Global Economic Effects of COVID-19

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Global Economic Effects of COVID-19
July July 2431, 2020 , 2020
Since the COVID-19 outbreak was first diagnosed, it has spread to over 200 countries and all Since the COVID-19 outbreak was first diagnosed, it has spread to over 200 countries and all
U.S. states. The pandemic is negatively affecting global economic growth beyond anything U.S. states. The pandemic is negatively affecting global economic growth beyond anything
James K. Jackson,
experienced in nearly a century. Estimates so far indicate the virus could trim global economic experienced in nearly a century. Estimates so far indicate the virus could trim global economic
Coordinator
growth by 3.0% to 6.0% in 2020, with a partial recovery in 2021, assuming there is not a second growth by 3.0% to 6.0% in 2020, with a partial recovery in 2021, assuming there is not a second
Specialist in International Specialist in International
wave of infections. The economic fallout from the pandemic raises the risks of a global economic wave of infections. The economic fallout from the pandemic raises the risks of a global economic
Trade and Finance Trade and Finance
recession with levels of unemployment not experienced since the Great Depression of the 1930s. 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 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 addition to the cost of rising levels of poverty, lives upended, careers derailed, and increased
Specialist in International Specialist in International
social unrest. Global trade could also fall by 13% to 32%, depending on the depth and extent of social unrest. Global trade could also fall by 13% to 32%, depending on the depth and extent of
Trade and Finance Trade and Finance
the global economic downturn, exacting an especially heavy economic toll on trade-dependent the global economic downturn, exacting an especially heavy economic toll on trade-dependent

developing and emerging economies. The full impact will not be known until the effects of the developing and emerging economies. The full impact will not be known until the effects of the
pandemic peak. This report provides an overview of the global economic costs to date and the pandemic peak. This report provides an overview of the global economic costs to date and the
Andres B. Schwarzenberg
response by governments and international institutions to address these effects. response by governments and international institutions to 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 global public health and economic January 2020. Since then, the emergency has evolved into a global public health and economic
crisis that has affected the $90 trillion global economy beyond anything experienced in nearly a crisis that has affected the $90 trillion global economy beyond anything experienced in nearly a
century. Governments are attempting to balance often-competing policy objectives between century. Governments are attempting to balance often-competing policy objectives between
addressing the public health crisis and economic considerations that include, but are not limited to addressing the public health crisis and economic considerations that include, but are not limited to
these: these:
 Confronting ballooning budget deficits weighed against increasing spending to  Confronting ballooning 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.
 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.
 Implementing fiscal policies to stimulate economic activity, while consumers in  Implementing fiscal policies to stimulate economic activity, while consumers in
developed economies sharply increase their savings as households face limited developed economies sharply increase their savings as households face limited
spending opportunities, or a form of involuntary saving, and concerns over their spending opportunities, or a form of involuntary saving, and concerns over their
jobs, incomes, and the course of their economies, or precautionary saving. jobs, incomes, and the course of their economies, or precautionary saving.
 Intervention by central banks and monetary authorities generally in sovereign  Intervention by central banks and monetary authorities generally in sovereign
debt and corporate bond markets to stabilize markets and insure liquidity are debt and corporate bond markets to stabilize markets and insure liquidity are
raising concerns among some analysts that this activity is compromising the raising concerns among some analysts that this activity is compromising the
ability of the markets to perform their traditional functions of pricing risk and ability of the markets to perform their traditional functions of pricing risk and
allocating capital. allocating capital.
 Fiscal and monetary policies that have been adopted to date to address the  Fiscal and monetary policies that have been adopted to date to address the
immediate impact of the health crisis compared with the mix of such policies immediate impact of the health crisis compared with the mix of such policies
between assisting households, firms, or state and local governments that may be between assisting households, firms, or state and local governments that may be
needed going forward should the health and economic crises persist. needed going forward should the health and economic crises persist.
Policymakers and financial and commodity market participants generally have been hopeful of a Policymakers and financial and commodity market participants generally have been hopeful of a
global economic recovery starting in the third quarter of 2020, assuming there is not a second global economic recovery starting 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 wave of infections. Some forecasts, however, raise the prospects that the pandemic could
negatively affect global economic growth more extensively and for a longer period of time with a negatively affect global economic growth more extensively and for a longer period of time with a
slow, drawn-out recovery. Without a quick resolution of the health crisis, the economic crisis may slow, drawn-out recovery. Without a quick resolution of the health crisis, the economic crisis may
persist longer than most forecasters have assumed and require policymakers to weigh the most persist longer than most forecasters have assumed and require policymakers to weigh the most
effective mix of additional fiscal and monetary policies that may be required without the benefit effective mix of additional fiscal and monetary policies that may be required without the benefit
of a relevant precedent to follow. Additional measures may have to balance the competing of a relevant precedent to follow. Additional measures may have to balance the competing
requirements of households, firms, and state and local governments. Various U.S. States reversed requirements of households, firms, and state and local governments. Various U.S. States reversed
course in late June to impose or reimpose social distancing guidelines and close down businesses course in late June to impose or reimpose social distancing guidelines and close down businesses
that had begun opening as a result of a rise in new confirmed cases of COVID-19, raising the that had begun opening as a result of a rise in new confirmed cases of COVID-19, raising the
prospect of a delayed recovery. prospect of a delayed recovery.
In In its July 29 policy statement and subsequent press conference, the U.S. Federal Open Market Committee (FOMC) indicated that the rise in COVID-19 cases in the United States since mid-June was weighing down economic growth and that, “The path of the economy will depend significantly on the course of the virus. 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.” Congressional Research Service 1 Global Economic Effects of COVID-19 In addition, a July forecast by the European Commission forecasts a larger drop in addition, a July forecast by the European Commission forecasts a larger drop in ~~GDP~~gross domestic product (GDP) in 2020 in 2020
among European economies than it had forecasted in its spring report, with a less vibrant among European economies than it had forecasted in its spring report, with a less vibrant
recovery in 2021. Differences in policy approaches between countries are threatening to inflict recovery in 2021. Differences in policy approaches between countries are threatening to inflict
longer-term damage to the global economy by impairing international political, trade, and longer-term damage to the global economy by impairing 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 response to the pandemic. Policy differences are also straining for a coordinated international response to the pandemic. Policy differences are also straining
relations between developed and developing economies and between northern relations between developed and developing economies and between northern and southern ~~and southern~~
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members of the Eurozone, challenging alliances and conventional concepts of national security, members of the Eurozone, challenging alliances and conventional concepts of national security,
and raising questions about the future of global leadership. and raising questions about the future of global leadership.
In some countries, the pandemic has elevated the importance of public health as a national 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 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 The concerns such as terrorism, cyberattacks, and proliferation of weapons of mass destruction.1 The
pandemic-related economic and human costs could have long-term repercussions for economies pandemic-related economic and human costs could have long-term repercussions for economies
through the tragic loss of life and job losses that derail careers and permanently shutter through the tragic loss of life and job losses that derail careers and permanently shutter
businesses. Fiscal and monetary measures implemented to prevent a financial crisis and sustain 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 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 some countries, the economic fallout is widening racial and socio-economic cleavages and
increasing social unrest. In speaking about these costs for Americans, Federal Reserve Chairman increasing social unrest. In speaking about these costs for Americans, Federal Reserve Chairman
Powell said on May 19, 2020, Powell 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.2 amid great uncertainty about the future.2
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
all U.S. states.3 In early March 2020, the focal point of infections shifted from China to Europe, all U.S. states.3 In early March 2020, the focal point of infections shifted from China to Europe,
especially Italy, but by April, the focus had shifted to the United States, where the number of especially 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 1416.4 million people, about one- million people, about one-
fourth in the United States, with nearly fourth in the United States, with nearly ~~600~~650,000 fatalities. At one point, more than 80 countries ,000 fatalities. At one point, more than 80 countries
had closed their borders to arrivals from countries with infections, ordered businesses to close, had closed 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 billion instructed their populations to self-quarantine, and closed schools to an estimated 1.5 billion
children.4 children.4
Over the Over the 1819-week period from mid-March to -week period from mid-March to ~~mid-~~late July 2020, July 2020, ~~52.7~~54 million Americans filed for million Americans filed for
unemployment insurance.5 On a seasonally adjusted basis, the number of insured unemployed unemployment insurance.5 On a seasonally adjusted basis, the number of insured unemployed
~~workers was 16.2 million in late-July, down from a peak of 25 million in mid-May, as indicated in~~
Table 1. The total number of people claiming benefits in all programs in the week ending July 4,
~~totaled 31.8 million, up from 1.7 million in the comparable week in 2019. The insured~~
~~unemployment rate was 11.1%, also down from the peak reached in early May. On May 8, 2020,~~
~~the Bureau of Labor Statistics (BLS) 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~~

1 Harris, Shane and Missy Ryan, To Prepare for the Next Pandemic, the U.S. Needs to Change its National Security 1 Harris, Shane and Missy Ryan, To Prepare for the Next Pandemic, the U.S. Needs to Change its National Security
Priorities, Experts Say, Priorities, Experts Say, The Washington Post, June 16, 2020. https://www.washingtonpost.com/national-security/to-, 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/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. b99807c0-aa9a-11ea-9063-e69bd6520940_story.html.
2 Powell, Jerome H. 2 Powell, Jerome H. Coronavirus and CARES Act, Testimony before the Committee on Banking, Housing and Urban Testimony before the Committee on Banking, Housing and Urban
Affairs, U.S. Senate, May 19, 2020. Affairs, U.S. Senate, May 19, 2020.
3 “Mapping the Spread of the COVID-19 in the U.S. and Worldwide,” Washington Post Staff, 3 “Mapping the Spread of the COVID-19 in the U.S. and Worldwide,” 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.
4 “The Day the World Stopped: How Governments Are Still Struggling to Get Ahead of the COVID-19,” 4 “The Day the World Stopped: How Governments Are Still Struggling to Get Ahead of the COVID-19,” The
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.
5 5 Unemployment Insurance Weekly Claims, Department of Labor, July , Department of Labor, July 2330, 2020. https://www.dol.gov/; Romm, Tony , 2020. https://www.dol.gov/; Romm, Tony
and Jeff Stein, 2.4 Million Americans Filed Jobless Claims Last Week, Bringing Nine Week Total to 38.6 Million, and Jeff Stein, 2.4 Million Americans Filed Jobless Claims Last Week, Bringing Nine Week Total 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-
coronavirus/ coronavirus/
~~6 This total does not include 10.9 million workers who were working part time not by choice and 9.9 million~~
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~~Global Economic Effects of COVID-19~~

Congressional Research Service 2 Global Economic Effects of COVID-19 workers was 17 million in late-July, down from a peak of 25 million in mid-May, as indicated in Table 1. The total number of people claiming benefits in all programs in the week ending July 11, totaled 30 million, up from 1.7 million in the comparable week in 2019. The insured unemployment rate was 11.6%, also down from the peak reached in early May. On May 8, 2020, the Bureau of Labor Statistics (BLS) 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 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 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 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 Americans to 21 million8 and pushing the unemployment rate down to 13.5%, again with some
caveats.9 On July 2, the BLS also released data on the employment situation in June, indicating caveats.9 On July 2, the BLS also released data on the employment situation in June, indicating
that non-farm payroll rose by 4.8 million, lowering the unemployment rate to 11.5%.10 that non-farm payroll rose by 4.8 million, lowering the unemployment rate to 11.5%.10
Table 1. Seasonally Adjusted Weekly Unemployment Insurance Claims
In thousands In thousands
Insured
Change from
Insured
Unemployment
Week Ending
Initial Claims
Prior Week
Unemployment
Rate
Total Claims
21-Mar-20 21-Mar-20
3,307 3,307
3,025 3,025
3,059 3,059
2.1% 2.1%
3,307 3,307
28-Mar-20 28-Mar-20
6,867 6,867
3,560 3,560
7,446 7,446
5.1 5.1
10,174 10,174
4-Apr-20 4-Apr-20
6,615 6,615
-252 -252
11,914 11,914
8.2 8.2
16,789 16,789
11-Apr-20 11-Apr-20
5,237 5,237
-1,378 -1,378
15,819 15,819
10.9 10.9
22,026 22,026
18-Apr-20 18-Apr-20
4,442 4,442
-795 -795
18,011 18,011
12.4 12.4
26,468 26,468
25-Apr-20 25-Apr-20
3,867 3,867
-575 -575
22,377 22,377
15.4 15.4
30,335 30,335
2-May-20 2-May-20
3,176 3,176
-691 -691
22,548 22,548
15.5 15.5
33,511 33,511
9-May-20 9-May-20
2,687 2,687
-489 -489
24,912 24,912
17.1 17.1
36,198 36,198
16-May-20 16-May-20
2,446 2,446
-241 -241
20,841 20,841
14.3 14.3
38,644 38,644
23-May-20 23-May-20
2,123 2,123
-323 -323
21,268 21,268
14.6 14.6
40,767 40,767
30-May-20 30-May-20
1,897 1,897
-226 -226
20,606 20,606
14.1 14.1
42,664 42,664
6-Jun-20 6-Jun-20
1,566 1,566
-331 -331
20,544 20,544
14.1 14.1
44,230 44,230
13-Jun-20 13-Jun-20
1,540 1,540
-26 -26
19,231 19,231
13.2 13.2
45,770 45,770
~~20-Jun-20~~
~~1,482~~
~~-58~~
~~19,290~~
~~13.2~~
~~47,252~~
~~27-Jun-20~~
~~1,408~~
~~-74~~
~~17,760~~
~~12.2~~
~~48,660~~
~~4-Jul-20~~
~~1,310~~
~~-98~~
~~17,304~~
~~11.8~~
~~49,970~~
~~11-Jul-20~~
~~1,307~~
-3
~~16,197~~
~~11.1~~
~~51,270~~
~~18-Jul-20~~
~~1,416~~
~~109~~

~~52,693~~

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. individuals who were seeking employment.
7 7 The Employment Situation-April 2020, Bureau of Labor Statistics, May 8, 2020. https://www.bls.gov/. , 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 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. individuals who were seeking employment.
9 9 The Employment Situation-May 2020, Bureau of Labor Statistics, June 5, 2020, https://www.bls.gov/. BLS indicated , Bureau of Labor Statistics, June 5, 2020, https://www.bls.gov/. BLS indicated
that some individuals were misclassified in April and May. Instead of being classified as unemployed, they were that some individuals were misclassified in April and May. Instead of being classified as unemployed, they were
misclassified as employed, but absent from work due to coronavirus-related business closures. If such individuals had misclassified 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 5 percentage points higher in April. been classified as unemployed, the unemployment rate would have been 5 percentage points higher in April.
10 10 The Employment Situation-June 2020, Bureau of Labor Statistics, July 2, 2020. https://www.bls.gov/. The , Bureau of Labor Statistics, July 2, 2020. https://www.bls.gov/. The
unemployment number does not include 9 million workers who were working part time not by choice and 9 million unemployment number does not include 9 million workers who were working part time not by choice and 9 million
individuals seeking employment. In addition, BLS indicated that some workers had been misclassified as employed, individuals seeking employment. In addition, BLS indicated that some workers had been misclassified as employed,
but should have been classified as unemployed, which would have raised the rate of unemployment by one percentage but should have been classified as unemployed, which would have raised the rate of unemployment by one percentage
point. point.
Congressional Research Service Congressional Research Service

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Global Economic Effects of COVID-19

20-Jun-20 1,482 -58 19,290 13.2 47,252 27-Jun-20 1,408 -74 17,760 12.2 48,660 4-Jul-20 1,310 -98 17,304 11.8 49,970 11-Jul-20 1,308 -2 16,151 11.1 51,278 18-Jul-20 1,422 114 17,018 11.6 52,700 25-Jul-20 1,434 12 54,134 Source: Department of Labor, CRS calculations. Department of Labor, CRS calculations.
Preliminary data also indicate that U.S. GDP fell by Preliminary data also indicate that U.S. GDP fell by ~~5.0~~9.5% in the % in the ~~first~~second quarter of 2020 from the previous quarter, but at an annualized rate of 33% ~~quarter of 2020~~, the largest , the largest
quarterly decline in quarterly decline in ~~GDP since the fourth quarter of 2008 during the global financial crisis~~U.S. GDP recorded over the past 70 years.11 In its .11 In its
May 27 Beige Book analysis, the Federal Reserve (Fed) reported that economic activity had May 27 Beige Book analysis, the Federal Reserve (Fed) reported that economic activity had
fallen sharply in each of the 12 Federal Reserve districts.12 fallen sharply in each of the 12 Federal Reserve districts.12
In Europe, governments In Europe, governments ~~are attempting~~have attempted a phased reopening of businesses, but over 30 million a phased reopening of businesses, but over 30 million
people in Germany, France, the UK, Spain, and Italy have applied for state support of their 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 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 1995.13 annual rate, the largest quarterly decline since the series began in 1995.13 A resurgence in COVID-19 cases across much of Europe has caused policymakers to reimpose business lockdowns and social distancing and extend travel restrictions.14 Industrial production Industrial production
across the Eurozone as a whole fell by 17% in April, raising the annual decline to 28%, across the Eurozone as a whole fell by 17% in April, raising the annual decline to 28%,
surpassing the contraction experienced during the global financial crisis.surpassing the contraction experienced during the global financial crisis.1415 The European The European
Commission’s July 8, 2020, forecast projected that EU economic growth in 2020 could contract Commission’s July 8, 2020, forecast projected that EU economic growth in 2020 could contract
by 8.3% and only partially recover in 2021.by 8.3% and only partially recover in 2021.1516 After protracted talks, European leaders agreed on After protracted talks, European leaders agreed on
July 21 to a new €750 billion (about $859 billion) pandemic economic assistance package to July 21 to a new €750 billion (about $859 billion) pandemic economic assistance package to
support European economies. support European economies.
On May 27, 2020, European Central Bank (ECB) President Christine Lagarde warned that the On May 27, 2020, European Central Bank (ECB) President Christine Lagarde warned that the
Eurozone economy could contact by 8% to 12% in 2020, a level of damage to the Eurozone 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 peacetime.economy that Lagarde characterized as being unsurpassed in peacetime.1617 Foreign investors have Foreign investors have
pulled an estimated $26 billion out of developing Asian economies not including more than $16 pulled an estimated $26 billion out of developing Asian economies not including more than $16
billion out of India, increasing concerns about a major economic recession in Asia. Some billion out of India, increasing concerns about a major economic recession in Asia. Some
~~estimates indicate that 29 million people in Latin America could fall into poverty, reversing a~~
~~decade of efforts to narrow income inequality. Some analysts are also concerned that Africa, after~~
~~escaping the initial spread of infections, is now facing a sharp increase in rates of infection~~
~~outside South Africa, Egypt, Nigeria, Algeria, and Ghana, where most of the infections have~~
~~occurred to date.17~~
~~Economic Policy Responses~~
~~After a delayed response, central banks and monetary authorities in developed and emerging~~
~~market economies have engaged in an ongoing series of interventions in financial markets and~~
~~national governments have adopted an array of fiscal policy initiatives to stimulate their~~

11 11 Gross Domestic Product, ~~First~~2nd Quarter 2020 (~~Second~~Advance Estimate) and Annual Update,, Bureau of Economic Analysis, Bureau of Economic Analysis, ~~May 28~~July 30, 2020. , 2020.
https://www.bea.gov/https://www.bea.gov/~~data/gdp~~news/2020/gross-domestic-product/gross-domestic-product.
-2nd-quarter-2020-advance-estimate-and-annual-update. 12 12 The Beige Book, Federal Reserve System, May 27, 2020. https://www.federalreserve.gov/monetarypolicy/beige-, Federal Reserve System, May 27, 2020. https://www.federalreserve.gov/monetarypolicy/beige-
book-default.htm. book-default.htm.
13 Stott, Michael, Coronavirus Set to Push 29m Latin Americans Into Poverty, 13 Stott, Michael, Coronavirus Set to Push 29m Latin Americans Into Poverty, Financial Times, April 24, 2020. , April 24, 2020.
https://www.ft.com/content/3bf48b80-8fba-410c-9bb8-31e33fffc3b8; Hall, Benjamin, Coronavirus Pandemic https://www.ft.com/content/3bf48b80-8fba-410c-9bb8-31e33fffc3b8; Hall, Benjamin, Coronavirus Pandemic
Threatens Livelihoods of 59m European Workers, Threatens Livelihoods of 59m European Workers, Financial Times, April 19, 2020, https://www.ft.com/content/, 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 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.
14 14 Chazan, Guy and Anna Gross, Europe Battles to Contain Surge in Coronavirus Cases. Financial Times, July 29, 2020. https://www.ft.com/content/bcddc297-b7f2-444d-908f-54e8ce6f4f98. 15 Arnold, Martin, Eurozone Industrial Production Falls by Record 17.1% in April, Arnold, Martin, Eurozone Industrial Production Falls by Record 17.1% in April, Financial Times, June 12, 2020. , June 12, 2020.
https://www.ft.com/content/e3301cd6-27ce-35f0-829a-c6613849b378, https://www.ft.com/content/e3301cd6-27ce-35f0-829a-c6613849b378,
1516 European Economic Forecast Summer 2020, European Commission, July 8, 2020. , European Commission, July 8, 2020.
1617 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.
~~17 Pilling, David, The Pandemic is Getting Worse: Africa Prepares for Surge in Infections, Financial Times, July 20,~~
~~2020. https://www.ft.com/content/1b3274ce-de3b-411d-8544-a024e64c3542.~~
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4

~~Global Economic Effects of COVID-19~~

Congressional Research Service 4 Global Economic Effects of COVID-19 estimates indicate that 29 million people in Latin America could fall into poverty, reversing a decade of efforts to narrow income inequality. Some analysts are also concerned that Africa, after escaping the initial spread of infections, is now facing a sharp increase in rates of infection outside South Africa, Egypt, Nigeria, Algeria, and Ghana, where most of the infections have occurred to date.18 Economic Policy Responses After a delayed response, central banks and monetary authorities in developed and emerging market economies have engaged in an ongoing series of interventions in financial markets and national governments have adopted an array of fiscal policy initiatives to stimulate their economies. The Bank for International Settlements (BIS) has characterized the pandemic as fully economies. The Bank for International Settlements (BIS) has characterized the pandemic as fully
global in nature, eliciting a fiscal, monetary, and prudential response that has surpassed that of the global in nature, eliciting a fiscal, monetary, and prudential response that has surpassed that of the
global financial crisis of 2008-2009. In addition, the BIS argues that the evolving nature of the global financial crisis of 2008-2009. In addition, the BIS argues that the evolving nature of the
health crisis is causing the financial crisis to evolve as well, changing from a liquidity crisis in the health crisis is causing the financial crisis to evolve as well, changing from a liquidity crisis in the
initial stages to a solvency crisis that could worsen if the economic recovery is delayed. As a initial stages to a solvency crisis that could worsen if the economic recovery is delayed. As a
result of the potential damage to the global economy arising from the pandemic, the BIS stated result of the potential damage to the global economy arising from the pandemic, the BIS stated
that future economic historians may describe the pandemic as, “the defining moment of the 21st that future economic historians may describe the pandemic as, “the defining moment of the 21st
century.”century.”18 19 As indicated in As indicated in Table 2, central governments have adopted fiscal measures to provide , central governments have adopted fiscal measures to provide
support to the health sector, households, and firms, although the size and scope of the programs support to the health sector, households, and firms, although the size and scope of the programs
vary by country.vary by country.1920 These measures broadly include: tax cuts and tax deferrals, wage and income These measures broadly include: tax cuts and tax deferrals, wage and income
supplements to individuals, including expanding unemployment insurance; and tax cuts, tax supplements to individuals, including expanding unemployment insurance; and tax cuts, tax
deferrals, and other payments to businesses. The U.S. Congress also has approved historic fiscal deferrals, and other payments to businesses. The U.S. Congress also has approved historic fiscal
spending packages. In other countries, governments abandoned traditional borrowing caps to spending packages. In other countries, governments abandoned traditional borrowing caps to
increase fiscal spending in order to sustain economic growth. In some emerging economies, increase fiscal spending in order to sustain economic growth. In some emerging economies,
governments reportedly adopted special programs to provide financial assistance to “informal” governments reportedly adopted special programs to provide financial assistance to “informal”
workers, or workers outside traditional labor markets such as family businesses.workers, or workers outside traditional labor markets such as family businesses.2021 In developed economies, however, as governments are adopting fiscal packages to assist households, consumers have sharply increased their savings as they face limited spending opportunities, or a form of involuntary saving, and concerns over lost jobs, incomes, and the course of their economies, or precautionary saving. (For additional (For additional
countries and measures, see countries and measures, see Appendix A of this report.) International organizations also took of this report.) International organizations also took
steps to provide loans and other financial assistance to countries in need. These and other actions steps to provide loans and other financial assistance to countries in need. These and other actions
have been labeled “unprecedented,” a term that has been used frequently to describe the have been labeled “unprecedented,” a term that has been used frequently to describe the
pandemic and the policy responses. pandemic and the policy responses.

