut the rate on one-week with the economic effects of the COVID-19 pandemic; it cut the rate on one-week
certificatescertificates of deposit by 75 basis points and wilof deposit by 75 basis points and wil also ease regulatory limitsalso ease regulatory limits on loans. on loans.
April 5: Announced new measures Announced new measures to guarantee liquidity in the banking system in the to guarantee liquidity in the banking system in the
face of the pandemic, boosting its stimulus to a total of 256 bil ionface of the pandemic, boosting its stimulus to a total of 256 bil ion dirhams ($70 dirhams ($70
bil ion) from a previouslybil ion) from a previously announced 100 bil ion dirhams ($27 bil ion) package. It also announced 100 bil ion dirhams ($27 bil ion) package. It also
halved banks’ reservehalved banks’ reserve ~~requirements~~ requirements for demand deposits to 7% fromfor demand deposits to 7% from 14%, which wil 14%, which wil
inject about 61 bil ioninject about 61 bil ion dirhams of liquidity to support banks’ lending and liquidity dirhams of liquidity to support banks’ lending and liquidity
management, extended the duration of a previously announced deferral of loan management, extended the duration of a previously announced deferral of loan
principal and interest payments for customersprincipal and interest payments for customers until the end of the year, and said until the end of the year, and said
banks participating in the scheme can benefit from a capital buffer reliefbanks participating in the scheme can benefit from a capital buffer relief of 50 bil ion of 50 bil ion
dirhams until Decemberdirhams until December 2021, among other measures. 2021, among other measures.

Government of the UAE
March 30: Announced that it would inject funding into state-owned Emirates Announced that it would inject funding into state-owned Emirates
AirlinesAirlines to help it deal with the impact of COVID-19 on its business. to help it deal with the impact of COVID-19 on its business.
April 5: Announced that it would reinforce Announced that it would reinforce its stockpile of strategic goods and waive its stockpile of strategic goods and waive
residency visa fines for the rest of the year in responseresidency visa fines for the rest of the year in response to the viral outbreak. to the viral outbreak.
United Kingdom
Bank of England
March 11: Cut its benchmark interest rate by half a percentage point, to 0.25%, Cut its benchmark interest rate by half a percentage point, to 0.25%,
revived a program to support lending to revived a program to support lending to ~~smal~~ small and midsizeand midsize businesses,businesses, and reduced and reduced
bank capital requirementsbank capital requirements to further boost credit. to further boost credit.
March 19: Cut its benchmark rate by 15 basis points to 0.1% to try to mitigate the Cut its benchmark rate by 15 basis points to 0.1% to try to mitigate the
impact of COVID-19 on the British economy,impact of COVID-19 on the British economy, added 200 bil ionadded 200 bil ion pounds ($232 bil ion) pounds ($232 bil ion)
to its asset purchase programto its asset purchase program (including sovereign(including sovereign and private debt), increasedand private debt), increased its its
banks’ borrowing banks’ borrowing ~~al owance~~allowance under the Term under the Term Funding Scheme for Funding Scheme for ~~Smal~~ Small and Medium and Medium
EnterprisesEnterprises from 5% to 10% of participants’ stock of realfrom 5% to 10% of participants’ stock of real economy lending, and economy lending, and
~~cancel ed~~cancelled its 2020 stress test of the 8 major its 2020 stress test of the 8 major UK banks. UK banks.
April 2: Announced that it wil double the size of its corporate bond purchase Announced that it wil double the size of its corporate bond purchase
program to at least 20 bil ionprogram to at least 20 bil ion pounds ($24.7 bil ion),pounds ($24.7 bil ion), part of a previouslypart of a previously announced announced
stimulus package to help the economy.stimulus package to help the economy. It wil begin ramping up its corporate bond It wil begin ramping up its corporate bond
purchases through a seriespurchases through a series of reverseof reverse auctions starting on Aprilauctions starting on April 7, holding three a 7, holding three a
week,week, and it wiland it wil be able to buy 20 mil ionbe able to buy 20 mil ion pounds of any single bond—double the pounds of any single bond—double the
previous amount. previous amount.