18 18 Pilling, David, The Pandemic is Getting Worse: Africa Prepares for Surge in Infections, Financial Times, July 20, 2020. https://www.ft.com/content/1b3274ce-de3b-411d-8544-a024e64c3542. 19 Annual Economic Report 2020, Bank for International Settlements, June 2020, p. ix. , Bank for International Settlements, June 2020, p. ix.
1920 Ibid. Ibid.
2021 Ibid, p. 25. Ibid, p. 25.
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Table 2. Elements of Announced Fiscal Measures to Address COVID-19

Advanced Economies Advanced Economies
Emerging Market Economies Emerging Market Economies

Measures Measures
US US
JP JP
DE DE
FR FR
IT IT
ES ES
GB GB
BR BR
CN CN
ID ID
IN IN
KR KR
MX MX
RU RU
ZA ZA
Measures supporting the health sector

x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
Measures supporting households

Targeted transfers a Targeted transfers a
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x

x x
x x

Other labor income Other labor income
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x

x x
x x
support b support b

Wage subsidies Wage subsidies
x x
x x
x x
x x
x x
x x
x x
x x
x x

x x
x x

x x
x x

Tax cuts Tax cuts
x x
x x
x x
x x

x x

x x
x x
x x
x x

x x
x x
Tax deferral Tax deferral
x x
x x
x x

x x
x x
x x

x x
x x
x x

x x
Measures supporting firms
Tax deferral Tax deferral
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
Liquidity support c Liquidity support c
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
Tax cuts Tax cuts
x x
x x
x x

x x
x x
x x
x x
x x
x x
x x
x x

x x

Targeted transfers Targeted transfers

x x
x x
x x
x x

x x

x x
x x

x x
x x
Source: Annual Economic Report 2020, Bank for International Settlements, June 2020, p. 24, based on data collected by the International Monetary Fund and the , Bank for International Settlements, June 2020, p. 24, based on data collected by the International Monetary Fund and the
Organization for Economic Cooperation and Development. Organization for Economic Cooperation and Development.
Notes: a. Includes cash and in-kind transfers to affected households. b. Extended unemployment and sick leave benefits. c. Non-budgetary measures such as equity a. Includes cash and in-kind transfers to affected households. b. Extended unemployment and sick leave benefits. c. Non-budgetary measures such as equity
injections, asset purchases, loans and debt assumptions or government guarantees and contingent liabilities, US: United States; JP: Japan; DE: Germany; FR: France; IT: injections, asset purchases, loans and debt assumptions or government guarantees and contingent liabilities, US: United States; JP: Japan; DE: Germany; FR: France; IT:
Italy; ES: Spain; GB: Great Britain; BR: Brazil; CN: China; ID: Indonesia; IN: India; KR: South Korea; MX: Mexico; RU: Russia; ZA: South Africa. Italy; ES: Spain; GB: Great Britain; BR: Brazil; CN: China; ID: Indonesia; IN: India; KR: South Korea; MX: Mexico; RU: Russia; ZA: South Africa.

CRS-6 CRS-6

Global Economic Effects of COVID-19

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-June 2020 amounted to $5.4 trillion and that loans, equity injections and adopted through mid-June 2020 amounted to $5.4 trillion and that loans, equity injections and
guarantees totaled an additional $5.4 trillion, or a total of $11 trillion.guarantees totaled an additional $5.4 trillion, or a total of $11 trillion.2122 The IMF also updated its The IMF also updated its
estimate of the increase in borrowing by governments globally to rise from 3.9% of global gross estimate of the increase in borrowing by governments globally to rise from 3.9% of global gross
domestic product (GDP) in 2019 to 13.9% in 2020, as indicated in domestic product (GDP) in 2019 to 13.9% in 2020, as indicated in Figure 1. Other estimates . Other estimates
indicate that central banks have committed $17 trillion to support their economies to counter indicate that central banks have committed $17 trillion to support their economies to counter
pandemic-related economic effects.pandemic-related economic effects.2223
Among developed economies, the fiscal Among developed economies, the fiscal ~~balance~~deficit to GDP ratio is projected to rise from 3.3% in to GDP ratio is projected to rise from 3.3% in
2019 to 16.6% in 2020; the ratio for the United States is projected to rise from 6.3% to 23.8%, 2019 to 16.6% in 2020; the ratio for the United States is projected to rise from 6.3% to 23.8%,
respectively, the highest ratio for any country or region.respectively, the highest ratio for any country or region.2324 According to the IMF, France, According to the IMF, France,
Germany, Italy, Japan, and the United Kingdom have each announced public sector support Germany, Italy, Japan, and the United Kingdom have each announced public sector support
measures that total more than 10% of their annual GDP.measures that total more than 10% of their annual GDP.2425 For developing economies, the fiscal For developing economies, the fiscal
~~balance~~deficit to GDP ratio is projected to rise from 4.9% to 10.6%, significantly increasing their debt to GDP ratio is projected to rise from 4.9% to 10.6%, significantly increasing their debt
burden and raising prospects of defaults or debt rescheduling.burden and raising prospects of defaults or debt rescheduling.2526 According to some estimates, the According to some estimates, the
most fiscally vulnerable countries are Argentina, Venezuela, Lebanon, Jordan, Iran, Zambia, most fiscally vulnerable countries are Argentina, Venezuela, Lebanon, Jordan, Iran, Zambia,
Zimbabwe, and South Africa.Zimbabwe, and South Africa.2627 The IMF concluded that among developing countries high debt The IMF concluded that among developing countries high debt
levels could become “unmanageable” and test the resilience of banks in some countries.levels could become “unmanageable” and test the resilience of banks in some countries.2728
The IMF also argued there is a growing disconnect between the pricing of risk in financial The IMF also argued there is a growing disconnect between the pricing of risk in financial
markets and projected economic prospects, because investors apparently expect a quick recovery markets and projected economic prospects, because investors apparently expect a quick recovery
based on continued and unprecedented central bank intervention. However, a perceived or real based on continued and unprecedented central bank intervention. However, a perceived or real
shift in central bank intervention in financial markets could negatively affect investors’ concept of shift in central bank intervention in financial markets could negatively affect investors’ concept of
risk and, in turn, negatively affect asset markets and the economic recovery.risk and, in turn, negatively affect asset markets and the economic recovery.2829 In addition to In addition to
central banks’ actions, the IMF concludes that a number of pre-existing vulnerabilities could central banks’ actions, the IMF concludes that a number of pre-existing vulnerabilities could
affect the timing and the rate of the economic recovery. These vulnerabilities include: corporate affect the timing and the rate of the economic recovery. These vulnerabilities include: corporate
and household debt levels in developed and some emerging economies that could become and household debt levels in developed and some emerging economies that could become
unmanageable in a prolonged recession; a rising number of insolvencies that could test the unmanageable in a prolonged recession; a rising number of insolvencies that could test the
resilience of the banking sector; additional stresses that could affect nonbank financial resilience of the banking sector; additional stresses that could affect nonbank financial
institutions; and the prospect of some developing economies facing high external financing institutions; and the prospect of some developing economies facing high external financing
requirements.requirements.2930

2122 World Economic Outlook Update, International Monetary Fund, June 24, 2020. p. 16. , International Monetary Fund, June 24, 2020. p. 16.
2223 Wigglesworth, Robin, Long Live Jay Powell, the New Monarch of the Bond Market, Wigglesworth, Robin, Long Live Jay Powell, the New Monarch of the Bond Market, Financial Times, June 23, , June 23,
2020. https://www.ft.com/content/5db9d0f1-3742-49f0-a6cd-16c471875b5e. 2020. https://www.ft.com/content/5db9d0f1-3742-49f0-a6cd-16c471875b5e.
2324 World Economic Outlook Update, p. 20. , p. 20.
2425 Global Financial Stability Report Update. International Monetary Fund, June 2020, p. 2. . International Monetary Fund, June 2020, p. 2.
2526 Ibid., p. 6. Ibid., p. 6.
2627 Wheatley, Jonathan, Tommy Stubbington, Michael Stott, Andrew England, and Joseph Cotterill, Debt Relief: Which Wheatley, Jonathan, Tommy Stubbington, Michael Stott, Andrew England, and Joseph Cotterill, Debt Relief: Which
Countries Are Most Vulnerable? Countries Are Most Vulnerable? Financial Times, May 6, 2020. https://www.ft.com/content/31ac88a1-9131-4531-, May 6, 2020. https://www.ft.com/content/31ac88a1-9131-4531-
99be-7bfd8394e8b9. 99be-7bfd8394e8b9.
2728 Global Financial Stability Report Update, p. 2. p. 2.
2829 Ibid, p. 4. Ibid, p. 4.
2930 Ibid, p. 6-7. Ibid, p. 6-7.
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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: World Economic Outlook Update. International Monetary Fund, June 24, 2020, p. 20. Created by CRS. . International Monetary Fund, June 24, 2020, p. 20. 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. 2008-2009 global financial crisis to address the growing economic effects of COVID-19.
Simultaneously, as indicated in Simultaneously, as indicated in Table 3, central banks and monetary authorities have adopted an , central banks and monetary authorities have adopted an
array of measures to address the potential economic effects of the pandemic, including lowering array of measures to address the potential economic effects of the pandemic, including lowering
interest rates and reserve requirements, announcing new lending and financing facilities, asset interest rates and reserve requirements, announcing new lending and financing facilities, asset
purchases, foreign exchange swaps, prudential measures, and relaxed capital buffers and, in some purchases, foreign exchange swaps, prudential measures, and relaxed capital buffers and, in some
cases, countercyclical capital buffers,cases, countercyclical capital buffers,3031 adopted after the 2008-2009 financial crisis, potentially adopted after the 2008-2009 financial crisis, potentially
freeing up an estimated $5 trillion in funds.freeing up an estimated $5 trillion in funds.3132
Central banks not only filled the role of lender of last resort through large purchases of Central banks not only filled the role of lender of last resort through large purchases of
government debt, but also the buyers or lenders of last resort for private sector securities, in many government debt, but also the buyers or lenders of last resort for private sector securities, in many
cases engaging in activities that previously had been considered off-limits. As a result of these cases engaging in activities that previously had been considered off-limits. As a result of these
activities, the BIS argues that central banks effectively managed the initial liquidity crisis, the activities, the BIS argues that central banks effectively managed the initial liquidity crisis, the
first of three phases often identified with financial crises. The second and third phases, insolvency first of three phases often identified with financial crises. The second and third phases, insolvency
and recovery, are still being navigated and could become more challenging should the pandemic-and recovery, are still being navigated and could become more challenging should the pandemic-
related economic crisis be prolonged. Capital buffers were raised after the financial crisis to assist related economic crisis be prolonged. Capital buffers were raised after the financial crisis to assist
banks in absorbing losses and staying solvent during financial crises. In some cases, governments banks in absorbing losses and staying solvent during financial crises. In some cases, governments
have directed banks to freeze dividend payments and halt pay bonuses. The Financial Stability have directed banks to freeze dividend payments and halt pay bonuses. The Financial Stability
Board (FSB) argued in its July 15, 2020Board (FSB) argued in its July 15, 2020, report to the G-20 Finance Ministers and Governors that report to the G-20 Finance Ministers and Governors that
the actions taken to date to support the functioning of the global financial system have effectively the actions taken to date to support the functioning of the global financial system have effectively

3031 Countercyclical capital buffers require banks to increase their capital buffers during periods of rapid growth in assets 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. (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/. , Bank for International Settlements, April 3, 2020. https://www.bis.org/bcbs/ccyb/.
3132 Arnold, Martin, “Regulators Free up $500bn Capital for Lenders to Fight Virus Storm,” Arnold, Martin, “Regulators Free up $500bn Capital for Lenders to Fight Virus Storm,” Financial Times, April 7, April 7,
2020. https://www.ft.com/content/9a677506-a44e-4f69-b852-4f34018bc45f. 2020. https://www.ft.com/content/9a677506-a44e-4f69-b852-4f34018bc45f.
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Global Economic Effects of COVID-19

worked to contain the financial and economic impact of the pandemic, but the crisis is not yet worked to contain the financial and economic impact of the pandemic, but the crisis is not yet
over and it is not possible to assess whether the actions have achieved their intended results.over and it is not possible to assess whether the actions have achieved their intended results.3233
On March 11, the WHO announced that the viral outbreak was officially a pandemic, the highest On March 11, the WHO announced that the viral outbreak was officially a pandemic, the highest
level of health emergency.level of health emergency.3334 A growing list of economic indicators makes it clear that the outbreak A growing list of economic indicators makes it clear that the outbreak
is negatively affecting global economic growth on a scale not experienced since at least the global is negatively affecting global economic growth on a scale not experienced since at least the global
financial crisis of 2008-2009.financial crisis of 2008-2009.~~34 Various forecasts estimate that global trade and GDP will decline~~
~~sharply, at least through the first half of 2020.~~35 The global pandemic is affecting a broad swath of The global pandemic is affecting a broad swath of
international economic and trade activities, from services generally to tourism and hospitality, international economic and trade activities, from services generally 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
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. Forecasts have been updated several times during the first half of 2020 to are speculative. Forecasts have been updated several times during the first half of 2020 to
incorporate additional data, often reflecting worsening global and national economic growth incorporate additional data, often reflecting worsening global and national economic growth
estimates. Efforts to reduce social interaction to contain the spread of the virus are disrupting the estimates. 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 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.3536 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.3637

3233 COVID-19 Pandemic: Financial Stability Implications and Policy Measures Taken: Report Submitted to the G-20
Finance Ministers and Governors, Financial Stability Board, July 15, 2020. , Financial Stability Board, July 15, 2020.
3334 Bill Chappell, “COVID-19: COVID-19 Is Now Officially a Pandemic, WHO Says,” Bill Chappell, “COVID-19: COVID-19 Is Now Officially a Pandemic, WHO Says,” National Public Radio, March , March
11, 2020, https://www.npr.org/sections/goatsandsoda/2020/03/11/814474930/COVID-19-COVID-19-is-now-officially-11, 2020, https://www.npr.org/sections/goatsandsoda/2020/03/11/814474930/COVID-19-COVID-19-is-now-officially-
a-pandemic-who-says. a-pandemic-who-says.
3435 Mapping the Spread of the COVID-19. Mapping the Spread of the COVID-19.
3536 Sly, Liz, Stirrings of Unrest Around the World Could Portend Turmoil as Economies Collapse 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 April 19, 2020; Ingraham, Christopher, Coronavirus Recession Could Plunge Tens 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/.
3637 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 Congressional Research Service

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Table 3. Selected Central Bank and Prudential Measures to Address COVID-19

Advanced economies Advanced economies
Emerging market economies Emerging market economies

Type of tool Type of tool
Measures Measures
US US
EA EA
JP JP
GB GB
CA CA
AU AU
CH CH
BR BR
CN CN
ID ID
IN IN
KR KR
MX MX
TH TH
ZA ZA

Interest rate Interest rate
Policy rate cut Policy rate cut
x x

x x
x x
x x

x x
x x
x x
x x
x x
x x
x x
x x

Lending Lending
Gen. liquidity Gen. liquidity
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
liquidity liquidity
provision a provision a

Specialized Specialized
x x
x x
x x
x x

x x
x x
x x
x x

x x
x x
x x
x x

lending lending

Asset Asset
Government Government
x x
x x
x x
x x
x x
x x

x x
x x
x x

x x
x x
purchases/ purchases/
bonds bonds
sales sales

Commercial Commercial
x x
x x
x x
x x
x x

x x

paper paper

Corporate Corporate
x x
x x
x x
x x
x x

x x

x x

bonds bonds

Other private Other private

x x
x x

x x

securities b securities b

FX swap/ FX swap/
USD swap line USD swap line

x x
x x
x x
x x
x x
x x
x x

x x
x x

intervention intervention

FX FX

x x
x x

x x
x x
x x
x x

intervention intervention

Prudential Prudential
Capital Capital
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x

x x
rules and rules and
requirements requirements
regulations regulations

Liquidity Liquidity
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x

requirements requirements

Payout Payout

x x

x x
x x
x x
x x
x x

x x
x x
x x
x x
x x
x x
restrictions restrictions

Market Market

x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
x x
functioning c functioning c

Source: Annual Economic Report 2020, Bank for International Settlements, June 2020, p. 23. , Bank for International Settlements, June 2020, p. 23.
CRS-10 CRS-10

Notes: a. Repo and reverse repo operations, standing facilities, modified discount window and lower reserve requirement ratio. b. Asset- and mortgage-backed : a. Repo and reverse repo operations, standing facilities, modified discount window and lower reserve requirement ratio. b. Asset- and mortgage-backed
securities, covered bonds and exchange-traded funds. c. Shortsel ing bans and circuit breakers. US: United States; EA: Euro Area; JP: Japan; GB: Great Britain; CA: securities, covered bonds and exchange-traded funds. c. Shortsel ing bans and circuit breakers. US: United States; EA: Euro Area; JP: Japan; GB: Great Britain; CA:
Canada; AU: Australia; CH: Switzerland; BR: Brazil; CN: China; ID: Indonesia; IN: India; KR: South Korea; MX: Mexico; TH: Thailand; ZA: South Africa. Canada; AU: Australia; CH: Switzerland; BR: Brazil; CN: China; ID: Indonesia; IN: India; KR: South Korea; MX: Mexico; TH: Thailand; ZA: South Africa.

CRS-11 CRS-11

link to page 17 link to page 17 Global Economic Effects of COVID-19

Economic Forecasts
Global Growth
The economic situation, remains highly fluid globally and for most countries and regions. The economic situation, remains highly fluid globally and for most countries and regions.
Uncertainty about the length and depth of the health crisis-related economic effects are fueling Uncertainty about the length and depth of the health crisis-related economic effects are fueling
perceptions of risk and volatility in financial markets and corporate decision-making. In addition, perceptions of risk and volatility in financial markets and corporate decision-making. In addition,
uncertainties concerning the global pandemic and the effectiveness of public policies intended to uncertainties concerning the global pandemic and the effectiveness of public policies intended to
contain its spread and prevent a second wave of infections are adding to market volatility. In a contain its spread and prevent a second wave of infections are adding to market volatility. 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
who previously had been furloughed, and in some cases filing for bankruptcy. Compounding the 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. While prices have recovered economic situation has been a historic drop in the price of crude oil. While prices have recovered
somewhat from the low of nearly $20 per barrel in April, they continue to hover around $40 to somewhat from the low of nearly $20 per barrel in April, they continue to hover around $40 to
$45 per barrel, reflecting the decline in global economic activity, while also contributing to the $45 per barrel, reflecting the decline in global economic activity, while also contributing to the
decline of the global economy through various channels. On April 29, 2020, Federal Reserve 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 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 support economic activity as the U.S. economic growth rate dropped by 533.0% at an annual rate in .0% at an annual rate in
~~the first~~the second quarter of 2020. In assessing the state of the U.S. economy, the Federal Open Market 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 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 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.”3738
Before the COVID-19 outbreak, the global economy was struggling to regain a broad-based 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 recovery as a result of the lingering impact of growing trade protectionism, trade disputes among
major trading partners, falling commodity and energy prices, and economic uncertainties in 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 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 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 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 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 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 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 organize their work forces, on global supply chains, and how governments respond to a global
health crisis.health crisis.3839 As a result of the rapidly spreading virus and its compounding effects on global As a result of the rapidly spreading virus and its compounding effects on global
and national rates of economic growth, forecasting the impact of the virus has been especially and national rates of economic growth, forecasting the impact of the virus has been especially
challenging. challenging.
As indicated i As indicated in Table 4, the International Monetary Fund (IMF), the Organization for Economic he International Monetary Fund (IMF), the Organization for Economic
Cooperation and Development (OECD), and The World Bank all revised their forecasts Cooperation and Development (OECD), and The World Bank all revised their forecasts
downward between late 2019 and mid-20, reflecting the rapidly deteriorating state of the global downward between late 2019 and mid-20, reflecting the rapidly deteriorating state of the global
economy and a marked decline in projected rates of growth. Between October 2019 and June economy and a marked decline in projected rates of growth. Between October 2019 and June
2020, for instance, the IMF lowered its global economic growth forecast from a positive 3.4% to 2020, for instance, the IMF lowered its global economic growth forecast from a positive 3.4% to
a negative 4.9%. Similarly, the OECD lowered its forecast from 2.9% in November 2019 a negative 4.9%. Similarly, the OECD lowered its forecast from 2.9% in November 2019
to -6.0% to -7.6% in June 2020, depending on a single or double wave of infections. Between to -6.0% to -7.6% in June 2020, depending on a single or double wave of infections. Between

3738 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.
3839 Rowland, Christopher and Peter Whoriskey, “U.S. Health System is Showing Why It’s Not Ready for a COVID-19 Rowland, Christopher and Peter Whoriskey, “U.S. Health System is Showing Why It’s Not Ready for a COVID-19
Pandemic,” Pandemic,” Washington Post, March 4, 2020. https://www.washingtonpost.com/business/economy/the-us-health-, 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-system-is-showing-why-its-not-ready-for-a-COVID-19-pandemic/2020/03/04/7c307bb4-5d61-11ea-b29b-
9db42f7803a7_story.html. 9db42f7803a7_story.html.
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January 2020 and June 2020, the World Bank also lowered its forecast of global growth from January 2020 and June 2020, the World Bank also lowered its forecast of global growth from
2.9% to a negative 5.2%. In most forecasts, advanced economies are projected to experience the 2.9% to a negative 5.2%. In most forecasts, advanced economies are projected to experience the
steepest declines in economic growth from 2019 to mid-June 2020. steepest declines in economic growth from 2019 to mid-June 2020.
Table 4. Major Economic Forecasts, Differing Assessments
Percentage changes at annual rates Percentage changes at annual rates
World
Advanced economies Developing economies United States