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UK Government
March 11: Announced a stimulus Announced a stimulus package totaling 30 bil ion pounds ($39 bil ion). It package totaling 30 bil ion pounds ($39 bil ion). It
wilwil include 7 bil ion pounds ($8.6 bil ion) available to support the labor market,include 7 bil ion pounds ($8.6 bil ion) available to support the labor market, 5 5
bil ion pounds ($6.1 bil ion) to help the health-care system,bil ion pounds ($6.1 bil ion) to help the health-care system, and 18 bil ionand 18 bil ion pounds ($22 pounds ($22
bil ion) to support the UK economy,bil ion) to support the UK economy, bringing the total fiscal stimulus to 30 bil ion bringing the total fiscal stimulus to 30 bil ion
pounds ($39 bil ion).pounds ($39 bil ion). (Among the specific(Among the specific measures,measures, there wil be a tax cut for there wil be a tax cut for
retailers,retailers, cash grants to cash grants to ~~smal~~ small businesses,businesses, a mandate to provide sick pay for people a mandate to provide sick pay for people
who need to self-isolate,who need to self-isolate, subsidies to cover the costs of sick pay for subsidies to cover the costs of sick pay for ~~smal~~ small businesses, businesses,
and expanded access to government benefits for the self-employedand expanded access to government benefits for the self-employed and unemployed.) and unemployed.)
March 17: Unveiled a package of 350 bil ion pounds ($424 bil ion) to support the Unveiled a package of 350 bil ion pounds ($424 bil ion) to support the
economy; it includes 330 bil ion pounds of guaranteed loans for businesseseconomy; it includes 330 bil ion pounds of guaranteed loans for businesses that need that need
cash to pay rent or suppliers,cash to pay rent or suppliers, 20 bil ion pounds of tax cuts and grants for businesses 20 bil ion pounds of tax cuts and grants for businesses
in 2020, a three-month mortgage payment holiday for borrowersin 2020, a three-month mortgage payment holiday for borrowers affected by the affected by the
virus, and a one-year “business rates” holiday for businessesvirus, and a one-year “business rates” holiday for businesses in the retail,in the retail, leisure,leisure, and and
hospitality industry. hospitality industry.
March 28: WilWil ease regulations for affected businesses,ease regulations for affected businesses, including simplifyingincluding simplifying the the
insolvency systeminsolvency system to keep companies trading, easing administrativeto keep companies trading, easing administrative ~~requirements~~ requirements and and
barriersbarriers to the import of personal protective equipment, and helping new companies to the import of personal protective equipment, and helping new companies
produce and distribute hand sanitizer within a matter of days. produce and distribute hand sanitizer within a matter of days.
Vietnam
State Bank of Vietnam
February 24: Ordered commercial Ordered commercial banks to eliminate,banks to eliminate, cut, or delay interest cut, or delay interest
payments on loans to companies facing lossespayments on loans to companies facing losses due to the coronavirus outbreak. due to the coronavirus outbreak.
March 16: Cut by 100 basis points both its refinance rate (to 5%) and the overnight Cut by 100 basis points both its refinance rate (to 5%) and the overnight
lending rate in the inter-bank market (to 6%), and by 50 basis points its discount rate lending rate in the inter-bank market (to 6%), and by 50 basis points its discount rate
(to 3.5%). (to 3.5%).

Government of Vietnam
March 3: Announced measures Announced measures worth 27 tril ionworth 27 tril ion dong ($1.16 bil ion) to help dong ($1.16 bil ion) to help
businessesbusinesses cope with the coronavirus epidemiccope with the coronavirus epidemic and help the economy stick to its and help the economy stick to its
6.8% growth target this year. They include tax breaks, delayed tax payments, and a 6.8% growth target this year. They include tax breaks, delayed tax payments, and a
reduction in land leasereduction in land lease fees. The government willfees. The government will also speed up state spending on also speed up state spending on
infrastructure projects. infrastructure projects.