2020 2020
2021 2021
2020 2020
2021 2021
2020 2020
2021 2021
2020 2020
2021 2021
IMF October 2019 IMF October 2019
3.4% 3.4%
3.6% 3.6%
1.7% 1.7%
1.6% 1.6%
4.6% 4.6%
4.8% 4.8%
-5.9% -5.9%
4.7% 4.7%
IMF April 2020 IMF April 2020
–3.0 –3.0
5.8 5.8
–6.1 –6.1
4.5 4.5
–1.0 –1.0
6.6 6.6
–5.9 –5.9
4.7 4.7
IMF June 2020 IMF June 2020
-4.9 -4.9
5.4 5.4
-8.0 -8.0
4.8 4.8
-3.0 -3.0
5.9 5.9
-8.0 -8.0
4.5 4.5
OECD Nov 2019 OECD Nov 2019
2.9 2.9
3.0 3.0
1.6 1.6
1.7 1.7
4.0 4.0
4.0 4.0
2.0 2.0
2.0 2.0
OECD March 2020 OECD March 2020
2.4 2.4
3.3 3.3
0.8 0.8
1.2 1.2
NA NA
NA NA
1.9 1.9
2.1 2.1
OECD June 2020 single OECD June 2020 single
-6.0 -6.0
5.2 5.2
-7.5 -7.5
4.8 4.8
-4.6 -4.6
5.6 5.6
-7.3 -7.3
4.1 4.1
OECD June 2020 double OECD June 2020 double
-7.6 -7.6
2.8 2.8
-9.3 -9.3
2.2 2.2
-6.1 -6.1
3.2 3.2
-8.5 -8.5
1.9 1.9
World Bank January 2020 World Bank January 2020
2.5 2.5
2.6 2.6
1.4 1.4
1.5 1.5
4.1 4.1
4.3 4.3
1.8 1.8
1.7 1.7
World Bank June 2020 World Bank June 2020
-5.2 -5.2
4.2 4.2
-7.0 -7.0
3.9 3.9
-2.5 -2.5
4.6 4.6
-6.1 -6.1
4.0 4.0
Source: World Economic Outlook, various issues, International Monetary Fund; , various issues, International Monetary Fund; OECD Economic Outlook, various various
issues, Organization for Economic Cooperation and Development; issues, Organization for Economic Cooperation and Development; Global Economic Prospects, various issues, , various issues,
World Bank. World Bank.
The OECD Forecast
The Organization for Economic Cooperation and Development (OECD) on June 10, 2020, 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% 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 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 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.” 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 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 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 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. 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 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 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 containment measures are successful in curtailing infections, and another that assumes there is a
second wave of rapid contagion.second wave of rapid contagion.3940 Under both scenarios, the OECD estimates that the global Under both scenarios, the OECD estimates that the global
economic recovery will be slow and gradual.economic recovery will be slow and gradual.4041 The OECD also estimates that the average The OECD also estimates that the average
unemployment rate among OECD countries is projected to rise to 9.2% under a single wave 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. Through the first quarter of 2020, however, scenario and 10.0% under the second wave scenario. Through the first quarter of 2020, however,
most OECD countries had not experienced significant increases in rates of unemployment, in part most OECD countries had not experienced significant increases in rates of unemployment, in part
due to national income and wage maintenance programs, as indicated in due to national income and wage maintenance programs, as indicated in Figure 2. The main . The main

3940 OECD Economic Outlook, Organization for Economic Cooperation and Development. June 10, 2020; p. 12. , Organization for Economic Cooperation and Development. June 10, 2020; p. 12.
http://www.oecd.org/economic-outlook/#resources. http://www.oecd.org/economic-outlook/#resources.
4041 Ibid., p. 23. Ibid., p. 23.
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exceptions were the United States and Canada, where unemployment rates spiked starting at the exceptions were the United States and Canada, where unemployment rates spiked starting at the
end of the first quarter and into the second quarter of 2020. In a major difference between U.S. end of the first quarter and into the second quarter of 2020. In a major difference between U.S.
and EU data, in the EU, workers absent from work due to temporary lay-off are counted as and EU data, in the EU, workers absent from work due to temporary lay-off are counted as
employed, whereas, in the United States, they are counted as unemployed. employed, whereas, in the United States, they are counted as unemployed.
Figure 2. Unemployment Rates Among Major OECD Countries
In percent In percent

Source: OECD Quarterly Employment Situation, 1st Quarter 2020, Organization for Economic Cooperation and , Organization for Economic Cooperation and
Development, July 16, 2020. Created by CRS. Development, July 16, 2020. Created by CRS.
Global trade is projected to contract by 9.5% or 11.4% in 2020 under the single or second wave Global trade is projected to contract by 9.5% or 11.4% in 2020 under the single or second wave
scenarios, respectively. The OECD projections iscenarios, respectively. The OECD projections in Table 5 reflect the single wave scenario.reflect the single wave scenario.4142
According to this scenario, global economic growth is projected to fall by 6.0% in 2020, but rise 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 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 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 inuntil 2022, as indicated in Figure 3.
The OECD forecast also indicates that economic growth among developed economies will be 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 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 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 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 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% 2021. The UK is projected to experience a contraction in GDP growth in 2020 of 11.5%, or 14%
under the second wave scenario, the largest estimated annual decline in economic growth of any under the second wave scenario, the largest estimated annual decline in economic growth of any
OECD country in 2020. OECD country in 2020.

4142 Ibid., p. 13. Ibid., p. 13.
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Figure 3. Major Economic Forecasts

Sources: OECD Economic Outlook, Organization for Economic Cooperation and Development. June 10, 2020; , Organization for Economic Cooperation and Development. June 10, 2020;
World Economic Outlook Update, International Monetary Fund, June 24, 2020; International Monetary Fund, June 24, 2020; Global Economic Prospects, World , World
Bank Group, June 2020, Created by CRS. 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 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 The first scenario assumes there is a single wave of infections from COVID-19, while the second scenario
estimates the effect of a two-wave scenario. estimates the effect of a two-wave scenario.
Table 5. OECD, IMF and World Bank Economic Forecasts
Percentage change in Real GDP Growth Percentage change in Real GDP Growth
World
OECD June
IMF June
Bank June
2020
2020
2020

Projections

Projections

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

World World
2.7% 2.7%
-6.0% -6.0%
5.2% World 5.2% World
2.9% 2.9%
–4.9 –4.9
5.4 World 5.4 World
2.4% -5.2% 2.4% -5.2%
4.2% 4.2%
Adv. Adv.
Adv. Adv.

Adv. Adv.
Economies Economies
1.7 1.7
-7.5 -7.5
4.8 Economies 4.8 Economies
1.7 1.7
–8.0 –8.0
4.8 Economies 4.8 Economies
1.6 1.6
-7.0 -7.0
3.9 3.9
United United

United United
Australia Australia
1.8 1.8
-5.0 -5.0
4.1 States 4.1 States
2.3 2.3
–8.0 –8.0
4.5 States 4.5 States
2.3 2.3
-6.1 -6.1
4.0 4.0
Canada Canada
1.7 1.7
-8.0 -8.0
3.9 Euro Area 3.9 Euro Area
1.2 1.2
–10.2 –10.2
6.0 Euro Area 6.0 Euro Area
1.2 1.2
-9.1 -9.1
4.5 4.5
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World
OECD June
IMF June
Bank June
2020
2020
2020

Projections

Projections

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

Euro area Euro area
1.3 1.3
-9.1 -9.1
6.5 Germany 6.5 Germany
0.6 0.6
–7.8 –7.8
5.4 Japan 5.4 Japan
0.7 0.7
-6.1 -6.1
2.5 2.5
Germany Germany
0.6 0.6
-6.6 -6.6
5.8 France 5.8 France
1.3 1.3
–12.5 –12.5
7.3 Emerging 7.3 Emerging
3.5 3.5
-2.5 -2.5
4.6 4.6
France France
1.5 1.5
-11.4 -11.4
7.4 Italy 7.4 Italy
0.3 0.3
–12.8 –12.8
6.3 E. Asia 6.3 E. Asia
5.9 5.9
0.5 0.5
6.6 6.6
Italy Italy
0.3 0.3
-11.3 -11.3
7.7 Spain 7.7 Spain
2.0 2.0
–12.8 –12.8
6.3 China 6.3 China
6.1 6.1
1.0 1.0
6.9 6.9
Japan Japan
0.7 0.7
-6.0 -6.0
2.1 Japan 2.1 Japan
0.7 0.7
–5.8 –5.8
2.4 Indonesia 2.4 Indonesia
5.0 5.0
0.0 0.0
4.8 4.8
United United

Korea Korea
2.0 2.0
-1.2 -1.2
3.1 Kingdom 3.1 Kingdom
1.4 1.4
–10.2 –10.2
6.3 Thailand 6.3 Thailand
2.4 2.4
-5.0 -5.0
4.1 4.1
Mexico Mexico
-0.1 -0.1
-7.5 -7.5
3.0 Canada 3.0 Canada
1.6 1.6
–8.4 –8.4
4.9 Cen. Asia 4.9 Cen. Asia
2.2 2.2
-4.7 -4.7
3.6 3.6
Turkey Turkey
0.9 0.9
-4.8 -4.8
4.3 China 4.3 China
6.1 6.1
1.0 1.0
8.2 Russia 8.2 Russia
1.3 1.3
-6.0 -6.0
2.7 2.7
United United

Kingdom Kingdom
1.4 1.4
-11.5 -11.5
9.0 India 9.0 India
4.2 4.2
–4.5 –4.5
6.0 Turkey 6.0 Turkey
0.9 0.9
-3.8 -3.8
5.0 5.0
United United

States States
2.3 2.3
-7.3 -7.3
4.1 Russia 4.1 Russia
1.3 1.3
–6.6 –6.6
4.1 Poland 4.1 Poland
4.1 4.1
-4.2 -4.2
2.8 2.8
Latin Latin

Argentina Argentina
-2.2 -2.2
-8.3 -8.3
4.1 America 4.1 America
0.1 0.1
–9.4 –9.4
3.7 Brazil 3.7 Brazil
1.1 1.1
-8.0 -8.0
2.2 2.2
Brazil Brazil
1.1 1.1
-7.4 -7.4
4.2 Brazil 4.2 Brazil
1.1 1.1
–9.1 –9.1
3.6 Mexico 3.6 Mexico
-0.3 -0.3
-7.5 -7.5
3.0 3.0
China China
6.1 6.1
-2.6 -2.6
6.8 Mexico 6.8 Mexico
–0.1 –0.1
–10.5 –10.5
3.3 Argentina 3.3 Argentina
-2.2 -2.2
-7.3 -7.3
2.1 2.1
India India
4.2 4.2
-3.7 -3.7
7.9 Mid. East 7.9 Mid. East
1.2 1.2
–4.7 –4.7
3.3 Mid. East 3.3 Mid. East
-0.2 -0.2
-4.2 -4.2
2.3 2.3
Saudi Saudi

Saudi Saudi
Indonesia Indonesia
5.0 5.0
-2.8 -2.8
5.2 Arabia 5.2 Arabia
0.3 0.3
–6.8 –6.8
3.1 Arabia 3.1 Arabia
0.3 0.3
-3.8 -3.8
2.5 2.5
S. Africa S. Africa
0.2 0.2
-7.5 -7.5
2.5 Africa 2.5 Africa
3.1 3.1
–3.2 –3.2
3.4 Iran 3.4 Iran
-8.2 -8.2
-5.3 -5.3
2.1 2.1
Nigeria Nigeria
2.2 2.2
–5.4 –5.4
2.6 Egypt 2.6 Egypt
5.6 5.6
3.0 3.0
2.1 2.1

S. Africa S. Africa
0.2 0.2
–8.0 –8.0
3.5 S. Asia 3.5 S. Asia
4.7 4.7
-2.7 -2.7
2.8 2.8

World World
Trade Trade

Volume Volume
0.9 0.9
–11.9 –11.9
8.0 India 8.0 India
4.2 4.2
-3.2 -3.2
3.1 3.1

Oil prices Oil prices

($) ($)
–10.2 –10.2
–41.1 –41.1
3.8 Pakistan 3.8 Pakistan
1.9 1.9
-2.6 -2.6
-0.2 -0.2

Bangladesh Bangladesh
8.2 8.2
1.6 1.6
1.0 1.0

Africa Africa
2.2 2.2
-2.8 -2.8
3.1 3.1

Nigeria Nigeria
2.2 2.2
-3.2 -3.2
1.7 1.7

S. Africa S. Africa
0.2 0.2
-7.1 -7.1
2.9 2.9

Angola Angola
-0.9 -0.9
-4.0 -4.0
3.1 3.1
Sources: OECD Economic Outlook, Organization for Economic Cooperation and Development. June 10, 2020; p. , Organization for Economic Cooperation and Development. June 10, 2020; p.
12.; 12.; World Economic Outlook Update, International Monetary Fund, June 24, 2020, p. ix; International Monetary Fund, June 24, 2020, p. ix; Global Economic Prospects, ,
World Bank Group, June 2020, p. 4. World Bank Group, June 2020, p. 4.
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Note: The OECD forecast includes a single-wave scenario and a double-wave scenario in which the pandemic 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 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. forecast numbers is this table reflect the single-wave scenario.
Among developing and emerging economies, the economic downturn is projected to most 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 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, addition to lower prices for commodity exports and reduced global demand for exports,
developing countries are projected to be negatively affected by reduced remittances, weaker developing countries are projected to be negatively affected by reduced remittances, weaker
currencies and tighter financial conditions. currencies and tighter financial conditions.
The OECD also concluded that The OECD also concluded that
 Real per capita income in 2020 is projected to decline by 8% and 9.5%,  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 respectively, depending on a one- or two-wave contagion, with substantial
declines in all economies. Even with an economic recovery in 2021, real per declines in all economies. Even with an economic recovery in 2021, real per
capita income is projected to rise to only that of 2013. 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,  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%, 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 respectively under a single or second-wave scenario and fall by only one
percentage point through 2021. The OECD concludes that, “scarring effects from 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 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 workers, with attendant risks of many people becoming trapped in joblessness for
an extended period.” an extended period.”
 Net productive investment (business and government) was weak prior to the  Net productive investment (business and government) was weak prior to the
pandemic, falling behind the average rate of investment during the previous 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, 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-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. wave scenarios and increasing the risk of entrenched weak economic growth.
Investment is also expected to be negatively affected by bankruptcies and Investment is also expected to be negatively affected by bankruptcies and
insolvencies among corporations and financial institutions.insolvencies among corporations and financial institutions.4243
The OECD estimated in its March 2020 forecast that increased direct and indirect economic costs The OECD estimated in its March 2020 forecast that increased direct and indirect economic costs
through global supply chains, reduced demand for goods and services, and declines in tourism through global supply chains, reduced demand for goods and services, and declines in tourism
and business travel mean that, “the adverse consequences of these developments for other and business travel mean that, “the adverse consequences of these developments for other
countries (non-OECD) are significant.”countries (non-OECD) are significant.”4344 Global trade, measured by trade volumes, slowed in the 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 last quarter of 2019 and 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 economic activity associated with the pandemic, which is negatively affecting economic activity
in various sectors, including airlines, hospitality, ports, and the shipping industry.in various sectors, including airlines, hospitality, ports, and the shipping industry.4445
According to the OECD’s forecast According to the OECD’s forecast
 The greatest impact of the containment restrictions will be on retail and  The greatest impact of the containment restrictions will be on retail 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.

4243 Ibid., p. 31. Ibid., p. 31.
4344 OECD Interim Economic Assessment: COVID-19: The World Economy at Risk, Organization for Economic , Organization for Economic
Cooperation and Development. March 2, 2020, p. 2. Cooperation and Development. March 2, 2020, p. 2.
4445 Ibid., p. 4. Ibid., p. 4.
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 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 will vary across countries reflecting differences in the  Economic effects likely will vary across countries reflecting differences in the
timing and degree of containment measures. timing and degree of containment measures.4546
In addition, the OECD argued that China’s emergence as a global economic actor marked a In addition, the OECD argued that China’s emergence as a global economic actor marked 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
globalization and the interconnected nature of economies through capital flows, supply chains, globalization 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.4647 China’s global economic role and China’s global economic role and
globalization mean that trade has played a role in spreading the economic effects of COVID-19. globalization mean that trade has played a role in spreading the economic effects of COVID-19.
More broadly, the economic effects of the pandemic were spread through three trade channels: (1) More broadly, the economic effects of the pandemic were spread through three trade channels: (1)
directly through supply chains as reduced economic activity spread from intermediate goods directly through supply chains as reduced economic activity spread from intermediate goods
producers to finished goods producers; (2) as a result of a drop overall in economic activity, producers to finished goods producers; (2) as a result of a drop overall in economic activity,
which reduced demand for goods in general, including imports; and (3) through reduced trade which reduced demand for goods in general, including imports; and (3) through reduced trade
with commodity exporters that supplied producers, which, in turn, reduced their imports and with commodity exporters that supplied producers, which, in turn, reduced their imports and
negatively affected trade and economic activity of exporters. negatively affected trade and economic activity of exporters.
The IMF Forecast
Labeling the projected decline in global economic activity as the “Great Lockdown,” the IMF Labeling the projected decline in global economic activity as the “Great Lockdown,” the IMF
released an updated forecast on June 24, 2020. The IMF concluded that the global economy released an updated forecast on June 24, 2020. The IMF concluded that the global economy
would experience its “worst recession since the Great Depression, surpassing that seen during the would experience its “worst recession since the Great Depression, surpassing that seen during the
global financial crisis a decade ago.”global financial crisis a decade ago.”4748 In addition, the IMF estimated in its baseline projection In addition, the IMF estimated in its baseline projection
that the global economy could decline by 4.9% in 2020, down from its April projection of a that the global economy could decline by 4.9% in 2020, down from its April projection of a
negative 3.0%, before growing by 5.4% in 2021; global trade was projected to fall in 2020 by negative 3.0%, before growing by 5.4% in 2021; global trade was projected to fall in 2020 by
11.9% and oil prices were projected to fall by 41%, also shown in11.9% and oil prices were projected to fall by 41%, also shown in Table 5.4849 In contrast, the In contrast, the
OECD’s single-wave scenario projects a global economic contraction of 7.6% in 2020 and a 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 growth rate of 2.8% in 2021, delaying a return to full recovery until 2022
The forecast reflects a larger impact on the U.S. economy in the first half of 2020 than had been The forecast reflects a larger impact on the U.S. economy in the first half of 2020 than had been
assumed in the IMF’s April forecast and a slower recovery in the second half of 2020. Also, the assumed in the IMF’s April forecast and a slower recovery in the second half of 2020. Also, the
IMF forecast reflects an estimated larger decline in consumption than previously assumed as IMF forecast reflects an estimated larger decline in consumption than previously assumed as
consumers curtail spending to increase their savings and the effects on economic activity of social consumers curtail spending to increase their savings and the effects on economic activity of social
distancing. The IMF also stated that many countries were facing a multi-layered crisis that distancing. 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, 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 and a collapse in commodity prices. In combination, these various effects were interacting in
ways that made forecasting difficult. As a result, the IMF indicated that the forecast depends on a ways that made forecasting difficult. As a result, the IMF indicated that the forecast depends on a
number of factors, including number of factors, including
 The length of the pandemic and required lockdowns.  The length of the pandemic and required lockdowns.

4546 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.
4647 Goldin, Ian, “COVID-19 Shows How Globalization Spreads Contagion of All Kinds,” Goldin, Ian, “COVID-19 Shows How Globalization Spreads 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.
4748 World Economic Outlook Update, International Monetary Fund, June 24, 2020. , International Monetary Fund, June 24, 2020.
4849 The IMF database indicates that global GDP fell by 0.075% in 2009 during the height of the global financial crisis. The IMF database indicates that global GDP fell by 0.075% in 2009 during the height of the global financial crisis.
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 Voluntary social distancing, which affects consumer spending.  Voluntary social distancing, which affects consumer spending.
 The ability of displaced workers to secure employment, possibly in different  The ability of displaced workers to secure employment, possibly in different
sectors. sectors.
 The long-term impact of firm closures and unemployed workers leaving the  The long-term impact of firm closures and unemployed workers leaving the
workforce, compounding the ability of the economy to recover. workforce, compounding the ability of the economy to recover.
 The impact of changes to strengthen workplace safety—such as staggered work  The impact of changes to strengthen workplace safety—such as staggered work
shifts, enhanced hygiene and cleaning between shifts, new workplace practices shifts, enhanced hygiene and cleaning between shifts, new workplace practices
relating to proximity of personnel on production lines—which incur business relating to proximity of personnel on production lines—which incur business
costs. costs.
 Global supply chain reconfigurations that affect productivity as companies try to  Global supply chain reconfigurations that affect productivity as companies try to
enhance their resilience to supply disruptions. enhance their resilience to supply disruptions.
 The extent of cross-border spillovers from weaker external demand as well as  The extent of cross-border spillovers from weaker external demand as well as
funding shortfalls. funding shortfalls.
 A resolution of the current disconnect between rising asset values, as reflected in  A resolution of the current disconnect between rising asset values, as reflected in
market indices, and forecasts of a synchronized downturn in global economic market indices, and forecasts of a synchronized downturn in global economic
activity. activity.
Advanced economies as a group were forecast to experience an economic contraction in 2020 of Advanced economies as a group were forecast to experience an economic contraction in 2020 of
8.0% of GDP, with the U.S. economy also projected by the IMF to decline by 8.0%, about four 8.0% of GDP, with the U.S. economy also projected by the IMF to decline by 8.0%, about four
times the rate of decline experienced in 2009 during the financial crisis, as indicated itimes the rate of decline experienced in 2009 during the financial crisis, as indicated in Figure 4.
The rate of economic growth in the Euro area was projected to decline by 10.2% of GDP. Most The rate of economic growth in the Euro area was projected to decline by 10.2% of GDP. Most
developing and emerging economies were projected to experience a decline in the rate of developing and emerging economies were projected to experience a decline in the rate of
economic growth of 3.0%, reflecting tightening global financial conditions and falling global economic growth of 3.0%, reflecting tightening global financial conditions and falling global
trade and commodity prices. In contrast, China, and Indonesia were projected to experience trade and commodity prices. In contrast, China, and Indonesia were projected to experience
small, but positive rates of economic growth in 2020, while India’s rate of growth was projected small, but positive rates of economic growth in 2020, while India’s rate of growth was projected
to decline by 4.5%. The IMF also argued that recovery of the global economy could be weaker to decline by 4.5%. 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, 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.and permanent closure of businesses and shifts in the behavior of firms and households.4950

4950 World Economic Outlook, p. 9. , p. 9.
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Figure 4. IMF Forecast, Gross Domestic Product, Percentage Change

Source: World Economic Outlook Update, International Monetary Fund, June 24, 2020. Created by CRS. , International Monetary Fund, June 24, 2020. Created by CRS.
As a result of the various challenges, the IMF qualified its forecast by arguing that 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 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 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. 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 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 developing economies are even more severely hit, tight financial conditions persist, or if
widespread scarring effects emerge due to firm closures and extended unemployment.widespread scarring effects emerge due to firm closures and extended unemployment.5051
The World Bank Forecast
On June 8, the World Bank released its forecast for global economic growth that estimated the 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 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 global economic recession would affect 90% of the world’s economies, a percentage that is
greater than what was experienced during the Great Depression.greater than what was experienced during the Great Depression.5152 The World Bank’s baseline The World Bank’s baseline
estimate indicates that global economic growth could decline by 5.2% in 2020 and only partially 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 recover in 2021 with a 4.2% rate of growth, assuming that the global economy can begin
recovering in the second half of 2020.recovering in the second half of 2020.5253 In contrast, the IMF forecasted a 4.9% rate of decline in In contrast, the IMF forecasted a 4.9% rate of decline in
2020 and a recovery of growth to 5.4% in 2021. Similar to the OECD and the IMF forecasts, the 2020 and a recovery of growth to 5.4% in 2021. Similar to the OECD and the IMF forecasts, the
World Bank argues that the economic impact of the global recession will fall most heavily on 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 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 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 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 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 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 forecasts that economic growth in advanced economies will decline by 7.0% in 2020 and recover