Zimbabwe
Reserve Bank of Zimbabwe
March 26: Cut its main lending rate to 25% fromCut its main lending rate to 25% from 35% and set a fixed exchange rate 35% and set a fixed exchange rate
(at 25 Zimbabwe dol ars to the U.S. dol ar) as part of measures(at 25 Zimbabwe dol ars to the U.S. dol ar) as part of measures to support the to support the
economy.economy. It indicated that it had suspended the managed floating exchange rate It indicated that it had suspended the managed floating exchange rate
~~system~~ system to provide for greater certainty in the pricing of goods and servicesto provide for greater certainty in the pricing of goods and services in the in the
economy. economy.

Government of Zimbabwe
March 29: Published new exchange control regulations making it legal for Published new exchange control regulations making it legal for
Zimbabweans to use electronicZimbabweans to use electronic and cash foreign currenciesand cash foreign currencies in domesticin domestic transactions, transactions,
as the country readies for a 21-day lockdown to prevent the spread of COVID-19.as the country readies for a 21-day lockdown to prevent the spread of COVID-19.
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Multi-Country and
March 4: The The International Monetary Fund (IMF) made $50 bil ion made $50 bil ion in loans in loans
International
available to deal with the COVID-19 through its rapid-disbursing emergency available to deal with the COVID-19 through its rapid-disbursing emergency financing financing
Institutions’
facilities, facilities, including $10 bil ion of zero-interestincluding $10 bil ion of zero-interest loans to the poorest IMF member loans to the poorest IMF member
Responses
countries. On March 16, the IMF announced that it “stands ready to mobilize countries. On March 16, the IMF announced that it “stands ready to mobilize its $1 its $1
tril iontril ion lending capacity to help our membership"lending capacity to help our membership" and that it has “40 ongoing and that it has “40 ongoing
arrangements—both disbursing and precautionary—with combined commitmentsarrangements—both disbursing and precautionary—with combined commitments of of
about $200 bil ion,”about $200 bil ion,” ~~some~~ some of which could be used for this crisis,of which could be used for this crisis, and that it is aiming and that it is aiming
to boost its debt reliefto boost its debt relief fund to $1 bil ion from its current levelfund to $1 bil ion from its current level of $400 mil ion. of $400 mil ion.
March 3: The The World Bank announced an initial package of up to $12 bil ion announced an initial package of up to $12 bil ion in in
loans for countries to help countries cope with the effects of the COVID-19 loans for countries to help countries cope with the effects of the COVID-19
outbreak. outbreak. ~~Specifical y,~~ Specifically, it comprisesit comprises up to $2.7 bil ionup to $2.7 bil ion new financing from IBRD, $1.3 new financing from IBRD, $1.3
bil ion frombil ion from IDA, complementedIDA, complemented by reprioritizationby reprioritization of $2 bil ionof $2 bil ion of the Bank’s existing of the Bank’s existing
portfolio,portfolio, and $6 bil ion fromand $6 bil ion from IFC, as IFC, as ~~wel~~ well as policy advice and technical assistance ($8 as policy advice and technical assistance ($8
bil ion is new funding and the remaining $4 bil ion is redirectedbil ion is new funding and the remaining $4 bil ion is redirected from current lines of from current lines of
credit). credit).
March 11: The The Inter-American Development Bank (IADB) announced that it announced that it
has up to $2 bil ionhas up to $2 bil ion in resourcesin resources that can be programmedthat can be programmed to countries requesting to countries requesting
support for diseasesupport for disease monitoring,monitoring, testing and public health services,testing and public health services, and that it could and that it could
work with countries that have undisbursed loan balances to redirect resourceswork with countries that have undisbursed loan balances to redirect resources to to
pandemic-response efforts. pandemic-response efforts.
March 13: The The European Bank for Reconstruction and Development
(EBRD) unveiled an emergency €1 bil ion “Solidarityunveiled an emergency €1 bil ion “Solidarity Package” of measuresPackage” of measures to help to help
companies across its regions deal with the impact of the COVID-19 pandemic. Under companies across its regions deal with the impact of the COVID-19 pandemic. Under
the emergencythe emergency program, the EBRD wilprogram, the EBRD wil set up a “resilienceset up a “resilience framework”framework” to provide to provide
financing for existing EBRD clients with strong business fundamentals experiencing financing for existing EBRD clients with strong business fundamentals experiencing
temporary credit difficulties,temporary credit difficulties, ~~comprising~~ comprising emergency liquidity,emergency liquidity, working capital and working capital and
trade finance. trade finance.