5051 Ibid., p. v. Ibid., p. v.
5152 Global Economic Prospects, World Bank Group, June 8, 2020, p. 15. , World Bank Group, June 8, 2020, p. 15.
5253 Ibid., p. 5. Ibid., p. 5.
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to 3.8% in 2021. The United States, the Euro area and Japan are all estimated to experience a 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. 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 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 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 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 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.”as widespread poverty, and the degree to which debt levels constrain the fiscal response.”5354
According to the Bank’s baseline scenario, the projected economic recovery is expected to be 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 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 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 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 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 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 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 economic activity in 2020 of 4%, based on the assumption that economic activity rebounds
quickly in the third quarter of 2020.quickly in the third quarter of 2020.5455
The Bank also concludes that global value chains (GVCs) have been important conduits through 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 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 national borders. The economic effects of the pandemic have been spread through trade linkages
but also amplified through quarantines, production shutdowns and border closures.but also amplified through quarantines, production shutdowns and border closures.5556 Estimates by Estimates by
the World Bank indicate that national policies adopted to blunt the spread of the virus affect the 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 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 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 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, shocks varies by country depending on various factors, including the composition of output,
reliance on trade, and the level of GVC integration. reliance on trade, and the level of GVC integration.
Global Trade
According to a June 23 forecast update, the World Trade Organization (WTO) estimated that According to a June 23 forecast update, the World Trade Organization (WTO) estimated that
global trade volumes could fall by 18.5% in 2020 and then recover in 2021.global trade volumes could fall by 18.5% in 2020 and then recover in 2021.5657 This forecast This forecast
reflects a downward revision from the WTO’s April 8, 2020, more optimistic forecast that global reflects a downward revision from the WTO’s April 8, 2020, more optimistic forecast that global
trade volumes could decline between 13% and 32% in 2020 as a result of the economic impact of trade volumes could decline between 13% and 32% in 2020 as a result of the economic impact of
COVID-19, as indicated iCOVID-19, as indicated in Table 6. The WTO also reported in its June 29 report on G-20 trade The WTO also reported in its June 29 report on G-20 trade
measures that during the mid-October 2019 to mid-May 2020 period, countries had made measures that during the mid-October 2019 to mid-May 2020 period, countries had made
“significant” progress in facilitating imports, including products related to COVID-19.“significant” progress in facilitating imports, including products related to COVID-19.5758
According to the report, various governments initially responded to the pandemic by introducing According to the report, various governments initially responded to the pandemic by introducing
new trade restrictive measures, 90% of which were export bans on medical products, such as new trade restrictive measures, 90% of which were export bans on medical products, such as
surgical masks, gloves, medicine and disinfectant. Since then, the WTO indicated that G20 surgical masks, gloves, medicine and disinfectant. Since then, the WTO indicated that G20
economies have repealed 36% of the restrictions and lowered barriers to imports of many economies have repealed 36% of the restrictions and lowered barriers to imports of many

5354 Ibid., p. 115. Ibid., p. 115.
5455 Ibid., p. 33. Ibid., p. 33.
5556 Ibid., p. 118. Ibid., p. 118.
5657 Trade Falls Steeply in First Half of 2020, World Trade Organization, June 23, 2020. , World Trade Organization, June 23, 2020.
5758 WTO Report on G20 Shows Moves to Facilitate Imports Even as Trade Restrictions Remain Widespread, WTO Report on G20 Shows Moves to Facilitate Imports Even as Trade Restrictions Remain Widespread, World
Trade Organization, June 29, 2020. https://www.wto.org/english/news_e/news20_e/trdev_29jun20_e.htm. June 29, 2020. https://www.wto.org/english/news_e/news20_e/trdev_29jun20_e.htm.
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pandemic-related products. As of mid-May 2020, the WTO reported that 65 of the 93 pandemic- pandemic-related products. As of mid-May 2020, the WTO reported that 65 of the 93 pandemic-
related trade measures implemented during the monitoring period were of a trade-facilitating related trade measures implemented during the monitoring period were of a trade-facilitating
measures, rather than trade-restricting measures.measures, rather than trade-restricting measures.5859
Concerning the WTO’s updated forecast, WTO Director-General Azevêdo indicated that, “The Concerning the WTO’s updated forecast, WTO Director-General Azevêdo indicated that, “The
fall in trade we are now seeing is historically large—in fact, it would be the steepest on record. fall in trade we are now seeing is historically large—in fact, it would be the steepest on record.
But there is an important silver lining here: it could have been much worse.”But there is an important silver lining here: it could have been much worse.”5960 Data in Data in Table 6
will be updated when they are published by the WTO. The WTO argues that the wide range in the will be updated when they are published by the WTO. 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. According to the WTO, the more optimistic scenario assumes that trade volumes the pandemic. According to the WTO, the more optimistic scenario assumes that trade volumes
recover quickly in the second half of 2020 to their pre-pandemic trend, or that the global recover quickly in the second half of 2020 to their pre-pandemic trend, or that the global
economy experiences a V-shaped recovery. In comparison, the more pessimistic scenario assumes economy experiences a V-shaped recovery. In comparison, the more pessimistic scenario assumes
there is a partial recovery in global trade that lasts into 2021, or that global economic activity there is a partial recovery in global trade that lasts into 2021, or that global economic activity
experiences a U-shaped recovery. The updated forecast reflects the WTO’s estimate that global experiences a U-shaped recovery. The updated forecast reflects the WTO’s estimate that global
trade volumes in 2020 will not fall by as much as it had projected under its pessimistic scenario. trade volumes in 2020 will not fall by as much as it had projected under its pessimistic scenario.
The WTO concludes, however, that the impact on global trade volumes could exceed the drop in The WTO concludes, however, that the impact on global trade volumes could exceed the drop in
global trade during the height of the 2008-2009 financial crisis.global trade during the height of the 2008-2009 financial crisis.6061
Table 6. WTO April 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

5859 Report on G20 Trade Measures (Mid-October 2019 to Mid-May 2020), World Trade Organization, June 29, 2020. World Trade Organization, June 29, 2020.
5960 Trade Falls Steeply in First Half of 2020, p, 1. , p, 1.
6061 Trade Set to Plunge as COVID-19 Pandemic Upends Global Economy, World Trade Organization, April 8, 2020. , World Trade Organization, April 8, 2020.
https://www.wto.org/english/news_e/pres20_e/pr855_e.htm. https://www.wto.org/english/news_e/pres20_e/pr855_e.htm.
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Optimistic
Pessimistic
Historical
scenario
scenario

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

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, , World Trade Organization, April 8,
2020. 2020.
Note: Data for 2020 and 2021 are projections; GDP projections are based on scenarios simulated with the Data for 2020 and 2021 are projections; GDP projections are based on scenarios simulated with the
WTO Global Trade Model. WTO Global Trade Model.
The estimates indicate that all geographic regions will experience a double-digit drop in trade The estimates indicate that all geographic regions will 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 in export volumes. The forecast also projects that sectors with extensive value chains, declines in 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
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 about the costs and benefits of the global supply chains The pandemic is also raising questions about 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 the 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 crisis. In some cases, businesses are reassessing their exposure to the risks posed by extensive
supply chains that potentially are vulnerable to numerous points of disruption. Also, some supply chains that potentially 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 important to national security as a result of firms shifting production offshore. For be important to national security as a result of firms shifting production offshore. For
multinational businesses, changing suppliers and shifting production locations can be especially multinational businesses, changing suppliers and shifting production locations can be especially
costly for some firms and can introduce additional risks.costly for some firms and can introduce additional risks.6162 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
Analysis (BEA) reports that 10% of the global sales of the majority-owned foreign affiliates of Analysis (BEA) 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 U.S. 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 take 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.6263
Economic Policy Challenges
The challenge for policymakers has been one of implementing targeted policies that address what The challenge 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

6162 Beattie, Alan, Will Coronavirus Pandemic Finally Kill Off Global Supply Chains?, Beattie, Alan, Will Coronavirus Pandemic Finally Kill Off Global Supply 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.
6263 Activities of U.S. Multinational Enterprises: U.S. Parent Companies and Their Foreign Affiliates, Preliminary 2017
Statistics, Bureau of Economic Analysis, August 23, 2019, Table II.E.2. https://www.bea.gov/news/2019/activities-us-, Bureau of Economic Analysis, August 23, 2019, Table II.E.2. https://www.bea.gov/news/2019/activities-us-
multinational-enterprises-2017. multinational-enterprises-2017.
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quickly changing nature of the global health crisis that quickly changing nature of the global health crisis that ~~appears to be turning~~has turned into a global trade 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
ability to respond to the crisis as a result of limited flexibility for monetary and fiscal support ability to respond to the crisis as a result of limited flexibility 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, especially in manufacturing and trade, that had developed prior to the viral outbreak. The growth, especially in manufacturing and trade, that had developed prior to the viral outbreak. The
pandemic is also affecting global politics as world leaders have cancelled international pandemic is also affecting global politics as world leaders have cancelled international
meetings,meetings,6364 nations are competing for medical supplies, and some nations reportedly are stoking nations are competing for medical supplies, and some nations reportedly are stoking
conspiracy theories that shift blame to other countries.conspiracy theories that shift blame to other countries.6465
Initially, the economic effects of the virus were expected to be short-term supply issues as factory 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 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 interaction. The drop in economic activity, initially 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 have grown, however, that virus-related supply shocks are creating more prolonged and Concerns have grown, however, that virus-related supply shocks are creating 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 potentially escalating and binding credit and liquidity constraints. While profits and potentially escalating and binding credit and liquidity constraints. While
manufacturing firms experience supply chain shocks, reduced consumer activity through social manufacturing firms experience supply chain shocks, reduced consumer activity through social
distancing affects the services sector of the economy, which accounts for two-thirds of annual distancing affects the services sector of the economy, which accounts for two-thirds of annual
U.S. economic output. In this environment, manufacturing and services firms initially tended to U.S. economic output. In this environment, manufacturing and services firms initially tended to
hoard cash, which affected market liquidity. In response, central banks lowered interest rates hoard cash, which affected market liquidity. In response, central banks lowered interest rates
where possible and expanded lending facilities to provide liquidity to financial markets and to where possible and expanded lending facilities to provide liquidity to financial markets and to
firms potentially facing insolvency. firms potentially 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 potentially increase liquidity constraints firms and households. These growing economic effects potentially increase liquidity constraints
and credit market tightening in global financial markets as firms hoard cash, with negative fallout and credit market tightening in global financial markets as firms hoard cash, with negative 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.6566
Liquidity and credit market issues present policymakers with a different set of challenges than Liquidity and credit market issues present policymakers with a different set of challenges than
addressing supply-side constraints. As a result, the focus of government policy expanded from a addressing supply-side constraints. As a result, the focus of government policy expanded from a
health crisis to macroeconomic and financial market issues that are addressed through a health crisis to macroeconomic and financial market issues that are addressed through a
combination of monetary, fiscal, and other policies, including border closures, quarantines, and combination of monetary, fiscal, and other policies, including border closures, quarantines, and

6364 Taylor, Adam, Teo Armus, and Rick Noak, “Live updates: COVID-19 Turmoil Widens as U.S. Death Toll Mounts; Taylor, Adam, Teo Armus, and Rick Noak, “Live updates: COVID-19 Turmoil Widens as U.S. Death Toll Mounts;
Xi Cancels Japan Trip, Xi Cancels Japan Trip, Washington Post, March 5, 2020, https://www.washingtonpost.com/world/2020/03/05/COVID-, March 5, 2020, https://www.washingtonpost.com/world/2020/03/05/COVID-
19-live-updates/. 19-live-updates/.
6465 Shih, Gerry, “China Is Subtly Stoking COVID-19 Conspiracy Theories That Blame the U.S. for Outbreak,” 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/. , March 5, 2020. https://www.washingtonpost.com/world/2020/03/05/COVID-19-live-updates/.
6566 Foroohar, Rana, “How COVID-19 Became a Corporate Credit Run,” Foroohar, Rana, “How COVID-19 Became a Corporate Credit Run,” Financial Times, March 15, 2020. , March 15, 2020.
https://www.ft.com/content/f1ea5096-6531-11ea-a6cd-df28cc3c6a68. https://www.ft.com/content/f1ea5096-6531-11ea-a6cd-df28cc3c6a68.
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restrictions on social interactions. Essentially, while businesses have attempted to address worker restrictions on social interactions. Essentially, while businesses have attempted to address worker
and output issues at the firm level, national leaders attempted to implement fiscal policies to and output issues at the firm level, national leaders attempted to implement fiscal policies to
prevent economic growth from contracting sharply by assisting workers and businesses that face prevent economic growth from contracting sharply by assisting workers and businesses that face
financial strains, and central bankers adjusted monetary policies to address mounting credit financial strains, and central bankers adjusted monetary policies to address mounting credit
market issues. market issues.
In the initial stages of the health crisis, households did not experience the same kind of wealth In the initial 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
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 availability of defaults could negatively affect the market for mortgage-backed securities, the availability of
funds for mortgages, and negatively affect the overall rate of economic growth. Losses in the funds for mortgages, and negatively affect the overall 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,
especially that of retirees living on a fixed income and others who own equities. Investors that especially that of retirees living on a fixed income and others who own equities. Investors that
trade in mortgage-backed securities reportedly reduced their holdings while the Federal Reserve trade in mortgage-backed securities reportedly reduced their holdings while the Federal Reserve
attempted to support the market.attempted to support the market.6667 In the current environment, even traditional policy tools, such In the current environment, even traditional policy tools, such
as monetary accommodation, apparently have not always been processed by markets in a as monetary accommodation, apparently have not always been processed by markets in a
traditional manner, with equity market indices displaying heightened, rather than lower, levels of 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 adding to 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 economy. uncertainties about what governments can do to address weaknesses in the global economy.
Major Economic Developments
Between late February and mid-July 2020, financial markets from the United States to Asia and Between late February and mid-July 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.6768 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 yield to below 1% on March 3, 2020.experienced a historic drop in yield to below 1% on March 3, 2020.6869 In response to concerns that In response to concerns that
the global economy was in a freefall, the Federal Reserve lowered key interest rates on March 3, the global economy was in a freefall, 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 billion available International Monetary Fund (IMF) announced that it was making about $50 billion 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).6970

6667 Armstrong, Robert, “Mortgage Investment Funds Become ‘Epicenter’ of Crisis,” Armstrong, Robert, “Mortgage Investment Funds Become ‘Epicenter’ of Crisis,” Financial Times, March 24, 2020. , March 24, 2020.
https://www.ft.com/content/18909cda-6d40-11ea-89df-41bea055720b. https://www.ft.com/content/18909cda-6d40-11ea-89df-41bea055720b.
6768 Samson, Adam and Hudson Lockett, “Stocks Fall Again in Worst Week Since 2008 Crisis,” Samson, Adam and Hudson Lockett, “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.
6869 The price and yield of a bond are inversely related; increased demand for Treasury securities raises their price, which The price and yield of a bond are inversely related; increased demand for Treasury securities raises their price, which
lowers their yield. Levisohn, Ben, “The 10-Year Treasury Yield Fell Below 1% for the First Time Ever. What That lowers their yield. Levisohn, Ben, “The 10-Year Treasury Yield Fell Below 1% for the First Time Ever. What 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-what-that-means-51583267310. first-time-ever-what-that-means-51583267310.
6970 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-what-we-can-do/. epidemic-what-we-know-and-what-we-can-do/.
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Financial Markets
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 5. .
Expectations that the U.S. Congress would adopt a $2.0 trillion spending package moved the Expectations that the U.S. Congress would adopt a $2.0 trillion 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 by 18%, paring its initial losses by half. Since then, the DJIA has trended upward, but higher by 18%, paring its initial losses by half. Since then, the DJIA has trended upward, but
moved erratically at times as investors have weighed news about the human cost and economic moved erratically at times as investors have weighed news about the human cost and economic
impact of the pandemic and the prospects of various medical treatments. Between March 23 and impact of the pandemic and the prospects of various medical treatments. Between March 23 and
July 1, the DJIA regained 70% of the index valued lost during the February to March decline. As July 1, the DJIA regained 70% of the index valued lost during the February to March decline. As
indicated iindicated in Table 7, the DJIA lost the largest part of its market valuation in trading during the DJIA lost the largest part of its market valuation in trading during
February and March when the index lost nearly one-fourth of its value as more trading sessions February and March when the index lost nearly one-fourth of its value as more trading sessions
ended with overall market values lower than higher. Since March, the index has posted more ended with overall market values lower than higher. Since March, the index has posted more
trading sessions that closed with positive gains than with losses. For some policymakers, the drop trading sessions that closed with positive gains than with losses. For some policymakers, the drop
in equity prices raised concerns that foreign investors might attempt to exploit the situation by in equity prices 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 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 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 better screen foreign investments, especially in areas such as health, medical research, and critical
infrastructure.infrastructure.7071
Table 7. Dow Jones Industrial Average Market Changes by Month
Sessions up Sessions down
Open
Close
Change in index valuation

January January
13 13
8 8
28,638.97 28,638.97
28,256.03 28,256.03
-382.94 -382.94
-1.34% -1.34%
February February
8 8
11 11
28,319.65 28,319.65
25,409.36 25,409.36
-2,910.29 -2,910.29
-10.28% -10.28%
March March
10 10
12 12
25,590.51 25,590.51
21,917.16 21,917.16
-3,673.35 -3,673.35
-14.35% -14.35%
April April
12 12
9 9
21,227.38 21,227.38
24,345.72 24,345.72
3,118.34 3,118.34
14.69% 14.69%
May May
10 10
10 10
24,120.78 24,120.78
25,383.11 25,383.11
1,262.33 1,262.33
5.23% 5.23%
June June
14 14
8 8
25,342.99 25,342.99
25,812.88 25,812.88
469.89 469.89
1.85% 1.85%
Source: Financial Times, calculations by CRS. , calculations by CRS.
Similar to the 2008-2009 global financial crisis, central banks have implemented a series of 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 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 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 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. 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 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 banks that had engaged in risky assets. In the current environment, central banks are attempting to
address financial market volatility and prevent large-scale corporate insolvencies that reflect the address financial market volatility and prevent large-scale corporate insolvencies that reflect the
underlying economic uncertainty caused by the pandemic. underlying economic uncertainty caused by the pandemic.

7071 Chazan, Guy and Jim Brunsden, “COVID-19 Crisis Pushes Europe into Nationalist Economic Turn,” 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., March 26, 2020. https://www.ft.com/content/79c0ae80-6df1-11ea-89df-41bea055720b.
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Figure 5. Dow Jones Industrial Average ~~Index~~
February 14, 2020, to July February 14, 2020, to July 2330, 2020 , 2020

Source: Financial Times. Created by CRS. Financial Times. Created by CRS.
International Role of the Dollar
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 6, 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. Between mid-May and mid-June, the dollar lost about 3% of its value relative to the the year. Between mid-May and mid-June, the dollar lost about 3% of its value relative to the
currencies of other major trading partners and was equal to its value in mid-March. Since mid-currencies of other major trading partners and was equal to its value in mid-March. Since mid-
June, the dollarJune, the dollar ~~has~~ regained about 1.5% of its value against the currencies of major trading regained about 1.5% of its value against the currencies of major trading
partners and is about where it was in mid-March. partners and is about where it was in mid-March.
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Figure 6. U.S. Dollar Trade-Weighted Broad Index, Goods and Services
January 2, 2020, through July January 2, 2020, through July 1724, 2020 , 2020

Source: St. Louis Federal Reserve Bank. Created by CRS. St. Louis Federal Reserve Bank. Created by CRS.
Notes: January 2006 = 100. January 2006 = 100.
The Bank for International Settlements (BIS) emphasized the role of the dollar as a dominant The Bank for International Settlements (BIS) emphasized the role of the dollar as a dominant
global currency in its recent triennial survey of currency markets.global currency in its recent triennial survey of currency markets.7172 According to the survey, the According to the survey, 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, as indicated iinternational trade, as indicated in Figure 7. It also accounts for two-thirds of central bank 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 foreign exchange holdings, half of non-U.S. banks foreign currency deposits, and two-thirds of
non-U.S. corporate borrowings from banks and the corporate bond market.non-U.S. corporate borrowings from banks and the corporate bond market.7273 In comparison, the In comparison, the
United States accounts for about one-fourth of global GDP and about one-fifth of global trade United States accounts for about one-fourth of global GDP and about one-fifth of global trade
(exports plus imports). (exports plus imports).
As a result of the role of the dollar as the dominant global reserve currency, disruptions in the 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 smooth functioning of the global dollar market can have wide-ranging repercussions on
international trade and financial transactions. A June 2020 report by BIS stresses the central role international trade and financial transactions. A June 2020 report by BIS stresses the central role
of the dollar in the global economy. The report concludes that dollar funding activities are highly 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 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 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.easily be transmitted across different financial markets and across regions.7374
In addition, the dominant role of the dollar in international trade pricing and trade financing In addition, the dominant role of the dollar in international trade pricing and trade financing
means the dollar plays a key role in the global economic recovery and that it could amplify the means the dollar plays a key role in the global economic recovery and that it could amplify the
impact of the pandemic, according to the IMF.impact of the pandemic, according to the IMF.7475 Traditionally, most economic models were based Traditionally, most economic models were based
on the assumption that countries set their prices in their home currencies. As a result, on the assumption that countries set their prices in their home currencies. As a result,

7172 Foreign Exchange Turnover in April 2019, Bank for International Settlements, September 16, 2019. , Bank for International Settlements, September 16, 2019.
https://www.bis.org/statistics/rpfx19_fx.htm. https://www.bis.org/statistics/rpfx19_fx.htm.
7273 See CRS In Focus IF10112, See CRS In Focus IF10112, Introduction to Financial Services: The International Foreign Exchange Market. .
7374 Bank for International Settlements, Bank for International Settlements, U.S, Dollar Funding: An International Perspective, CGFS Papers, No. 65, June , CGFS Papers, No. 65, June
2020, p. 52. https://www.bis.org/publ/cgfs65.htm. 2020, p. 52. https://www.bis.org/publ/cgfs65.htm.
7475 Dominant Currencies and External Adjustment, IMF Staff Discussion Note 20/05, International Monetary Fund, July , IMF Staff Discussion Note 20/05, International Monetary Fund, July
2020. 2020.
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domestically produced goods and services would become cheaper for trading partners when the domestically produced goods and services would become cheaper for trading partners when the
domestic currency weakens, leading to increased demand from trading partners and more exports. domestic currency weakens, leading to increased demand from trading partners and more exports.
However, much international trade, including many commodities, is priced in dollars, which However, much international trade, including many commodities, is priced in dollars, which
means that trade volumes respond less than they would if goods were priced in exporters’ home means that trade volumes respond less than they would if goods were priced in exporters’ home
currencies. Limited evidence indicates that a significant share of bilateral trade between countries currencies. Limited evidence indicates that a significant share of bilateral trade between countries
other than the United States is invoiced in U.S. dollars.other than the United States is invoiced in U.S. dollars.7576 As a result, an appreciation of the dollar As a result, an appreciation of the dollar
against other currencies, or a weakening in other currencies, has a muted effect on exports by against other currencies, or a weakening in other currencies, has a muted effect on exports by
other countries, at least in the short run, as has been evidenced by recent movements in exchange other countries, at least in the short run, as has been evidenced by recent movements in exchange
rates and trade volumes of emerging market and developing economies. The IMF also concludes rates and trade volumes of emerging market and developing economies. The IMF also concludes
that because countries other than the United States price much of their trade in dollars, an that because countries other than the United States price much of their trade in dollars, an
appreciation in the value of the dollar, or a depreciation in the value of other currencies relative to appreciation in the value of the dollar, or a depreciation in the value of other currencies relative to
the dollar, reduces both exports and imports. As a result, a depreciation in other currencies the dollar, reduces both exports and imports. As a result, a depreciation in other currencies
relative to the dollar provides less of a boost to exports and, therefore, less of a countercyclical relative to the dollar provides less of a boost to exports and, therefore, less of a countercyclical
support to economies. support to economies.
The international role of the dollar also increases pressure on the Federal Reserve essentially to The international role of the dollar also increases pressure on the Federal Reserve essentially 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 liquidity to central banks and central banks, and creating new financial facilities to provide liquidity to central banks and
monetary authorities.monetary authorities.7677 Typically, banks lend long-term and borrow short-term and can only Typically, 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 illiquid in a panic, meaning it cannot borrow in own currency. Consequently, a bank can become illiquid in a panic, meaning it cannot borrow in
private markets to meet short-term cash flow needs. Swap lines are designed to allow foreign private markets to meet short-term cash flow needs. Swap lines are designed to allow 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 7. International Role of the Dollar

Source: U.S. Dollar Funding: An International Perspective, CGFS Papers No. 65, Bank for International Settlements, , CGFS Papers No. 65, Bank for International Settlements,
June 2020. Created by CRS. June 2020. Created by CRS.

7576 Ibid, p. 8. Ibid, p. 8.
7677 Politi, James, Brendan Greeley, and Colby Smith, “Fed Sets Up Scheme to Meet Booming Foreign Demand for Politi, James, Brendan Greeley, and Colby Smith, “Fed Sets Up Scheme to Meet Booming Foreign Demand for
Dollars,” Dollars,” Financial 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.
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Notes: (1) Data refer to 2019. (2) Data refer to 2019. (3) US dol ar-denominated cross-border loans by banks (1) Data refer to 2019. (2) Data refer to 2019. (3) US dol ar-denominated cross-border loans by banks
to counterparties in all countries; data refer to Q4 2019 (excluding interoffice claims but including interbank to counterparties in all countries; data refer to Q4 2019 (excluding interoffice claims but including interbank
claims on account of loans and deposits); loans comprise nonnegotiable debt instruments that are loaned by claims on account of loans and deposits); loans comprise nonnegotiable debt instruments that are loaned by
creditors directly to a debtor or represented by evidence of a deposit. (4) US dol ar denominated international creditors directly to a debtor or represented by evidence of a deposit. (4) US dol ar denominated international
debt securities by all issuers; data refer to Q4 2019; these securities are issued outside the local market of the debt securities by all issuers; data refer to Q4 2019; these securities are issued outside the local market of the
country where the borrower resides, and capture issues conventionally known as eurobonds and foreign bonds country where the borrower resides, and capture issues conventionally known as eurobonds and foreign bonds
and exclude negotiable loans; instruments such as bonds, medium-term notes and money market instruments are and exclude negotiable loans; instruments such as bonds, medium-term notes and money market instruments are
included. (5) Data refer to 2019. (6) Data refer to Q4 2019. (7) As estimated in Gopinath (2015). (8) Data refer included. (5) Data refer to 2019. (6) Data refer to Q4 2019. (7) As estimated in Gopinath (2015). (8) Data refer
to February 2020. Sources: Gopinath (2015); Federal Reserve; IMF; CPB World Trade Monitor; Bloomberg; to February 2020. Sources: Gopinath (2015); Federal Reserve; IMF; CPB World Trade Monitor; Bloomberg;
SWIFT; BIS Triennial Central Bank Survey of Foreign Exchange and Over-the-counter (OTC) Derivatives SWIFT; BIS Triennial Central Bank Survey of Foreign Exchange and Over-the-counter (OTC) Derivatives
Markets; BIS locational banking statistics (LBS). Markets; BIS locational banking statistics (LBS).
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.7778 On March 5, the U.S. Congress passed an On March 5, the U.S. Congress passed an
$8 billion spending bill to provide assistance for health care, sick leave, small business loans, and $8 billion 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 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 sell equities and buy sovereign bonds. In overnight trading in various sessions investors to sell 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 fall by lower), triggering automatic circuit breakers designed to halt trading if the indexes rise or 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.7879 By early April, the By early April, the
global mining industry had reduced production by an estimated 20% in response to falling global mining industry had reduced production by an estimated 20% in response to falling
demand and labor quarantines and as a strategy for raising prices.demand and labor quarantines and as a strategy for raising prices.7980
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.8081 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 fell sharply, government bond yields fell to like Treasury securities) after stock market indexes fell sharply, government bond yields fell to
record lows (reflecting increased demand), and demand for corporate bonds fell. Together these record lows (reflecting increased demand), and demand for corporate bonds fell. 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.8182

7778 Smith, Colby, Richard Henderson, Philip Georgiadis, and Hudson Lockett, “Stocks Tumble and Government Bonds Smith, Colby, Richard Henderson, Philip Georgiadis, and Hudson Lockett, “Stocks Tumble and Government Bonds
Hit Highs on Virus Fears,” Hit Highs on Virus Fears,” Financial 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.
7879 Georgiadis, Philip, Adam Samson, and Hudson Lockett, “Stocks Plummet as Oil Crash Shakes Financial Markets,” Georgiadis, Philip, Adam Samson, and Hudson Lockett, “Stocks Plummet as Oil Crash Shakes Financial Markets,”
Financial 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.
7980 Hume, Neil, “Mine Closures Bolster Metals Prices as Demand Collapses,” Hume, Neil, “Mine Closures 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.
8081 Chazan, Guy, David Keohane, and Martin Arnold, “Europe’s Policymakers Search for Answers to Virus Crisis,” Chazan, Guy, David Keohane, and Martin Arnold, “Europe’s Policymakers Search for Answers to Virus Crisis,”
Financial 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.
8182 Smith, Colby and Brendan Greeley, “Fed Pumps Extra Liquidity Into Overnight Lending Markets,” Smith, Colby and Brendan Greeley, “Fed Pumps Extra Liquidity Into Overnight Lending Markets,” Financial Times, ,
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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 call to EU leaders European Central Bank (ECB) President Christine Lagarde in a conference call 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.8283 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 small and medium businesses. The UK UK banks, and provided a funding program for small and medium businesses. The UK
Chancellor of the Exchequer also proposed a budget that would appropriate £30 billion (about Chancellor of the Exchequer also proposed a budget that would appropriate £30 billion (about
$35 billion) for fiscal stimulus spending, including funds for sick pay for workers, guarantees for $35 billion) for fiscal stimulus spending, including funds for sick pay for workers, guarantees for
loans to small businesses, and cuts in business taxes. The European Commission announced a €25 loans to small businesses, and cuts in business taxes. The European Commission announced a €25
billion (about $28 billion) investment fund to assist EU countries and the Federal Reserve billion (about $28 billion) 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 liquidity to financial markets. funding to provide added liquidity 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.8384 At its March 12 At its March 12
meeting, the ECB announced €27 billion (about $30 billion) in stimulus funding, combining meeting, the ECB announced €27 billion (about $30 billion) in stimulus funding, combining
measures to expand low-cost loans to Eurozone banks and small and medium-sized businesses measures to expand low-cost loans to Eurozone banks and small 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.8485 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 fell, reflecting sales by investors who build up their cash reserves. The price of bank shares fell, 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.8586 Despite the Despite the
various actions, the DJIA fell by nearly 10% on March 12, recording the worst one-day drop since various actions, the DJIA fell by nearly 10% on March 12, recording the worst one-day drop since
1987. Between February 14 and March 12, the DJIA fell by more than 8,000 points, or 28% of its 1987. Between February 14 and March 12, the DJIA fell 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.8687

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.
8283 O’Brien, Fergal, “ECB’s Lagarde Warns of 2008-Style Crisis Unless Europe Acts,” O’Brien, Fergal, “ECB’s Lagarde Warns of 2008-Style Crisis 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-without-urgent-2020. https://www.bloomberg.com/news/articles/2020-03-11/ecb-s-lagarde-warns-of-2008-style-crisis-without-urgent-
action. action.
8384 McAuley, James and Michael Birnbaum, “Europe Blindsided by Trump’s Travel Restrictions, with Many Seeing McAuley, James and Michael Birnbaum, “Europe Blindsided by Trump’s Travel 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.
8485 Arnold, Martin, “ECB Enters Damage-Limitation Mode with Pledge of More Action,” Arnold, Martin, “ECB Enters Damage-Limitation Mode with Pledge 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.
8586 Morris, Stephen, Laura Noonan, Henny Sender, and Olaf Storbeck, “Banks Scramble as Companies Rush to Tap Morris, Stephen, Laura Noonan, Henny Sender, and Olaf Storbeck, “Banks Scramble as Companies Rush to Tap
Back-up Credit Lines,” Back-up Credit Lines,” Financial 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.
8687 Edgecliffe-Johnson, Andrew, Peggy Hollinger, Joe Rennison, and Robert Smith, “Will the COVID-19 Trigger a Edgecliffe-Johnson, Andrew, Peggy Hollinger, Joe Rennison, and Robert Smith, “Will the COVID-19 Trigger a
Corporate Debt Crisis?” Corporate Debt Crisis?” Financial 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 issues include automotive, insurance, capital goods, utilities, oil fe4680ea68b5. Sectors most exposed to debt financing issues include automotive, insurance, capital goods, utilities, oil
and gas, technology, aerospace and defense, real estate, telecoms, consumer products, metals, mining and steel, and gas, 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.
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On March 13, President Trump declared a national emergency, potentially releasing $50 billion in On March 13, President Trump declared a national emergency, potentially releasing $50 billion 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%.8788 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 trillion spending package to provide paid sick leave, unemployment insurance, food stamps, a $2 trillion spending package to provide paid sick leave, unemployment insurance, food stamps,
support for small businesses, and other measures.support for small businesses, and other measures.8889 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, potentially easing borrowing costs for firms and cut its reserve requirements for Chinese banks, potentially easing borrowing costs for firms and
adding $79 billion in funds to stimulate the Chinese economy; Norway’s central bank reduced its adding $79 billion in funds to stimulate the Chinese economy; Norway’s central bank reduced its
key interest rate; the Bank of Japan acquired billions of dollars of government securities (thereby key interest rate; the Bank of Japan acquired billions of dollars of government securities (thereby
increasing liquidity); and the Reserve Bank of Australia injected nearly $6 billion into its increasing liquidity); and the Reserve Bank of Australia injected nearly $6 billion into its
financial system.financial system.8990 The Bank of Canada also lowered its overnight bank lending rate. The Bank of Canada also lowered its overnight bank lending rate.
The Federal Reserve lowered its key interest rate to near zero on March 15, 2020, arguing that the 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, 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.”9091 It also It also
announced an additional $700 billion in asset purchases, including Treasury securities and announced an additional $700 billion 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.9192
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 selling short-term debt, rose on commercial paper market, where corporations raise cash by selling 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 call on the Fed to intervene.to call on the Fed to intervene.9293 The DJIA dropped nearly 3,000 points, or about 13%. Most The DJIA dropped nearly 3,000 points, or about 13%. Most
automobile manufacturers announced major declines in sales and production;automobile manufacturers announced major declines in sales and production;9394 similarly, most similarly, most
airlines reported they faced major cutbacks in flights and employee layoffs due to diminished airlines reported they faced major cutbacks in flights and employee layoffs due to diminished
economic activity.economic activity.9495 Economic data from China indicated the economy would slow markedly in Economic data from China indicated the economy would slow markedly in
the first quarter of 2020, potentially greater than that experienced during the global financial the first quarter of 2020, potentially greater than that experienced during the global financial

8788 Fritz, Angela and Meryl Kornfield, “President Trump Declares a National Emergency, Freeing $50 Billion in Fritz, Angela and Meryl Kornfield, “President Trump 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.
8889 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/.
8990 Georgiadis, Philip, Hudson Lockett, and Leo Lewis, “European Stocks and US Futures Soar After Historic Rout,” Georgiadis, Philip, Hudson Lockett, and Leo Lewis, “European Stocks and US Futures Soar After Historic Rout,”
Financial 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.
9091 Federal Reserve Releases FOMC Statement, Board of Governors of the Federal Reserve System, March 15, 2020. , Board of Governors of the Federal Reserve System, March 15, 2020.
https://www.federalreserve.gov/newsevents/pressreleases/monetary20200315a.htm. https://www.federalreserve.gov/newsevents/pressreleases/monetary20200315a.htm.
9192 Greeley, Brendan, Colby Smith, Adam Samson, Joe Rennison, Katie Martin, and Jennifer Ablan, “Fed Cuts Rates to Greeley, Brendan, Colby Smith, Adam Samson, Joe Rennison, Katie Martin, and Jennifer Ablan, “Fed Cuts Rates to
Zero as Part of Sweeping Crisis Measures,” Zero as Part of Sweeping Crisis Measures,” Financial 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.
9293 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 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.
9394 Campbell, Peter, Joe Miller, and David Keohane, “European Car Plants Close as Industry Crisis Deepens,” Campbell, Peter, Joe Miller, and David Keohane, “European Car Plants Close as Industry Crisis Deepens,” Financial
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.
9495 Smyth, Jamie Smyth, Andrew Edgecliffe-Johnson, Peggy Hollinger, Myles McCormick, David Keohane, and Smyth, Jamie Smyth, Andrew Edgecliffe-Johnson, Peggy Hollinger, Myles McCormick, David Keohane, and
Richard Milne, “Most Airlines Face Bankruptcy by End of May, Industry Body Warns,” Richard Milne, “Most Airlines Face Bankruptcy by End of May, Industry Body Warns,” Financial 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.
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crisis. crisis.9596 The Bank of Japan announced that it would double its purchases of exchange traded The Bank of Japan announced that it would double its purchases of exchange traded
funds and the G-7 funds and the G-7 ~~countries96~~countries97 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 trillion lending capacity to help its membership.” that the IMF “stands ready to mobilize its $1 trillion lending capacity to help its membership.”
The World Bank also promised an additional $14 billion to assist governments and companies The World Bank also promised an additional $14 billion to assist governments and companies
address the pandemic.address the pandemic.9798
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 allow the 24 primary dealers in Treasury securities to financial crisis. It announced that it would allow 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.9899 The UK government proposed government-backed loans to support business; a three- The UK government proposed government-backed loans to support business; a three-
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, nonstandard asset In an emergency session on March 18, the ECB announced a temporary, nonstandard 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 billion (over $820 billion) in public and private sector bonds to counter the risks posed by €750 billion (over $820 billion) 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 billion in securities).the pandemic crisis (as of May 5, the ECB had purchased about $180 billion in securities).99100 The The
ECB also broadened the types of assets it would accept as collateral to include nonfinancial ECB also broadened the types of assets it would accept as collateral to include nonfinancial
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.~~100~~101 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.~~101~~102 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 potentially amplifying market buy-backs, denying equity markets a major source of support and potentially amplifying market
volatility.volatility.~~102~~103 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 selling sovereign and other bonds as firms and other financial By March 19, 2020, investors were selling 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

9596 Weinland, Don and Xinning Liu, “Chinese Economy Suffers Record Blow from COVID-19,” Weinland, Don and Xinning Liu, “Chinese Economy Suffers Record Blow 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.
9697 The G-7 is comprised of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States. The G-7 is comprised of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States.
9798 Wheatley, Jonathan, “Surging Dollar, Coronavirus and Oil Slump Hit Emerging Economies,” Wheatley, Jonathan, “Surging Dollar, Coronavirus and Oil Slump 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.
9899 Politi, James, Brendan Greeley, Colby Smith, and Joe Rennison, “Fed to Lend Against Stocks and Bonds in Bid to Politi, James, Brendan Greeley, Colby Smith, and Joe Rennison, “Fed to Lend Against Stocks and Bonds in Bid to
Stabilize Markets,” Stabilize Markets,” Financial 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-
da70cff6e4d3. da70cff6e4d3.
99100 “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.
~~100~~101 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.
~~101~~102 Campbell, Peter and Claire Bushey, “Ford, General Motors and Fiat Chrysler Agree Widespread Shutdown,” Campbell, Peter and Claire Bushey, “Ford, General Motors and Fiat Chrysler Agree Widespread Shutdown,”
Financial 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.
~~102~~103 Henderson, Richard, “Bank-Led Freeze on Stock Buybacks Could Spread Across US Market,” Henderson, Richard, “Bank-Led Freeze on Stock Buybacks Could Spread Across US 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.
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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 fell at the in which stock market values declined while bond prices rose, stock and bond values fell at the
same time in March 2020 as investors reportedly adopted a “sell everything” mentality to build same time in March 2020 as investors reportedly adopted a “sell everything” mentality to build
up cash reserves.up cash reserves.~~103~~104 Senate Republicans introduced the Coronavirus Aid, Relief, and Economic Senate Republicans introduced the Coronavirus Aid, Relief, and Economic
Security Act to provide $2 trillion in spending to support the U.S. economy. Security Act to provide $2 trillion in spending to support the U.S. economy.
By the close of trading on March 20, the DJIA index had fallen by 17% from March 13. At the By the close of trading on March 20, the DJIA index had fallen 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 8. 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.~~104~~105 The ECB’s Largarde The ECB’s Largarde
justified actions by the Bank during the week to provide liquidity by arguing that the justified actions by the Bank during the week to provide liquidity by arguing that the
“coronavirus pandemic is a public health emergency unprecedented in recent history.” Market “coronavirus pandemic is a public health emergency unprecedented in recent history.” Market
indexes fell again on March 23 as the Senate debated the parameters of a new spending bill to indexes fell again on March 23 as the Senate debated the parameters of a new spending bill to
support the economy. Oil prices also continued to fall as oil producers appeared to be in a support the economy. Oil prices also continued to fall as oil producers appeared to be in a
standoff over cuts to production. standoff over cuts to production.
Figure 8. Brent Crude Oil Price per Barrel in Dollars
January 9, 2020, to July January 9, 2020, to July 2229, 2020 , 2020

Source: Markets Insider. Created by CRS. Markets Insider. Created by CRS.
Financial market indexes continued to fall on March 23, 2020, reaching their lowest point since Financial market indexes continued to fall on March 23, 2020, reaching their lowest point since
the start of the pandemic crisis. The Federal Reserve announced a number of new facilities to 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 additional provide an unlimited expansion in bond buying programs. The measures included additional
purchases of Treasury and mortgage-backed securities; additional funding for employers, purchases of Treasury and mortgage-backed securities; additional funding for employers,
consumers, and businesses; establishing the Primary Market Corporate Credit Facility (PMCCF) consumers, and businesses; establishing the Primary Market Corporate Credit Facility (PMCCF)
to support issuing new bonds and loans and the Secondary Market Corporate Credit Facility to support issuing new bonds and loans and the Secondary Market Corporate Credit Facility
(SMCCF) to provide liquidity for outstanding corporate bonds; establishing the Term Asset-(SMCCF) to provide liquidity for outstanding corporate bonds; establishing the Term Asset-

~~103~~104 Stubbington, Tommy and Colby Smith, “Investment Veterans Try to Get to Grips With ‘Broken’ Markets,” Stubbington, Tommy and Colby Smith, “Investment Veterans Try to Get to Grips With ‘Broken’ Markets,”
Financial 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.
~~104~~105 Parker, George Parker, Chris Giles, and Sebastian Payne, “Sunak Turns on Financial Firepower to Help Workers,” Parker, George Parker, Chris Giles, and Sebastian Payne, “Sunak Turns on Financial Firepower to Help Workers,”
Financial 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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Backed Securities Loan Facility (TALF), to support credit to consumers and businesses; 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.~~105~~106 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.~~106~~107
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.~~107~~108 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 trillion economic stimulus package. passage in Congress of a $2.2 trillion economic stimulus package.
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 trillion into the global economy and to do “whatever it takes to overcome the agreed to inject $5 trillion 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 called on the ECB to consider issuing countries, including France, Italy, and Spain called 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.~~108~~109 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.~~109~~110
Japan announced that it would adopt an emergency spending package worth $238 billion, or Japan announced that it would adopt an emergency spending package worth $238 billion, or
equivalent to 10% of the country’s annual GDP.equivalent to 10% of the country’s annual GDP.~~110~~111 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.~~111~~112
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.~~112~~113 In commodity markets, In commodity markets,
Brent crude oil prices continued to fall, reaching a low of $22.76. Strong global demand for Brent crude oil prices continued to fall, reaching a low of $22.76. Strong global demand for

~~105~~106 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.
~~106~~107 Gurria, Angel, Gurria, 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.
~~107~~108 Arnold, Martin Arnold and Valentina Romei, “Business Activity Crashes to Record Low in Eurozone,” Arnold, Martin Arnold 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. , March 24, 2020. https://www.ft.com/content/f5ebabd4-6dad-11ea-89df-41bea055720b.
~~108~~109 Dombrey, Daniel, Guy Chazan, and Jim Brunsden, “Nine Eurozone Countries Issue Call for ‘Coronabonds,’” Dombrey, Daniel, Guy Chazan, and Jim Brunsden, “Nine Eurozone Countries Issue Call for ‘Coronabonds,’”
Financial 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.
~~109~~110 Arnold, Martin and Tommy Stubbington, “ECB Shakes Off Limits on New €750bn Bond-Buying Plan,” Arnold, Martin and Tommy Stubbington, “ECB Shakes Off Limits on New €750bn Bond-Buying Plan,” Financial
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.
~~110~~111 Kajimoto, Tetsushi, Izumi Nakagawa, “Japan Plans Huge Stimulus Package to Cushion Blow from Coronavirus,” Kajimoto, Tetsushi, Izumi Nakagawa, “Japan Plans Huge Stimulus Package to Cushion Blow 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.
~~111~~112 Georgiadis, Philip, Hudson Lockett, and Leo Lewis, “Global Stocks Falter After Two Days of Big Gains,” Georgiadis, Philip, Hudson Lockett, and Leo Lewis, “Global Stocks Falter After Two Days of Big Gains,” Financial
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.
~~112~~113 Wheatley, Jonathan, “Emerging Market Central Banks Embark on Radical Stimulus Policies,” Wheatley, Jonathan, “Emerging Market Central Banks Embark on Radical Stimulus 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.
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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 allow Federal Reserve introduced a new temporary facility that would work with its swap lines to 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.~~113~~114 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 million as firms faced a collapse in demand and requirements for employees to self-over 17 million 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 April in response to the accumulated monetary and fiscal policy recover somewhat in early April in response to the accumulated monetary and fiscal policy
initiatives, but remained volatile as a result of uncertainty over efforts to reach an output initiatives, 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 small The Federal Reserve announced on April 8 that it was establishing a facility to fund 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 billion to declare areas around Tokyo to be in a state of emergency and that it would adopt a $989 billion
funding package.funding package.~~114~~115
On April 9, OPEC and Russia agreed to cut oil production by 10 million barrels per day. On April 9, OPEC and Russia agreed to cut oil production by 10 million barrels per day.~~115~~116 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.~~116~~117 They also announced They also announced
an agreement to freeze government loan payments until the end of the year to help low-income an agreement to freeze government loan payments until the end of the year to help low-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.~~117~~118 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.~~118~~119 Eurozone finance ministers announced a Eurozone finance ministers announced a
€500 billion (about $550 billion) emergency spending package to support governments, €500 billion (about $550 billion) emergency spending package to support governments,
businesses, and workers. Reportedly, the measure will provide funds to the European Stability businesses, and workers. Reportedly, the measure will provide funds to the European Stability
Mechanism, the European Investment Bank, and for unemployment insurance.Mechanism, the European Investment Bank, and for unemployment insurance.~~119~~120
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 billion, in response to requests from more than 100 countries for assistance.$100 billion, in response to requests from more than 100 countries for assistance.~~120~~121 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