March 15: The Bank of Canada, the Bank of England, the Bank of Japan, the The Bank of Canada, the Bank of England, the Bank of Japan, the
European Central Bank, the European Central Bank, the U.S. Federal Reserve, and the Swiss, and the Swiss National Bank National Bank
agreed to loweragreed to lower the pricing on the standing US dol ar liquidity swap arrangements by the pricing on the standing US dol ar liquidity swap arrangements by
25 basis points, so that the new rate wil25 basis points, so that the new rate wil be the US dol ar overnight index swap (be the US dol ar overnight index swap ( OIS) OIS)
rate plus 25 basis points. rate plus 25 basis points.
March 16: The The European Investment Bank Group (EIBG) proposed a 40 proposed a 40
bil ion euro financing package consists of dedicated guarantee schemesbil ion euro financing package consists of dedicated guarantee schemes to banks to banks ~~b ased~~based
on existing program for immediateon existing program for immediate deployment (20 bil ion euros), liquidity lines to deployment (20 bil ion euros), liquidity lines to
banks to ensure additional working capital support for SMEs and mid-caps (10 bil ion banks to ensure additional working capital support for SMEs and mid-caps (10 bil ion
euros), and asset-backed securitieseuros), and asset-backed securities purchasing programspurchasing programs ~~to al ow~~ to allow banks to transfer banks to transfer
riskrisk on portfolios of SME loans (10 bil ion euros). on portfolios of SME loans (10 bil ion euros).
March 16: The The Islamic Development Bank (IsDB) Group announced that it is Group announced that it is
setting-up a special “Strategic Preparedness and Response Facility” of $730 mil ionsetting-up a special “Strategic Preparedness and Response Facility” of $730 mil ion to to
mitigate the negative health and socio-economicmitigate the negative health and socio-economic impact of the COVID-19 pandemic. impact of the COVID-19 pandemic.
It wil include $280 mil ionIt wil include $280 mil ion ~~from~~ from the Bank and Islamicthe Bank and Islamic Solidarity Fund for Solidarity Fund for
DevelopmentDevelopment (ISFD) for sovereign projects(ISFD) for sovereign projects and programs,and programs, $300 mil ion$300 mil ion from from
International Islamic Trade finance Corporation (ITFC) for trade finance and $150 International Islamic Trade finance Corporation (ITFC) for trade finance and $150
mil ionmil ion ~~from~~ from the Islamic Corporation for the Insurance of Investment and Export the Islamic Corporation for the Insurance of Investment and Export
Credit (ICIEC) for insurance coverage.Credit (ICIEC) for insurance coverage.
March 16: The The Central American Bank for Economic Integration (CABEI)
granted a nonreimbursable financial package worth $8 mil iongranted a nonreimbursable financial package worth $8 mil ion to the eight countries to the eight countries
of the Central Americanof the Central American Integration SystemIntegration System in order to combat the widening in order to combat the widening
economiceconomic ~~fal out~~ fallout from the COVID-19 (Guatemala, El Salvador, Honduras, Nicaragua, from the COVID-19 (Guatemala, El Salvador, Honduras, Nicaragua,
Costa Rica, Panama, Belize,Costa Rica, Panama, Belize, and the Dominicanand the Dominican Republic wil each receiveRepublic wil each receive $1 mil ion).$1 mil ion).
March 18: The The Asian Development Bank (ADB) announced a $6.5 bil ionannounced a $6.5 bil ion initial initial
package to address the immediatepackage to address the immediate needs of its developing memberneeds of its developing member countries (DMCs) countries (DMCs)
as they respond to the COVID-19 pandemic. The initial package includes as they respond to the COVID-19 pandemic. The initial package includes
approximately $3.6 bil ion in sovereign operations for a range of responsesapproximately $3.6 bil ion in sovereign operations for a range of responses to the to the
health and economichealth and economic consequences of the pandemic, $1.6 bil ion in nonconsequences of the pandemic, $1.6 bil ion in non -sovereign -sovereign
operations for micro,operations for micro, ~~smal ,~~ small, and medium-sized enterprises,and medium-sized enterprises, ~~domestic~~ domestic and regional and regional
trade, and firmstrade, and firms directly impacted, about $1 bil ion in concessional resourcesdirectly impacted, about $1 bil ion in concessional resources through through
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~~real ocations~~ reallocations from ongoing projects and assessing possiblefrom ongoing projects and assessing possible needs for contingencies, needs for contingencies,
and $40 mil ionand $40 mil ion in technical assistance and quick-disbursing grants. (Since February in technical assistance and quick-disbursing grants. (Since February
2020, ADB has provided more2020, ADB has provided more than $225 mil ionthan $225 mil ion to meetto meet urgent needs of both urgent needs of both
governments and businesses in DMCs.) governments and businesses in DMCs.)