~~113~~114 Politi, James, Brendan Greeley, and Colby Smith, “Fed Sets Up Scheme to Meet Booming Foreign Demand for Politi, James, Brendan Greeley, and Colby Smith, “Fed Sets Up Scheme to Meet Booming Foreign Demand for
Dollars,” Dollars,” Financial 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.
~~114~~115 Takeo, Yuko and Yoshiaki Nohara, “Japan’s Virus Stimulus Package to Come in Two Phases,” Takeo, Yuko and Yoshiaki Nohara, “Japan’s Virus Stimulus Package to Come in Two 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.
~~115~~116 Sheppard, David, Anjli Raval, Derek Brower, and Henry Foy, “G20 Ministers Meet to Endorse OPEC-Russia Deal Sheppard, David, Anjli Raval, Derek Brower, and Henry Foy, “G20 Ministers Meet to Endorse OPEC-Russia Deal
to Slash Oil Production,” to Slash Oil Production,” Financial 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.
~~116~~117 Sheppard, David, Anjli Raval, Derek Brower. and Henry Foy, G20 Backs Largest Oil Supply Agreement in History, Sheppard, David, Anjli Raval, Derek Brower. and Henry Foy, G20 Backs Largest Oil Supply Agreement in History,
Financial 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.
~~117~~118 England, Andrew, Jonathan Wheatley and James Politi, G20 Agrees Debt Relief for Low Income Nations, England, Andrew, Jonathan Wheatley and James Politi, G20 Agrees Debt Relief for Low Income Nations, Financial
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.
~~118~~119 Politi, James and Jonathan Wheatley, G7 Countries Back Debt Relief For Poorest Nations, Politi, James and Jonathan Wheatley, G7 Countries Back Debt Relief 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.
~~119~~120 Fleming, Sam and Mehreen Khan, “Eurozone Countries Strike Emergency Deal on Coronavirus Rescue,” Fleming, Sam and Mehreen Khan, “Eurozone Countries Strike Emergency Deal on Coronavirus Rescue,” Financial
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.
~~120~~121 Politi, James, “IMF Boosts Emergency Lending Capacity to $100bn,” Politi, James, “IMF Boosts Emergency Lending 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.
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typical method of issuing securities to fight the effects of COVID-19. typical method of issuing securities to fight the effects of COVID-19.~~121~~122 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 posed a significant threat to the maintenance of international peace and security that the pandemic posed 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.~~122~~123
Federal Reserve Chairman Jerome Powell, stating that the U.S. economy was deteriorating “with Federal Reserve Chairman Jerome Powell, stating that the U.S. economy was deteriorating “with
alarming speed,” announced on April 10 that the Fed would provide an additional $2.3 trillion in alarming speed,” announced on April 10 that the Fed would provide an additional $2.3 trillion 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.~~123~~124 On April 16, On April 16,
the U.S. Labor Department reported that 5.2 million Americans filed for unemployment insurance the U.S. Labor Department reported that 5.2 million Americans filed for unemployment insurance
during the previous week, raising the total claims since mid-March to over 22 million.during the previous week, raising the total claims since mid-March to over 22 million.~~124~~125
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.~~125~~126
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.~~126~~127 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) fell to $18 per barrel, the lowest it had been since 2002, reportedly reflecting Intermediate (WTI) fell 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.~~127~~128 Leaders of emerging economies in Latin America Leaders of emerging economies in Latin America
and Africa argued that the G-20 call for suspension of interest payments fell short of what is and Africa argued that the G-20 call for suspension of interest payments fell short of what is
needed. National leaders from Columbia, Brazil, Mexico, and Chile encouraged the World Bank, needed. National leaders from Columbia, Brazil, Mexico, and Chile encouraged the World Bank,
the InterAmerican Development Bank, and the IMF to double their net lending to Latin America, the 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.”~~128~~129
The price of oil fell to its lowest level in two decades on April 19, reportedly reflecting a The price of oil fell 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.~~129~~130 Some Eurozone members Some Eurozone members

~~121~~122 Giles, Chris and Philip Georgiadis, “Bank of England to Directly Finance UK Government’s Extra Spending,” Giles, Chris and Philip Georgiadis, “Bank of England to Directly Finance UK Government’s Extra Spending,”
Financial 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.
~~122~~123 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.
~~123~~124 Rennison, Joe, Robin Wigglesworth, and Colby Smith, “Federal Reserve Enters New Territory with Support for Rennison, Joe, Robin Wigglesworth, and Colby Smith, “Federal Reserve Enters New Territory with Support for
Risky Debt,” Risky Debt,” Financial 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, “Fed Chair Powell Says U.S. Economy Deteriorating ‘With Alarming Speed,’” Heather Long, “Fed Chair Powell Says U.S. 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/.
~~124~~125 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.
~~125~~126 Hale, Thomas, Xinning Liu, and Yuan Yang, China’s Economy Shrinks for First Time in Four Decades, Hale, Thomas, Xinning Liu, and Yuan Yang, China’s Economy Shrinks for First Time in Four Decades, Financial
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.
~~126~~127 Smith, Colby, Myles McCormick, Tommy Stubbington, and Hudson Lockett, US Stocks Extend Rally With Central Smith, Colby, Myles McCormick, Tommy Stubbington, and Hudson Lockett, US Stocks Extend Rally With Central
Bank Safety Net, Bank Safety Net, Financial 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.
~~127~~128 Sheppard, David, US Crude Tumbles to 18-year Low as Supply Overwhelms Demand, Sheppard, David, US Crude Tumbles to 18-year Low as Supply 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.
~~128~~129 Wheatley, Jonathan, Michael Stott, and David Pilling, Emerging Economies Call for More Financial Help After G20 Wheatley, Jonathan, Michael Stott, and David Pilling, Emerging Economies Call for More Financial Help After G20
Deal, Deal, Financial 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.
~~129~~130 Lockett, Hudson Lockett and David Sheppard, US Oil Price Plunges to 20-year Low as Coronavirus Hits Demand, Lockett, Hudson Lockett and David Sheppard, US Oil Price Plunges to 20-year Low as Coronavirus Hits Demand,
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reportedly argued for the ECB to create a Eurozone “bad bank” to remove billions of euros in reportedly argued for the ECB to create a Eurozone “bad bank” to remove billions of euros in
nonperforming debts from banks’ balance sheets to provide more capacity for Eurozone banks at nonperforming debts from banks’ balance sheets to provide more capacity for Eurozone banks at
a potentially critical time when banks could see an increase in nonperforming loans.a potentially critical time when banks could see an increase in nonperforming loans.~~130~~131 The World The World
Bank confirmed that its “pandemic bonds” would pay out $133 billion to the poorest countries Bank confirmed that its “pandemic bonds” would pay out $133 billion to the poorest countries
affected by the pandemic.affected by the pandemic.~~131~~132
On April 21, Agricultural Ministers of the G-20 countries released a joint statement that supported On April 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, especially the most vulnerable security and nutrition of large proportions of the world population, especially the most vulnerable
living in environments of low food security.”living in environments of low food security.”~~132~~133
On April 23, the House passed H.R. 266 (P.L. 116-139), the Paycheck Protection Program and On April 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 will provide $484 billion for small business loans, health care providers, and COVID-19 measure will provide $484 billion for small business loans, health care providers, and COVID-19
testing. The U.S. Labor Department reported that 4.4 million Americans filed for unemployment testing. The U.S. Labor Department reported that 4.4 million Americans filed for unemployment
insurance in the previous week, raising the total that have applied to over 26 million.insurance in the previous week, raising the total that have applied to over 26 million.~~133~~134 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.~~134~~135 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.~~135~~136 The Saudi Presidency of the G-20 called on The Saudi Presidency of the G-20 called 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.~~136~~137
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 will weigh economy.” The policy statement concluded that, “The ongoing public health crisis will 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

Financial 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.
~~130~~131 Arnold, Martin and Javier Espinoza, ECB Pushes for Eurozone Bad Bank to Clean up Soured Loans, Arnold, Martin and Javier Espinoza, ECB Pushes for Eurozone Bad Bank to Clean up Soured Loans, Financial
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.
~~131~~132 Gross, Anna, World Bank Pandemic Bonds to Pay $133m to Poorest Virus-hit Nations, Gross, Anna, World Bank Pandemic Bonds 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.
~~132~~133 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/
en/media/Pages/pressroom.aspx. en/media/Pages/pressroom.aspx.
~~133~~134 Unemployment Insurance Weekly Claims, April 23, 2020. https://www.dol.gov/ui/data.pdf. , April 23, 2020. https://www.dol.gov/ui/data.pdf.
~~134~~135 Arnold, Martin and Valentina Romei, European Business Activity Crashes Under Coronavirus Lockdowns, Arnold, Martin and Valentina Romei, European Business Activity Crashes Under Coronavirus Lockdowns,
Financial 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.
~~135~~136 Giles, Chris, and Tommy Stubbington, UK Treasury to Quadruple Borrowing to £180bn Over Next Quarter, Giles, Chris, and Tommy Stubbington, UK Treasury to Quadruple Borrowing to £180bn Over Next Quarter,
Financial 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.
~~136~~137 Harding, Robin, Bank of Japan Steps up Coronavirus Stimulus With Bond-buying Pledge, Harding, Robin, Bank of Japan Steps up Coronavirus Stimulus With Bond-buying 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.
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risks to the economic outlook over the medium term.” risks to the economic outlook over the medium term.”~~137~~138 The Federal Reserve also announced a The Federal Reserve also announced a
change in its eligibility requirements for a $500 billion lending program for municipalities. The change in its eligibility requirements for a $500 billion 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%).~~138~~139
On April 30, the Department of Labor released its weekly data on applications for unemployment On April 30, the Department of Labor released its weekly data on applications for unemployment
insurance, which indicated that an additional 3.8 million people had filed for unemployment insurance, which indicated that an additional 3.8 million people had filed for unemployment
insurance during the week, raising the total number who had applied to 30 million.insurance during the week, raising the total number who had applied to 30 million.~~139~~140 The Federal The Federal
Reserve also announced an expansion in its medium-size business loan program by allowing Reserve also announced an expansion in its medium-size business loan program by allowing
firms with up to 15,000 employees or with revenues up to $5 billion to access a new $600 billion firms with up to 15,000 employees or with revenues up to $5 billion to access a new $600 billion
program. In addition, the Fed lowered the minimum loan amount for small businesses and program. In addition, the Fed lowered the minimum loan amount for small businesses and
announced a loan program to assist riskier businesses.announced a loan program to assist riskier businesses.~~140~~141 At the same time, the ECB expanded a At the same time, the ECB expanded a
record low-interest rate loan program for Eurozone banks to support economic activity, while 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 as it faces, “an 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 peacetime.”economic contraction of a magnitude and speed that are unprecedented in peacetime.”~~141~~142 The The
ECB also announced a new nontargeted low-interest rate pandemic emergency longer-term ECB also announced a new nontargeted low-interest rate pandemic emergency longer-term
refinancing operation (PELTROs) to complement its Pandemic Emergency Refinance Operations refinancing operation (PELTROs) to complement its Pandemic Emergency Refinance Operations
announced in March.announced in March.~~142~~143 House Speaker Pelosi stated that House Democrats were considering a $1 House Speaker Pelosi stated that House Democrats were considering a $1
trillion spending bill to support state and local governments.trillion spending bill to support state and local governments.~~143~~144 In a development that seemed In a development that seemed
incongruous with the broader economic situation, between April 1, 2020, and April 30, 2020, the 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 monthly increase since 1987.DJIA rose more than 3,400 points, or 16%, marking the strongest monthly increase since 1987.~~144~~145
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 fell in March; exports The U.S. Census Bureau reported on May 5 that U.S. exports and imports fell in March; exports
fell by a greater amount than imports, thereby increasing the monthly U.S. goods and services fell 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 billion, an increase of about $4.6 billion trade deficit. The trade balance for March was -$44.5 billion, an increase of about $4.6 billion

~~137~~138 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.
~~138~~139 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/.
~~139~~140 Unemployment Insurance Weekly Claims, April 30, 2020. https://www.dol.gov/ui/data.pdf. , April 30, 2020. https://www.dol.gov/ui/data.pdf.
~~140~~141 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 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.
~~141~~142 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.
~~142~~143 Arnold, Martin and Tommy Stubbington, ECB Launches Fresh Push to Lend to Banks at Ultra-low Rates, Arnold, Martin and Tommy Stubbington, ECB Launches Fresh Push to Lend to Banks at Ultra-low Rates, Financial
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.
~~143~~144 Werner, Erica, Pelosi Points to $1 Trillion Need for State and Local Governments in Next Coronavirus Bill, The Werner, Erica, Pelosi Points to $1 Trillion 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-Washington Post, April 30, 2020. https://www.washingtonpost.com/us-policy/2020/04/30/congress-coronavirus-
economy/. economy/.
~~144~~145 Henderson, Richard Henderson, Robin Wigglesworth, and Katie Martin, U.S. Stocks Close Out Best Month Since Henderson, Richard Henderson, Robin Wigglesworth, and Katie Martin, U.S. Stocks Close Out Best Month Since
1987 in Global Rebound, 1987 in Global Rebound, Financial 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.
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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 Spring economic forecast, which indicated that On May 6, the European Commission released its Spring 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 gradually, the viral effects remain contained, assuming the containment measures can be lifted gradually, 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.~~145~~146 On May 7, the Labor Department announced that On May 7, the Labor Department announced that
2.7 million Americans had filed for unemployment insurance during the week, raising the total 2.7 million Americans had filed for unemployment insurance during the week, raising the total
that had filed over the previous seven weeks to 33 million.that had filed over the previous seven weeks to 33 million.~~146~~147
On May 8, the U.S. Department of Labor announced that 20.5 million Americans had lost their On May 8, the U.S. Department of Labor announced that 20.5 million 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 had taken to support financial policy actions the Federal Reserve, the ECB, and the Bank of Japan had taken to support financial
markets would stabilize and stimulate the markets and optimism that the health crisis is ebbing.markets would stabilize and stimulate the markets and optimism that the health crisis is ebbing.~~147~~148
On May 12, House Democrats introduced H.R. 6800, the Heroes Act, to provide a $3 trillion On May 12, House Democrats introduced H.R. 6800, the Heroes Act, to provide a $3 trillion
supplemental spending bill for additional financial resources to state and local governments and supplemental spending bill 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 UK Office of National Statistics reported that UK GDP contracted consideration. On May 13, the UK 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 all major by 2.0% in the first quarter, the largest decline in the UK’s GDP since 2008 with all major
economic sector affected.economic sector affected.~~148~~149 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 2.4 million Americans had filed for unemployment insurance during the previous additional 2.4 million Americans had filed for unemployment insurance during the previous
week, increasing the total number filing for unemployment insurance over the previous eight week, increasing the total number filing for unemployment insurance over the previous eight
weeks to 36 million.weeks to 36 million.~~149~~150
On May 18, German Chancellor Angela Merkel and French President Emmanuel Macron On May 18, German Chancellor Angela Merkel and French President Emmanuel Macron
proposed a €500 billion (about $620 billion) EU recovery fund in an effort to gain a coordinated proposed a €500 billion (about $620 billion) EU recovery fund in an effort to gain a coordinated
EU fiscal response to the pandemic.EU fiscal response to the pandemic.~~150~~151
The Department of Labor announced on May 21 that an additional 2.4 million Americans had The Department of Labor announced on May 21 that an additional 2.4 million Americans had
filed for Unemployment Insurance, raising the total to 38.4 million over the previous nine filed for Unemployment Insurance, raising the total to 38.4 million over the previous nine
weeks.weeks.~~151~~152
On May 27, European Commission President Ursula von der Leyen proposed a €750 billion On May 27, European Commission President Ursula von der Leyen proposed a €750 billion
(about $825 billion) coronavirus recovery plan to provide loans and grants to the hardest hit EU (about $825 billion) 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

~~145~~146 European Economic Forecast Spring 2020, European Commission, May 2020. https://ec.europa.eu/commission/, European Commission, May 2020. https://ec.europa.eu/commission/
presscorner/detail/en/ip_20_799. presscorner/detail/en/ip_20_799.
~~146~~147 Unemployment Insurance Weekly Claims, May 5, 2020. https://www.dol.gov/ui/data.pdf. , May 5, 2020. https://www.dol.gov/ui/data.pdf.
~~147~~148 Platt, Eric, Colby Smith, Adam Samson, and Hudson Lockett, Wall Street closes higher despite dire US jobs data, Platt, Eric, Colby Smith, Adam Samson, and Hudson Lockett, Wall Street closes higher despite dire US jobs data,
Financial Times, May 8, 2020. https://www.ft.com/content/a9999ef1-1373-41b7-8d55-d780fd06825d. May 8, 2020. https://www.ft.com/content/a9999ef1-1373-41b7-8d55-d780fd06825d.
~~148~~149 GDP Monthly Estimate, UK: March 2020, Office for National Statistics, May 13, 2020. https://www.ons.gov.uk/, Office for National Statistics, May 13, 2020. https://www.ons.gov.uk/
economy/grossdomesticproductgdp/bulletins/gdpmonthlyestimateuk/march2020. economy/grossdomesticproductgdp/bulletins/gdpmonthlyestimateuk/march2020.
~~149~~150 Unemployment Insurance Weekly Claims, May 14, 2020. https://www.dol.gov/ui/data.pdf. , May 14, 2020. https://www.dol.gov/ui/data.pdf.
~~150~~151 Fleming, Sam, Victor Mallet, and Guy Chazan, Germany and France Unite in Call for €500 Billion Europe Fleming, Sam, Victor Mallet, and Guy Chazan, Germany and France Unite in Call for €500 Billion Europe
Recovery Fund, Recovery Fund, Financial 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.
~~151~~152 Unemployment Insurance Weekly Claims, May 21, 2020. https://www.dol.gov/ui/data.pdf. , May 21, 2020. https://www.dol.gov/ui/data.pdf.
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appropriation measure that includes $296 billion in spending and a total value of about $1.1 appropriation measure that includes $296 billion in spending and a total value of about $1.1
trillion in loans and guarantees, funded through new bonds.trillion in loans and guarantees, funded through new bonds.~~152~~153
On May 28, the Department of Labor announced that an additional 1.9 million (revised) On May 28, the Department of Labor announced that an additional 1.9 million (revised)
Americans filed for Unemployment Insurance, raising the ten-week total to 42.6 million.Americans filed for Unemployment Insurance, raising the ten-week total to 42.6 million.~~153~~154
June 2020
On June 4, the U.S. Census Bureau reported that U.S. imports fell by 13.7% and exports fell by 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 20.5% in April, increasing the monthly current account deficit and registering the largest decline
in U.S. trade since the global financial crisis.in U.S. trade since the global financial crisis.~~154~~155 In addition, the Labor Department announced that In addition, the Labor Department announced that
an additional 1.9 million Americans filed for unemployment insurance, increasing the 11-week an additional 1.9 million Americans filed for unemployment insurance, increasing the 11-week
total to 44 million.total to 44 million.~~155~~156 The European Central Bank announced that it would double to $1.5 trillion The European Central Bank announced that it would double to $1.5 trillion
its Pandemic Emergency Purchase Program to stimulate the European economy.its Pandemic Emergency Purchase Program to stimulate the European economy.~~156~~157 The DJIA rose The DJIA rose
by more than 800 points on June 5 as a positive jobs report, apparently signaling to some that the 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.U.S. economy would recover quickly from the pandemic-driven economic downturn.~~157~~158 OPEC OPEC
and Russia reportedly agreed on June 7 to maintain their cuts in oil production for one additional and Russia reportedly agreed on June 7 to maintain their cuts in oil production for one additional
month in an effort to raise international oil prices.month in an effort to raise international oil prices.~~158~~159
On June 8, the DJIA rose nearly 2% reportedly on positive jobs data, extending gains in the value 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.of the index and rising to its highest level since late February.~~159~~160 Most foreign markets indices Most foreign markets indices
similarly rose. The World Bank forecasted that emerging and developing economies would similarly rose. The World Bank forecasted that emerging and developing economies would
contract in 2020 for the first time in 60 years.contract in 2020 for the first time in 60 years.~~160~~161
On June 11, the DJIA fell by more than 1,800 points, or 6.9% reportedly on fears that a spike in On June 11, the DJIA fell by more than 1,800 points, or 6.9% reportedly on fears that a spike in
new coronavirus cases signaled the pandemic was not contained and over concerns about U.S. new coronavirus cases signaled the pandemic was not contained and over concerns about U.S.
economic growth as a result of projections by the Federal Reserve that were interpreted as economic growth as a result of projections by the Federal Reserve that were interpreted as
gloomy.gloomy.~~161~~162 The Labor Department reported that an additional 1.57 million Americans filed for The Labor Department reported that an additional 1.57 million Americans filed for
unemployment insurance during the previous week, raising the 12-week total from mid-March to unemployment insurance during the previous week, raising the 12-week total from mid-March to
44 million Americans.44 million Americans.~~162~~163 According to a report by Eurostat on June 12, industrial production in According to a report by Eurostat on June 12, industrial production in

~~152~~153 Harding, Robin, Japan’s Cabinet Approves Extra $1.1 Trillion Budget to Counter Recession, Harding, Robin, Japan’s Cabinet Approves Extra $1.1 Trillion 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.
~~153~~154 Unemployment Insurance Weekly Claims, May 29, 2020. https://www.dol.gov/ui/data.pdf. , May 29, 2020. https://www.dol.gov/ui/data.pdf.
~~154~~155 Monthly U.S. International Trade in Goods and Services in April 2020, U.S. Census Bureau, June 4, 2020. , U.S. Census Bureau, June 4, 2020.
https://www.census.gov/foreign-trade/data/index.html. https://www.census.gov/foreign-trade/data/index.html.
~~155~~156 Unemployment Insurance Weekly Claims, June 4, 2020. https://www.dol.gov/ui/data.pdf. , June 4, 2020. https://www.dol.gov/ui/data.pdf.
~~156~~157 Arnold, Martin, ECB Boosts Bond-Buying Stimulus Package by €600, Arnold, Martin, ECB Boosts Bond-Buying Stimulus Package by €600, Financial Times, June 4, 2020. , June 4, 2020.
https://www.ft.com/content/c59ab92d-e614-4284-a028-46ee3bcf92f9. https://www.ft.com/content/c59ab92d-e614-4284-a028-46ee3bcf92f9.
~~157~~158 Telford, Taylor, and Thomas Heath, Dow Soars 1,000 Points as Wall Street Closes in on Pre-Pandemic Levels Telford, Taylor, and Thomas Heath, Dow Soars 1,000 Points as Wall Street Closes in on Pre-Pandemic Levels, The
Washington Post, June 5, 2020. https://www.washingtonpost.com/business/2020/06/05/stocks-market-today-, June 5, 2020. https://www.washingtonpost.com/business/2020/06/05/stocks-market-today-
coronavirus-economy/. coronavirus-economy/.
~~158~~159 Sheppard, David, Anjli Raval, and Derek Brower, OPEC and Russia Agree to Extend Record Oil Supply Cuts, 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. , June 7, 2020. https://www.ft.com/content/88747416-0fc4-4808-999f-753793589ca7.
~~159~~160 Dempsey, Harry, Bryce Elder, and Hudson Lockett, U.S. Stocks Erase Losses for the Year, Dempsey, Harry, Bryce Elder, and Hudson Lockett, U.S. Stocks Erase Losses for the Year, Financial Times, June 8, June 8,
2020. https://www.ft.com/content/1dfaeb58-6d65-4f17-b710-b1ebc6622649. 2020. https://www.ft.com/content/1dfaeb58-6d65-4f17-b710-b1ebc6622649.
~~160~~161 Politi, James, Emerging Economies Forecast to Shrink for First Time in 60 Years, Politi, James, Emerging Economies Forecast to Shrink for First Time in 60 Years, Financial Times, June 8, 2020. , June 8, 2020.
https://www.ft.com/content/47998ee3-b2d3-4066-a914-edbf60b797b5. https://www.ft.com/content/47998ee3-b2d3-4066-a914-edbf60b797b5.
~~161~~162 Seigel, Rachel and Thomas Heath, Dow Slides More Than 1,800 Points on Fears of Coronavirus Resurgence, More Seigel, Rachel and Thomas Heath, Dow Slides More Than 1,800 Points on Fears of Coronavirus Resurgence, More
Economic Pain, Economic Pain, The Washington Post, June 11, 2020. https://www.washingtonpost.com/business/2020/06/11/markets-, June 11, 2020. https://www.washingtonpost.com/business/2020/06/11/markets-
today-fed-coronavirus/. today-fed-coronavirus/.
~~162~~163 Unemployment Insurance Weekly Claims, Department of Labor, June 11, 2020. https://www.dol.gov/ui/data.pdf. , Department of Labor, June 11, 2020. https://www.dol.gov/ui/data.pdf.
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the Eurozone fell by 17.1% in April, reportedly the largest decline in production recorded since 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 records began in 1991. The decline reflects lower levels of economic activity in manufacturing
and construction throughout the Eurozone.and construction throughout the Eurozone.~~163~~164 The Federal Reserve released its semi-annual The Federal Reserve released its semi-annual
Monetary Policy Report..~~164~~165
The Institute of International Finance reported on June 15, that capital outflows from developing 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 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.issuance through the international bond market, rather than by refinancing existing debt.~~165~~166
In testimony before the Senate Banking Committee on June 17, Federal Reserve Chairman 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 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.to rebound, there was “significant uncertainty” about the timing and strength of the recovery.~~166~~167
On June 17, the Bank of Japan announced that it was maintaining its low interest rates even as it 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.increased its coronavirus lending facility to $1 trillion.~~167~~168 The U.S. Energy Information The U.S. Energy Information
Administration reported that U.S. crude oil production fell to its lowest point since March 2018, 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, while stockpiles reached record highs. The price of Brent crude reached $41 per barrel,
encouraging some U.S. producers to consider restarting wells that were closed when prices encouraging some U.S. producers to consider restarting wells that were closed when prices
dropped to around $20 per barrel.dropped to around $20 per barrel.~~168~~169
On June 18, the Department of Labor announced that an additional 1.54 million Americans filed On June 18, the Department of Labor announced that an additional 1.54 million Americans filed
for unemployment during the week, raising the 13-week total to 45.7 million Americans.for unemployment during the week, raising the 13-week total to 45.7 million Americans.~~169~~170
During May, U.S. retail sales increased by 17.7% as some businesses began reopening and During May, U.S. retail sales increased by 17.7% as some businesses began reopening and
increasing optimism in financial markets that economic activity was on course for a quick increasing optimism in financial markets that economic activity was on course for a quick
recovery. Concerns over trade disputes and a rise in new coronavirus cases, however, reportedly recovery. Concerns over trade disputes and a rise in new coronavirus cases, however, reportedly
overcame the optimism of increased sales and were factors in DJIA losses on June 24 of more overcame the optimism of increased sales and were factors in DJIA losses on June 24 of more
than 700 points. In addition, the IMF issued its updated economic outlook, forecasting that global than 700 points. In addition, the IMF issued its updated economic outlook, forecasting that global
economic growth would contract by 4.9% in 2020, compared with an April forecast of a decline economic growth would contract by 4.9% in 2020, compared with an April forecast of a decline
of 3.0%.of 3.0%.~~170~~171
On June 25, the ECB and the German government announced they had reached a tentative accord On June 25, the ECB and the German government announced they had reached a tentative accord
to end the conflict over the ECB’s bond-buying program.to end the conflict over the ECB’s bond-buying program.~~171~~172 Elsewhere, the Labor Department Elsewhere, the Labor Department
reported that an additional 1.48 million Americans filed for unemployment insurance, raising the reported that an additional 1.48 million Americans filed for unemployment insurance, raising the
14-week total from mid-March to over 47 million.14-week total from mid-March to over 47 million.~~172~~173 Between June 1 and June 26, the DJIA Between June 1 and June 26, the DJIA

~~163~~164 Arnold, Martin, Eurozone Industrial Production Falls by Record 17.1% in April, Arnold, Martin, Eurozone Industrial Production Falls by Record 17.1% in April, Financial Times, June 12, 2020. , June 12, 2020.
https://www.ft.com/content/e3301cd6-27ce-35f0-829a-c6613849b378. https://www.ft.com/content/e3301cd6-27ce-35f0-829a-c6613849b378.
~~164~~165 Board of Governors of the Federal Reserve System, Board of Governors of the Federal Reserve System, Monetary Policy Report, June 12, 2020. , June 12, 2020.
https://www.federalreserve.gov/monetarypolicy/2020-06-mpr-summary.htm https://www.federalreserve.gov/monetarypolicy/2020-06-mpr-summary.htm
~~165~~166 Wheatley, Jonathan, Developing Economies Borrow More Despite Debt Relief Initiative, Wheatley, Jonathan, Developing Economies Borrow More Despite Debt Relief Initiative, Financial Times, June 15, June 15,
2020. https://www.ft.com/content/54c545aa-01b5-4e95-8adc-e680f5d82be1. 2020. https://www.ft.com/content/54c545aa-01b5-4e95-8adc-e680f5d82be1.
~~166~~167 Powell, Jerome H., Powell, Jerome H., Semiannual Monetary Report to the Congress, June 16, 2020. https://www.federalreserve.gov/ June 16, 2020. https://www.federalreserve.gov/
newsevents/testimony/powell20200616a.htm. newsevents/testimony/powell20200616a.htm.
~~167~~168 Harding, Robin, Bank of Japan Pledges $1 Trillion in Coronavirus Lending, Harding, Robin, Bank of Japan Pledges $1 Trillion in Coronavirus Lending, Financial Times, June 17, 2020. , June 17, 2020.
https://www.ft.com/content/5d8e5df2-dfb6-44f1-a434-ab8a745d37ba. https://www.ft.com/content/5d8e5df2-dfb6-44f1-a434-ab8a745d37ba.
~~168~~169 Brower, Derek, U.S. Oil Production Drops to Lowest Point Since 2018, Brower, Derek, U.S. Oil Production Drops to Lowest Point Since 2018, Financial Times, June 17, 2020. , June 17, 2020.
https://www.ft.com/content/6b877160-28e4-4ddf-8959-2a7cd0acd4ba. https://www.ft.com/content/6b877160-28e4-4ddf-8959-2a7cd0acd4ba.
~~169~~170 Unemployment Insurance Weekly Claims, Department of Labor, June 18, 2020. https://www.dol.gov/ui/data.pdf. , Department of Labor, June 18, 2020. https://www.dol.gov/ui/data.pdf.
~~170~~171 World Economic Outlook Update, p. 5. , p. 5.
~~171~~172 Arnold, Martin, Berlin and ECB Signal End to Legal Impasse to Bond-Buying, Arnold, Martin, Berlin and ECB Signal End to Legal Impasse to Bond-Buying, Financial Times, June 22, 2020. , June 22, 2020.
https://www.ft.com/content/5f000a25-3d54-4610-8579-cab9b21759ee. https://www.ft.com/content/5f000a25-3d54-4610-8579-cab9b21759ee.
~~172~~173 Unemployment Insurance Weekly Claims, Department of Labor, June 25, 2020. https://www.dol.gov/ui/data.pdf. , Department of Labor, June 25, 2020. https://www.dol.gov/ui/data.pdf.
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posted 13 days with gains and 7 days of declines, with the DJIA value at the end of the period posted 13 days with gains and 7 days of declines, with the DJIA value at the end of the period
nearly the same as it was in early March 2020. On June 24 and 26, the DJIA index fell by more nearly the same as it was in early March 2020. On June 24 and 26, the DJIA index fell by more
than 700 points, reportedly over investors’ concerns over a spike in new coronavirus cases in than 700 points, reportedly over investors’ concerns over a spike in new coronavirus cases in
various U.S. States.various U.S. States.~~173~~174 Also on June 25, the Federal Reserve announced the result of stress tests Also on June 25, the Federal Reserve announced the result of stress tests
on 33 U.S. banks under 3 on 33 U.S. banks under 3 ~~scenarios174~~scenarios175 to ascertain their capital sufficiency given the strains to the to ascertain their capital sufficiency given the strains to the
financial system caused by COVID-19.financial system caused by COVID-19.~~175~~176 The Fed reported that all large U.S. banks are The Fed reported that all large U.S. banks are
“sufficiently capitalized” to survive the three scenarios.“sufficiently capitalized” to survive the three scenarios.~~176~~177 Both the IMF and the WTO released Both the IMF and the WTO released
forecasts indicating that global trade had declined sharply in the first quarter of 2020 and was forecasts indicating that global trade had declined sharply in the first quarter of 2020 and was
projected to post similarly sharp declines for the year. By the end of June, the international price projected to post similarly sharp declines for the year. By the end of June, the international price
of crude had risen slightly above $40 per barrel, regaining about half the value it had lost during of crude had risen slightly above $40 per barrel, regaining about half the value it had lost during
the first quarter of 2020. the first quarter of 2020.
July 2020
The Department of Labor announced on July 2 that an additional 1.4 million Americans had filed The Department of Labor announced on July 2 that an additional 1.4 million Americans had filed
for Unemployment Insurance, raising the total to 48.7 million over the 15-week period from mid-for Unemployment Insurance, raising the total to 48.7 million over the 15-week period from mid-
March.March.~~177~~178 The insured seasonally adjusted unemployment rate in June was estimated at 13.2%, The insured seasonally adjusted unemployment rate in June was estimated at 13.2%,
unchanged from the revised rate in the previous week. On July 2, the BLS also released data on unchanged from the revised rate in the previous week. On July 2, the BLS also released data on
the employment situation in June, indicating that non-farm payroll rose by 4.8 million, lowering the employment situation in June, indicating that non-farm payroll rose by 4.8 million, lowering
the unemployment rate to 11.5%. The Census Bureau also released U.S. trade data for May the unemployment rate to 11.5%. The Census Bureau also released U.S. trade data for May
indicating that the U.S. merchandise trade deficit rose by nearly 10% over that recorded in April indicating that the U.S. merchandise trade deficit rose by nearly 10% over that recorded in April
as exports fell by more than imports.as exports fell by more than imports.~~178~~179
On July 9, the BLS reported that an additional 1.3 Americans filed for Unemployment Insurance, On July 9, the BLS reported that an additional 1.3 Americans filed for Unemployment Insurance,
raising the 16-week total from mid-March to 50 million.raising the 16-week total from mid-March to 50 million.~~179~~180 On July 17, the European Council met On July 17, the European Council met
to approve a proposed plan to provide an additional €750 billion in pandemic support funds to to approve a proposed plan to provide an additional €750 billion in pandemic support funds to
assist European economies. Negotiations failed to produce an agreement and talks continued over assist European economies. Negotiations failed to produce an agreement and talks continued over
the weekend and resumed on July 20. On July21, however, European leaders announced they had the weekend and resumed on July 20. On July21, however, European leaders announced they had
agreed to a €750 billion (about $859 billion) pandemic economic relief package. agreed to a €750 billion (about $859 billion) pandemic economic relief package.
On July 29, the Federal Open Market Committee (FOMC) announced it was not changing key interest rates. It also announced that it was extending foreign currency swap lines and a number of its lending facilities. Federal Reserve Chairman P:owell indicated 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.” On July 30, second quarter GDP data indicated that U.S. economic output fell by 9.5% from the previous quarter, but at an annualized rate of 33%. The Department of Labor also announced that an additional 1.4 174
~~173~~ Elder, Bryce, Sarah Provan, and Hudson Lockett, U.S. Stocks End Lower as States Roll Back Reopening Measures, Elder, Bryce, Sarah Provan, and Hudson Lockett, U.S. Stocks End Lower as States Roll Back Reopening Measures,
Financial Times, June 26, 2020. https://www.ft.com/content/5013d097-c1bf-4ed9-979a-842749e5956a. , June 26, 2020. https://www.ft.com/content/5013d097-c1bf-4ed9-979a-842749e5956a.
~~174~~175 The three scenarios include (1) a rapid, or “V”-shaped recovery; (2) a slower, or “U”-shaped recovery; and (3) a The three scenarios include (1) a rapid, or “V”-shaped recovery; (2) a slower, or “U”-shaped recovery; and (3) a
“W”-shaped or double-dip recession with a short-lived recovery followed by a severe drop in activity later this year due “W”-shaped or double-dip recession with a short-lived recovery followed by a severe drop in activity later this year due
to a second COVID event. to a second COVID event. Assessment of Bank Capital During the Recent Coronavirus Event, Board of Governors of , Board of Governors of
the Federal Reserve System, June 2020, p. 2. the Federal Reserve System, June 2020, p. 2.
~~175~~176 Ibid. Ibid.
~~176~~177 Ibid., pp. 1-2. Ibid., pp. 1-2.
~~177~~178 Unemployment Insurance Weekly Claims, July 1, 2020. https://www.dol.gov/ui/data.pdf. , July 1, 2020. https://www.dol.gov/ui/data.pdf.
~~178~~179 Monthly U.S. International Trade in Goods and Services, May 2020, U.S. Census Bureau, July 2, 2020. , U.S. Census Bureau, July 2, 2020.
https://www.census.gov/foreign-trade/data/index.html. https://www.census.gov/foreign-trade/data/index.html.
~~179~~180 Unemployment Insurance Weekly Claims, July 9, 2020. https://www.dol.gov/ui/data.pdf. , July 9, 2020. https://www.dol.gov/ui/data.pdf.
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million individuals applied for unemployment insurance during the previous week, raising the 19-week total to 54 million. 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 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 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 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, 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. 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 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 (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 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 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 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 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. 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 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 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 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 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 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 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 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 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. (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 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 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 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 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 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 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 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) 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 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 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 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) 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 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. 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 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 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 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 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. measures wil also have an important role in mitigating the scale and length of any global economic downtown.
Prepared by Martin A. Weiss, CRS. Prepared by Martin A. Weiss, CRS.
Policy Responses
In response to growing concerns over the global economic impact of the pandemic, G-7 finance 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 ministers and central bankers released a statement on March 3, 2020, indicating they will “use all
appropriate policy tools” to sustain economic growth.appropriate policy tools” to sustain economic growth.~~180~~181 The Finance Ministers also pledged The Finance Ministers also pledged

~~180~~181 Statement of G-7 Finance Ministers and Central Bank Governors, March 3, 2020. https://home.treasury.gov/news/, 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/.~~
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link to page link to page ~~82 link to page 50~~83 Global Economic Effects of COVID-19

fiscal support to ensure health systems can sustain efforts to fight the outbreak. fiscal support to ensure health systems can sustain efforts to fight the outbreak.~~181~~182 In most cases, In most cases,
however, countries have pursued their own divergent strategies, in some cases including banning 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) 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 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.”concerns about the “evolving risks to economic activity of the COVID-19.”~~182~~183 At the time, the cut At the time, the cut
was the largest one-time reduction in the interest rate by the Fed since the global financial crisis. 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 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 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 financial systems through a combination of measures, including lowering capital buffers and
reserve requirements, creating temporary lending facilities for banks and businesses, and easing 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 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, economic activity. In general, these measures include making payments directly to households,
temporarily deferring tax payments, extending unemployment insurance, and increasing temporarily deferring tax payments, extending unemployment insurance, and increasing
guarantees and loans to businesses. guarantees and loans to businesses.
See Appendix A to this report for detailed information about the policy actions by individual to this report for detailed information about the policy actions by individual
governments.governments.~~183~~184
The United States
Recognizing the growing impact the pandemic is having on financial markets and economic 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 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 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 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 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 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. communities and disrupted economic activity in many countries, including the United States.
Global financial conditions have also been significantly affected.Global financial conditions have also been significantly affected.~~184~~185” On March 31, 2020, the ” On March 31, 2020, the
Trump Administration announced that it was suspending for 90 days tariffs it had placed on 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.imports of apparel and light trucks from China, but not on other consumer goods and metals.~~185~~186
On April 29, the Bureau of Economic Analysis released first quarter U.S. GDP data indicating 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 that the U.S. economy had contracted by 4.8% at an annual rate, as indicated ~~in Figure 9. A~~
in Error! Reference source not found.. A decline in economic activity of 30% or more was recorded in motor vehicles and parts, recreation, 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 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 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 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.~~

~~181~~ 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/. 182 Giles, et al., “Finance Ministers Ready to Take Action.” Giles, et al., “Finance Ministers Ready to Take Action.”
~~182~~183 Federal Reserve Releases FOMC Statement, March 3, 2020, https://www.federalreserve.gov/newsevents/, March 3, 2020, https://www.federalreserve.gov/newsevents/
pressreleases/monetary20200303a.htm. pressreleases/monetary20200303a.htm.
~~183~~184 Stage Three Proposal, U.S. Department of the Treasury, March 17, 2020. https://www.washingtonpost.com/context/, 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=department-of-treasury-proposal-for-COVID-19-response/6c2d2ed5-a18b-43d2-8124-28d394fa51ff/?itid=
lk_inline_manual_3. lk_inline_manual_3.
~~184~~185 Federal Reserve Issues FOMC Statement, March 15, 2020. https://www.federalreserve.gov/newsevents/, March 15, 2020. https://www.federalreserve.gov/newsevents/
pressreleases/monetary20200315a.htm. pressreleases/monetary20200315a.htm.
~~185~~186 Politi, James and Aime Williams, “Trump to Suspend Some Tariffs for 90 Days,” Politi, James and Aime Williams, “Trump to Suspend Some Tariffs for 90 Days,” Financial Times, March 31, 2020. , March 31, 2020.
https://www.ft.com/content/46add447-2048-4348-bd34-2088ad0e3bc8. https://www.ft.com/content/46add447-2048-4348-bd34-2088ad0e3bc8.
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eating at restaurants and other commercial food service establishments to preparing and eating food at home. Figure 9. U.S. GDP, Percentage Change From Preceding Quarter~~, 1st Quarter 2020~~

Source: Bureau of Economic Analysis. Created by CRS. Bureau of Economic Analysis. Created by CRS.
On July 2, the U.S. Census Bureau reported an increase in the overall U.S. trade deficit in May on On July 2, the U.S. Census Bureau reported an increase in the overall U.S. trade deficit in May on
a month-to-month basis of $4.8 billion, reflecting lower amounts of exports and imports for goods a month-to-month basis of $4.8 billion, reflecting lower amounts of exports and imports for goods
and services, as indicated in and services, as indicated in Figure 10..~~186~~187 Exports and imports of both goods and services fell Exports and imports of both goods and services fell
from the previous month, although the deficit in goods trade increased from $71 billion in April from the previous month, although the deficit in goods trade increased from $71 billion in April
to $76 billion in May; the surplus in services trade fell from $22 billion to $21.5 billion. Through to $76 billion in May; the surplus in services trade fell from $22 billion to $21.5 billion. Through
May, U.S. goods exports had fallen by 15% in value terms compared with the comparable period May, U.S. goods exports had fallen by 15% in value terms compared with the comparable period
in 2019; imports of goods had fallen by 12%, reflecting the overall decline in global trade. in 2019; imports of goods had fallen by 12%, reflecting the overall decline in global trade.
~~Figure 10. U.S. Exports and Imports of Goods and Services 2020~~
~~In billions of dollars~~

Source: Census Bureau. Created by CRS.

~~186 Monthly U.S. International Trade in Goods and Services, May 2020, Census Bureau, July 2, 2020.~~
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187 Monthly U.S. International Trade in Goods and Services, May 2020, Census Bureau, July 2, 2020. Congressional Research Service 46 Global Economic Effects of COVID-19 Figure 10. U.S. Exports and Imports of Goods and Services 2020 In billions of dollars Source: Census Bureau. Created by CRS. GDP data through the second quarter indicate that U.S. trade has dropped sharply in real, or index terms, in both the quantity of goods exported or imported and the value of those goods, as indicated in Figure 11. The data show the sharp drop in U.S. trade, both exports and imports, as a result of the global lockdown due to actions to contain the spread of the viral pandemic. In quantity terms, exports fell by 25%, while imports fell by 15% in the second quarter compared with the preceding quarter. In value terms, the price of exports fell by 6%, while the price of imports fell by 3.7% compared with the first quarter. Figure 11. Price and Quantity Indexes, U.S. Exports and Imports Source: Bureau of Economic Analysis. Created by CRS. Notes: 2012 = 100.
On May 8, the Department of Labor reported that the U.S. non-farm unemployment rate in April 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 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 unemployment rate of 14% of a total civilian labor force of 156 million. The unemployment rate
Congressional Research Service 47 Global Economic Effects of COVID-19 does not include approximately 10 million workers who are involuntarily working part-time and does not include approximately 10 million workers who are involuntarily working part-time and
another 9 million individuals seeking employment. As indicated in another 9 million individuals seeking employment. As indicated in Figure 1112, the number of , the number of
unemployed individuals increased the most in the leisure and hospitality sector, reflecting 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 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 employment losses were widely spread across the economy, affecting every non-farm sector and
all labor groups. all labor groups.
Figure 1112. Change in U.S. Employment by Major Industrial Sector

Source: The Employment Situation, Bureau of Labor Statistics, April, May, June 2020. Created by CRS. , Bureau of Labor Statistics, April, May, June 2020. Created by CRS.
In a speech on May 13, Federal Reserve Chairman Jerome Powell stated that the Federal 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 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.”in households making less than $40,000 a year had lost a job in March.”~~187~~188 Chairman Powell also Chairman Powell also
indicated that given the extraordinary nature of the current economic downturn the Fed would, indicated that given the extraordinary nature of the current economic downturn the Fed would,
“continue to use our tools to their fullest until the crisis has passed and the economic recovery is “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 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 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 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 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 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 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 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 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 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 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—recovery when it comes. These businesses are a principal source of job creation—

~~187 Current Economic Issues; Speech at the Peterson Institute for International Economics, Jerome H. Powell, May 13,~~
~~2020.~~
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something we will sorely need as people seek to return to work. A prolonged recession and 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 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 the resurgence of jobs as well as the growth of capital stock and the pace of technological
188 Current Economic Issues; Speech at the Peterson Institute for International Economics, Jerome H. Powell, May 13, 2020. Congressional Research Service 48 Global Economic Effects of COVID-19 advancement. The result could be an extended period of low productivity growth and advancement. The result could be an extended period of low productivity growth and
stagnant incomes.stagnant incomes.~~188~~189
Monetary ~~Policy189~~Policy190
Forward Guidance
Forward guidance refers to Fed public communications on its future plans for short-term interest 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 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 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 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 “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.” events and is on track to achieve its maximum employment and price stability goals.”
Quantitative Easing
Large-scale asset purchases, popularly referred to as Large-scale asset purchases, popularly referred to as quantitative easing or or QE, were also used , were also used
during the financial crisis. Under QE, the Fed expanded its balance sheet by purchasing 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 securities. Three rounds of QE from 2009 to 2014 increased the Fed’s securities holdings by $3.7
trillion. trillion.
On March 23, the Fed announced that it would increase its purchases of Treasury securities and 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 mortgage-backed securities (MBS)—including commercial MBS—issued by government
agencies or government-sponsored enterprises to “the amounts needed to support smooth market 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 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 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 of the Fed’s balance sheet is projected to exceed its post-financial crisis peak of $4.5 trillion. One
notable difference from previous rounds of QE is that the Fed is purchasing securities of different 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. 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 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. 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 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. 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 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 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 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 federal funds rate. Following the financial crisis, the Fed’s large balance sheet meant that repos

~~188 Ibid.~~
~~189~~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 $500 189 Ibid. 190 This section was prepared by Marc Labonte, Specialist in Macroeconomic Policy, Government and Finance This section was prepared by Marc Labonte, Specialist in Macroeconomic Policy, Government and Finance
Division, CRS. CRS Insight IN11259, Division, CRS. CRS Insight IN11259, Federal Reserve: Recent Actions in Response to COVID-19, by Marc Labonte. , by Marc Labonte.
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~~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 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 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 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 (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 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 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 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 swap lines to provide additional dollars to meet global demand and is available to a broader group
of central banks than the swap lines. of central banks than the swap lines.
Discount Window
In its March 15 announcement, the Fed encouraged banks (insured depository institutions) to 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 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 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. 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 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 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 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 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 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 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 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 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 global demand. The new facility allows central banks and international monetary authorities to
exchange their U.S. Treasury securities held with the Federal Reserve for U.S. dollars, which can 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.then be made available to institutions in their jurisdictions.~~190~~191
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 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 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 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 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 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 window, it provides short-term, fully collateralized loans to primary dealers.
~~190~~191 For additional information about swap lines, see CRS In Focus IF11489, 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. , by Barbara L. Schwemle.
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~~which is akin to a discount window for primary dealers. Like the discount~~
~~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 selling to meet redemptions. market funds are selling to meet redemptions.
 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 6, the Fed announced the Payroll Protection Program Lending Facility  On April 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 small businesses to pay employees. These The PPP provides low-cost loans to small businesses to pay employees. These
loans do not pose credit risk to the Fed because they are guaranteed by the Small loans do not pose credit risk to the Fed because they are guaranteed by the Small
Business Administration. Business Administration.
 On April 9, the Fed announced the Main Street Lending Program (MSLP), which  On April 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 billion in revenues. The loans to businesses would defer employees or up to $2.5 billion 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 9, the Fed announced the Municipal Liquidity Facility (MLF) to  On April 9, the Fed announced the Municipal Liquidity 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 will only purchase debt of larger counties liquidity in that market. The facility will 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 billion in emergency funding to support efforts to fight COVID-19; President appropriate $8.3 billion 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 additional protections for health care workers. Other countries have employers to provide additional protections for health care workers. Other countries have
indicated they will also provide assistance to workers and to some businesses. Congress also is indicated they will 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
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payroll tax, payroll tax,~~191~~192 and extended of the tax filing deadline. and extended of the tax filing deadline.~~192~~193 President Trump has taken additional President Trump has taken additional
actions, including actions, including
 Announcing on March 11, 2020, restrictions on all travel from Europe to the  Announcing on March 11, 2020, restrictions on all travel from Europe to the
United States for 30 days, directing the Small Business Administration (SBA) to United States for 30 days, directing the Small Business Administration (SBA) to
offer low-interest loans to small businesses, and directing the Treasury offer low-interest loans to small 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.~~193~~194
 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
individuals identify symptoms, increased oil purchases for the Strategic Oil individuals 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.~~194~~195
 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.~~195~~196
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 formally implement President Trump’s proposal by providing direct payments to (S. 3548) to formally implement President Trump’s proposal by providing direct payments to
taxpayers, loans and guarantees to airlines and other industries, and assistance for small taxpayers, loans and guarantees to airlines and other industries, and assistance for small
businesses, actions similar to those of various foreign governments. The House adopted the 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 measure as H.R. 748 on March 27, and President Trump signed the measure (P.L. 116-136) on
March 27. The law March 27. The law
 Provides funding for $1,200 tax rebates to individuals, with additional $500  Provides funding for $1,200 tax rebates to individuals, with additional $500
payments per qualifying child. The rebate begins phasing out when incomes payments per qualifying child. The rebate begins phasing out when incomes
exceed $75,000 (or $150,000 for joint filers). exceed $75,000 (or $150,000 for joint filers).
 Assists small businesses by providing funding for, forgivable bridge loans; and  Assists small businesses by providing funding for, forgivable bridge loans; and
additional funding for grants and technical assistance; authorizes emergency additional funding for grants and technical assistance; authorizes emergency
loans to distressed businesses, including air carriers, and suspends certain loans to distressed businesses, including air carriers, and suspends certain
aviation excise taxes. aviation excise taxes.
 Creates a $367 billion loan program for small businesses, establishes a $500  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 billion lending fund for industries, cities and states, a $150 billion for state and
local stimulus funds, and $130 billion for hospitals. local stimulus funds, and $130 billion for hospitals.