March 19: The The U.S. Federal Reserve announced the establishment of temporary announced the establishment of temporary
U.S. dol ar liquidity arrangements (swap lines) with 9 central banks to help lessen U.S. dol ar liquidity arrangements (swap lines) with 9 central banks to help lessen
strains in global U.S. dol ar funding markets.strains in global U.S. dol ar funding markets. These new facilitiesThese new facilities ~~wil~~ wil support the support the
provision of U.S. dol ar liquidity in amounts up to $60 bil ion each for the Reserve provision of U.S. dol ar liquidity in amounts up to $60 bil ion each for the Reserve
Bank of Australia,Bank of Australia, the Banco Central do Brasil,the Banco Central do Brasil, the Bank of Korea,the Bank of Korea, the Banco de the Banco de
Mexico, the Monetary Authority of Singapore, and the SverigesMexico, the Monetary Authority of Singapore, and the Sveriges Riksbank, and $30 Riksbank, and $30
bil ion each for the Danmarks Nationalbank, the Norges Bank, and the Reservebil ion each for the Danmarks Nationalbank, the Norges Bank, and the Reserve Bank Bank
of New Zealand. of New Zealand.
March 19: The Board of Directors The Board of Directors of the of the New Development Bank approved approved
RMB 7 bil ion ($1 bil ion) Emergency Assistance ProgramRMB 7 bil ion ($1 bil ion) Emergency Assistance Program Loan to the People’s Loan to the People’s
Republic of China. The Program wilRepublic of China. The Program wil help finance urgent and unexpected public health help finance urgent and unexpected public health
expenditures in Hubei, Guangdong, and Henan. expenditures in Hubei, Guangdong, and Henan.
March 20: The The Development Bank of Latin America (CAF) announced that it announced that it
has opened an additional $2.5 bil ion line of credit to support the measureshas opened an additional $2.5 bil ion line of credit to support the measures that that
membermember countries are taking to mitigate the effects of COVID-19. On March 3, it countries are taking to mitigate the effects of COVID-19. On March 3, it
approved a credit line worth $300 mil ionapproved a credit line worth $300 mil ion to manage emergenciesto manage emergencies related to COVID-related to COVID-
19 and the possibility of granting technical help of up to $5 mil ion19 and the possibility of granting technical help of up to $5 mil ion for initiatives for initiatives
related to the outbreak in countries across the region. related to the outbreak in countries across the region.
March 26: The The Group of 20 (G20) announced that it would inject “over $5 tril ion announced that it would inject “over $5 tril ion
into the global economy, as part of targeted fiscal policy,into the global economy, as part of targeted fiscal policy, economic measures,economic measures, and and
guarantee schemesguarantee schemes to counteract the social,to counteract the social, economic and financial impacts” of economic and financial impacts” of
COVID-19. COVID-19.
Source: Congressional Congressional Research ServiceResearch Service based on information from news articles and press releases. based on information from news articles and press releases.

Author Information

James K. Jackson, Coordinator James K. Jackson, Coordinator
Andres B. Schwarzenberg Andres B. Schwarzenberg
Specialist in International Trade and Finance Specialist in International Trade and Finance
Analyst in International Trade and Finance Analyst in International Trade and Finance

Martin A. Weiss Martin A. Weiss
Rebecca M. Nelson Rebecca M. Nelson
Specialist in International Trade and Finance Specialist in International Trade and Finance
Specialist in International Trade and Finance Specialist in International Trade and Finance

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