~~191~~192 Armus, Theo, “Federal, State Officials Attempt to Fight Virus Through Social Distancing, Stimulus Package,” 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/. , March 11, 2020. https://www.washingtonpost.com/world/2020/03/11/Covid-19-live-updates/.
~~192~~193 Sevastopulo, Demetri, “US Treasury Considers Tax Filing Extension to Ease Virus Impact,” 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. March 11, 2020. https://www.ft.com/content/c65a6e40-639f-11ea-b3f3-fe4680ea68b5.
~~193~~194 McAuley, James, and Michael Birnbaum, “Europe Blindsided by Trump’s Travel Restrictions, with Many Seeing McAuley, James, and Michael Birnbaum, “Europe Blindsided by Trump’s Travel 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.
~~194~~195 Fritz, Angela and Meryl Kornfield, “President Trump Declares a National Emergency, Freeing $50 Billion in Fritz, Angela and Meryl Kornfield, “President Trump 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/.
~~195~~196 Hellmann, Jessie, “Trump Invokes Defense Production Act as Covid-19 Response,” Hellmann, Jessie, “Trump 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.
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 Increases unemployment insurance benefits, expands eligibility and offer workers  Increases unemployment insurance benefits, expands eligibility and offer workers
an additional $600 a week for four month, in addition to state unemployment an additional $600 a week for four month, in addition to state unemployment
programs.programs.~~196~~197
 Establishes special rules for certain tax-favored withdrawals from retirement  Establishes special rules for certain tax-favored withdrawals from retirement
plans; delays due dates for employer payroll taxes and estimated tax payments plans; delays due dates for employer payroll taxes and estimated tax payments
for corporations; and revises other provisions, including those related to losses, for corporations; and revises other provisions, including those related to losses,
charitable deductions, and business interest. 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 for volunteer health care professionals; prioritizes COVID-19; limits liability for volunteer health care professionals; prioritizes
Food and Drug Administration (FDA) review of certain drugs; allows emergency Food and Drug Administration (FDA) review of certain drugs; allows 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, Pell grants, and foreign institutions. federal work-study, subsidized loans, Pell 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 23, 2020, the House passed H.R. 266 (P.L. 116-139), the Paycheck Protection Program On April 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 billion for small business loans, health care providers, and COVID-19 measure provides $484 billion for small business loans, health care providers, and COVID-19
testing. In particular, the law testing. In particular, the law
 Provides additional lending authority for certain Small Business Administration  Provides additional lending authority for certain Small 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 small businesses during the COVID-19 pandemic; and (2) advances on to small 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 eligibility for such disaster loans and advances to include division also expands eligibility for such disaster loans and advances to include
agricultural enterprises. agricultural enterprises.
 Provides $100 billion in FY2020 supplemental appropriations to HHS for the  Provides $100 billion in FY2020 supplemental appropriations to HHS for the
Public Health and Social Services Emergency Fund, including $75 billion to Public Health and Social Services Emergency Fund, including $75 billion 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 billion for expenses to that are attributable to the coronavirus outbreak; and $25 billion 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.
 Allocates specified portions of the $25 billion for COVID-19 testing to states,  Allocates specified portions of the $25 billion 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

~~196~~197 For additional information about unemployment and sick leave provisions, see CRS Insight IN11249, 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 , by Sarah A. Donovan, Katelin P. Isaacs, and Julie
M. Whittaker, and CRS In Focus IF11487, M. Whittaker, and CRS In Focus IF11487, The Families First Coronavirus Response Act Leave Provisions, by Sarah , by Sarah
A. Donovan and Jon O. ShimabukuroA. Donovan and Jon O. Shimabukuro.
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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 trillion On May 12, House Democrats introduced H.R. 6800, the Heroes Act, to provide a $3 trillion
supplemental spending bill for additional financial resources to state and local governments. The supplemental spending bill 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 bill would provisions, the bill would
 Appropriate $200 billion in hazard pay to essential workers.  Appropriate $200 billion in hazard pay to essential workers.
 Extend additional payments to individuals, for nutrition and housing assistance,  Extend additional 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.
 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 direct payments of up to $1,200 per individual.  Provide additional 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 small businesses and nonprofit organizations. grants to small 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 cost-sharing for COVID-19 treatments;  Eliminate 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 Book”—a mostly qualitative assessment of On May 27, the Federal Reserve released its “Beige Book”—a mostly qualitative assessment of
the U.S. economy produced 8 times a year by the 12 regional Federal Reserve banks—that the U.S. economy produced 8 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 fallen sharply in each of the assessment indicated that economic activity to mid-May had fallen sharply in each of the
districts.districts.~~197~~198 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 from federal economic recovery programs, as indicated in individuals from federal economic recovery programs, as indicated in Figure 12. During the . During the
same period, personal consumption fell by more than 13% as consumers curtailed spending. The same period, personal consumption fell by more than 13% as consumers curtailed spending. The
lower level of spending combined with income transfers, which households apparently deposited lower level of spending combined with income transfers, which households apparently deposited
into saving accounts, raising the personal savings rate to 33% in April at an annual rate, compared into saving accounts, raising the personal savings rate to 33% in April at an annual rate, compared
to an annual rate of 8.2% in February. In May, BEA reported that personal income fell by 4.2% to an annual rate of 8.2% in February. In May, BEA reported that personal income fell by 4.2%
compared with the previous month as government transfer payments fell by 17.2% from $6.4 compared with the previous month as government transfer payments fell by 17.2% from $6.4
trillion in April to $ 5.3 trillion in May. Also, personal consumption recovered somewhat, rising trillion in April to $ 5.3 trillion in May. Also, personal consumption recovered somewhat, rising
by 8.2% in May as some businesses began opening. As a result of the increase in spending, the by 8.2% in May as some businesses began opening. As a result of the increase in spending, the

~~197~~198 The Beige Book: Summary of Commentary on Current Economic Conditions by Federal Reserve District, May 17, , May 17,
2020, the Federal Reserve System. 2020, the Federal Reserve System.
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personal savings rate fell to 23.2%, still high by historical standards. During May, the price of personal savings rate fell to 23.2%, still high by historical standards. During May, the price of
Brent crude oil increased by 33.5%, rising from $26.44 per barrel to $35.31 per barrel. Brent crude oil increased by 33.5%, rising from $26.44 per barrel to $35.31 per barrel.
Figure 1213. U.S. Personal Income, Consumption, and Saving
Change from preceding month, unless otherwise indicated Change from preceding month, unless otherwise indicated

Source: Personal Income and Outlays, May 2020, Bureau of Economic Analysis, June 26, 2020. , Bureau of Economic Analysis, June 26, 2020.
On June 1, the Congressional Budget Office (CBO) issued a revised estimate of the effects of the 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 2020 pandemic on the U.S. economy. In the revised forecast, U.S. GDP in the second quarter of 2020
was estimated to have declined by 14.2% compared with the January 2020 forecast. The CBO was estimated to have declined by 14.2% compared with the January 2020 forecast. The CBO
also estimated that over the 2020-2030 period, cumulative real output could be 3.0% lower than also estimated that over the 2020-2030 period, cumulative real output could be 3.0% lower than
the cumulative amount estimated in January 2020.the cumulative amount estimated in January 2020.~~198~~199
On June 10, the Federal Open Market Committee released a statement indicating that the On June 10, the Federal Open Market Committee released a statement indicating that the
pandemic “poses considerable risks to the economic outlook over the medium term.”pandemic “poses considerable risks to the economic outlook over the medium term.”~~199~~200 Similarly, Similarly,
in testimony before the Senate Banking Committee on June 17, Federal Reserve Chairman Powell 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 stressed that although there were positive signs that U.S. economic growth was beginning to

~~198~~199 Congressional Budget Office, Letter to Charles A. Schumer, June 1, 2020. , Letter to Charles A. Schumer, June 1, 2020.
~~199~~200 Federal Reserve Issues FOMC Statement, Board of Governors of the Federal Reserve System, June 10, 2020. Board of Governors of the Federal Reserve System, June 10, 2020.
https://www.federalreserve.gov/newsevents/pressreleases/monetary20200610a.htm. https://www.federalreserve.gov/newsevents/pressreleases/monetary20200610a.htm.
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rebound, there was “significant uncertainty” about the timing and strength of the recovery. rebound, there was “significant uncertainty” about the timing and strength of the recovery.~~200~~201 He He
indicated that the source of the uncertainty was the path of the virus and the effectiveness of the 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 measures used to contain the disease. The accompanying Monetary Policy Report indicated the indicated the
pandemic was posing acute risks to small businesses as a result of insolvencies and that real 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.economic growth in the second quarter of 2020 would decline at a rapid pace.~~201~~202 In its forecast, In its forecast,
the Federal Open Market Committee made three projections for such major economic variables as the Federal Open Market Committee made three projections for such major economic variables as
GDP, the unemployment rate, and the personal consumption expenditure (PCE) measure of GDP, the unemployment rate, and the personal consumption expenditure (PCE) measure of
inflation compared with its December 2019 projections of the same variables, as indicated in inflation compared with its December 2019 projections of the same variables, as indicated in
Table 8. The three measures include (1) the median projected change; (2) the central tendency, The three measures include (1) the median projected change; (2) the central tendency,
which excludes the highest and lowest three projections; and (3) the range, which indicates which excludes the highest and lowest three projections; and (3) the range, which indicates
forecasts from the highest to the lowest values. According to the median forecast, U.S. GDP could forecasts from the highest to the lowest values. According to the median forecast, U.S. GDP could
fall by 6.5%, the unemployment rate could rise to 9.3%, the rate of inflation could rise by 0.8%, fall by 6.5%, the unemployment rate could rise to 9.3%, the rate of inflation could rise by 0.8%,
compared with projections made in December 2018 of a rise in GDP of 2.0%, an unemployment compared with projections made in December 2018 of a rise in GDP of 2.0%, an unemployment
rate of 3.5%, and an inflation rate of 1.9, respectively. The possible range for GDP, however rate of 3.5%, and an inflation rate of 1.9, respectively. The possible range for GDP, however
could vary between -10.2$ and -4.2% in 2020, with a possible rate of unemployment between could vary between -10.2$ and -4.2% in 2020, with a possible rate of unemployment between
7.0% and 14.0%. 7.0% and 14.0%.
According to the FOMC assessment, the range of estimates was necessary to represent the According to the FOMC assessment, the range of estimates was necessary to represent the
“extremely elevated” uncertainty related to the economic effects of the pandemic and the limited “extremely elevated” uncertainty related to the economic effects of the pandemic and the limited
historical response of the U.S. economy to past economic shocks. As a result of the “significant historical response of the U.S. economy to past economic shocks. As a result of the “significant
uncertainty and downside risks associated with the pandemic, including how much the economy uncertainty and downside risks associated with the pandemic, including how much the economy
would weaken and how long it would take to recover,” the assessment of a more pessimistic would weaken and how long it would take to recover,” the assessment of a more pessimistic
projection was judged to be no less pessimistic than the baseline scenario (median). The projection was judged to be no less pessimistic than the baseline scenario (median). The
assessment also indicated the possibility of a second wave of the viral outbreak later in 2020 with assessment also indicated the possibility of a second wave of the viral outbreak later in 2020 with
the attendant restrictions on social activities and business operations.the attendant restrictions on social activities and business operations.~~202~~203
Table 8. Economic Projections of Federal Reserve, June 2020
Percentage change, fourth quarter over previous year fourth quarter Percentage change, fourth quarter over previous year fourth quarter
Median1
Central Tendency2
Range3

Variable
2020 2021 2022 2020 2021 2022
2020 2020
2021 2021
2022 2022
2020 2020
2021 2021
2022 2022
Change in real GDP Change in real GDP
-6.5 -6.5
5.0 5.0
3.5 3.5
-7.6– -5.5 4.5–6.0 3.0–4.5 -10.0– -4.2 -1.0–7.0 -7.6– -5.5 4.5–6.0 3.0–4.5 -10.0– -4.2 -1.0–7.0
2.0–6.0 2.0–6.0
December projection December projection
2.0 2.0
1.9 1.9
1.8 1.8
2.0–2.2 2.0–2.2
1.8–2.0 1.8–2.0 1.8–2.0 1.8–2.0
1.8–2.3 1.8–2.3
1.7–2.2 1.7–2.2
1.5–2.2 1.5–2.2
Unemployment rate Unemployment rate
9.3 9.3
6.5 6.5
5.5 5.5
9.0–10.0 5.9–7.5 4.8–6.1 9.0–10.0 5.9–7.5 4.8–6.1
7.0–14.0 7.0–14.0
4.5–12.0 4.0–8.0 4.5–12.0 4.0–8.0
December projection December projection
3.5 3.5
3.6 3.6
3.7 3.7
3.5–3.7 3.5–3.7
3.5–3.9 3.5–4.0 3.5–3.9 3.5–4.0
3.3–3.8 3.3–3.8
3.3–4.0 3.3–4.0
3.3–4.1 3.3–4.1
PCE inflation PCE inflation
0.8 0.8
1.6 1.6
1.7 1.7
0.6–1.0 0.6–1.0
1.4–1.7 1.6–1.8 1.4–1.7 1.6–1.8
0.5–1.2 0.5–1.2
1.1–2.0 1.1–2.0
1.4–2.2 1.4–2.2
December projection December projection
1.9 1.9
2.0 2.0
2.0 2.0
1.8–1.9 1.8–1.9
2.0–2.1 2.0–2.2 2.0–2.1 2.0–2.2
1.7–2.1 1.7–2.1
1.8–2.3 1.8–2.3
1.8–2.2 1.8–2.2
Source: Chairman’s Federal Open Market Committee Projections Materials, June 10, 2020. June 10, 2020.
Notes: (1) For each period, the median is the middle projection when the projections are arranged from lowest (1) For each period, the median is the middle projection when the projections are arranged from lowest
to highest. (2) The central tendency excludes the three highest and three lowest projections for each variable in to highest. (2) The central tendency excludes the three highest and three lowest projections for each variable in
each year. (3) The range for a variable in a given year includes all participants’ projections, from lowest to each year. (3) The range for a variable in a given year includes all participants’ projections, from lowest to

~~200~~201 Powell, Powell, Semiannual Monetary Report to the Congress.
~~201~~202 Board of Governors of the Federal Reserve System, Board of Governors of the Federal Reserve System, Monetary Policy Report, June 12, 2020, p. 1. , June 12, 2020, p. 1.
https://www.federalreserve.gov/monetarypolicy/mpr_default.htm. https://www.federalreserve.gov/monetarypolicy/mpr_default.htm.
~~202~~203 Chairman’s Federal Open Market Committee Projections Materials, June 10, 2020, p. 9. June 10, 2020, p. 9.
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highest, for that variable in that year. Projections for the unemployment rate represent the average civilian highest, for that variable in that year. Projections for the unemployment rate represent the average civilian
unemployment rate in the fourth quarter of the year indicated. unemployment rate in the fourth quarter of the year indicated.
On June 25, the Federal Reserve (Fed) announced the result of stress tests on 33 U.S. banks under On June 25, the Federal Reserve (Fed) announced the result of stress tests on 33 U.S. banks under
three three ~~scenarios203~~scenarios204 to ascertain their capital sufficiency given the strains to the financial system to ascertain their capital sufficiency given the strains to the financial system
caused by COVID-19.caused by COVID-19.~~204~~205 The Fed reported that all large U.S. banks were “sufficiently The Fed reported that all large U.S. banks were “sufficiently
capitalized” to survive the three scenarios, but it determined that there is “material uncertainty” capitalized” to survive the three scenarios, but it determined that there is “material uncertainty”
about the trajectory for the economic recovery and corresponding uncertainty related to its effects about the trajectory for the economic recovery and corresponding uncertainty related to its effects
on the financial health of banking organizations. In addition, the Fed concluded that under the on the financial health of banking organizations. In addition, the Fed concluded that under the
first and second scenarios, all of the banks would remain well above their minimum capital ratios, first and second scenarios, all of the banks would remain well above their minimum capital ratios,
but under the third scenario (a double-dip recession), several banks would approach their but under the third scenario (a double-dip recession), several banks would approach their
minimum capital ratios.minimum capital ratios.~~205~~206 As a result, the Fed announced that it will As a result, the Fed announced that it will
 suspend share repurchases;  suspend share repurchases;
 cap the growth of dividends and impose a limit that does not exceed recent  cap the growth of dividends and impose a limit that does not exceed recent
income; income;
 require banks to reassess their capital needs and resubmit their capital plans later  require banks to reassess their capital needs and resubmit their capital plans later
this year; and this year; and
 conduct additional stress analyses later this year as data from banks become  conduct additional stress analyses later this year as data from banks become
available and economic conditions evolve. available and economic conditions evolve.~~206~~207
The Department of Labor announced on July 2 that an additional 1.4 million Americans had filed The Department of Labor announced on July 2 that an additional 1.4 million Americans had filed
for Unemployment Insurance, raising the total to 48.7 million over the 15-week period from mid-for Unemployment Insurance, raising the total to 48.7 million over the 15-week period from mid-
March.March.~~207~~208 The insured seasonally adjusted unemployment rate in June was estimated at 13.2%, The insured seasonally adjusted unemployment rate in June was estimated at 13.2%,
unchanged from the revised rate in the previous week. On July 2, the BLS also released data on unchanged from the revised rate in the previous week. On July 2, the BLS also released data on
the employment situation in June, indicating that non-farm payroll rose by 4.8 million, lowering the employment situation in June, indicating that non-farm payroll rose by 4.8 million, lowering
the unemployment rate to 11.5%.the unemployment rate to 11.5%.~~208~~209 The unemployment number does not include 9.1 million The unemployment number does not include 9.1 million
individuals working part time who would prefer to work full time and 8.2 million individuals who individuals working part time who would prefer to work full time and 8.2 million individuals who
are seeking employment. In addition, the June unemployment number does not include are seeking employment. In addition, the June unemployment number does not include
individuals who were misclassified as being employed, but absent due to temporary, pandemic individuals who were misclassified as being employed, but absent due to temporary, pandemic
closures. Had the individuals been classified as unemployed, the overall unemployment rate closures. Had the individuals been classified as unemployed, the overall unemployment rate
would have been one percentage point higher. On July 2, the Census Bureau also reported that the would have been one percentage point higher. On July 2, the Census Bureau also reported that the
U.S. goods and services trade deficit in May was $54.6 billion, up 9.7% from the April deficit as U.S. goods and services trade deficit in May was $54.6 billion, up 9.7% from the April deficit as
a result of a 4.4% drop in U.S. exports and a 0.9% drop in U.S. imports.a result of a 4.4% drop in U.S. exports and a 0.9% drop in U.S. imports.~~209~~210 Through May, U.S. Through May, U.S.
exports are down by 14% and imports were down by 13.1% in value terms compared with the exports are down by 14% and imports were down by 13.1% in value terms compared with the
same five months in 2019. same five months in 2019.

~~203~~204 The three scenarios include (1) a rapid, or “V”-shaped recovery; (2) a slower, or “U”-shaped recovery; and (3) a The three scenarios include (1) a rapid, or “V”-shaped recovery; (2) a slower, or “U”-shaped recovery; and (3) a
“W”-shaped or double-dip recession with a short-lived recovery followed by a severe drop in activity later this year due “W”-shaped or double-dip recession with a short-lived recovery followed by a severe drop in activity later this year due
to a second COVID event. to a second COVID event. Assessment of Bank Capital During the Recent Coronavirus Event, Board of Governors of , Board of Governors of
the Federal Reserve System, June 2020, p. 2. the Federal Reserve System, June 2020, p. 2.
~~204~~205 Ibid. Ibid.
~~205~~206 Ibid., p. 2. Ibid., p. 2.
~~206~~207 Ibid., pp. 1-2. Ibid., pp. 1-2.
~~207~~208 Unemployment Insurance Weekly Claims, July 1, 2020. https://www.dol.gov/ui/data.pdf. , July 1, 2020. https://www.dol.gov/ui/data.pdf.
~~208~~209 The Employment Situation—June 2020, Bureau of Labor Statistics, July 2, 2020. , Bureau of Labor Statistics, July 2, 2020.
~~209~~210 Monthly U.S. International Trade in Goods and Services, May 2020, U.S. Census Bureau, July 2, 2020. , U.S. Census Bureau, July 2, 2020.
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On July 17, the Federal Reserve Board modified its Main Street Lending Program to provide On July 17, the Federal Reserve Board modified its Main Street Lending Program to provide
greater access to credit for nonprofit organizations such as educational institutions, hospitals, and greater access to credit for nonprofit organizations such as educational institutions, hospitals, and
social service organizations. social service organizations.
On July 23, the DOL reported that an additional 1.4 million Americans filed for Unemployment On July 23, the DOL reported that an additional 1.4 million Americans filed for Unemployment
Insurance during the previous week, raising the 18-week total from mid-March to 51 million.Insurance during the previous week, raising the 18-week total from mid-March to 51 million.~~210~~211
The insured seasonally adjusted unemployment rate for the week was estimated at 11.1%, down The insured seasonally adjusted unemployment rate for the week was estimated at 11.1%, down
from the rate the previous week of 11.9%. On a seasonally adjusted basis, the number of insured from the rate the previous week of 11.9%. On a seasonally adjusted basis, the number of insured
unemployed workers was 16.2 million in late-July, down from a peak of 25 million in mid-May. unemployed workers was 16.2 million in late-July, down from a peak of 25 million in mid-May.
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..~~211~~212
Europe
Until recently, European countries have not displayed a synchronized fiscal policy response Until recently, European countries have not displayed a synchronized fiscal policy response
similar to the one they developed during the 2008-2009 global financial crisis, but that reportedly similar to the one they developed during the 2008-2009 global financial crisis, but that reportedly
changed with the adoption of a pandemic economic recovery package in July 2020. For the most changed with the adoption of a pandemic economic recovery package in July 2020. For the most
part, EU members have used a combination of national fiscal policies and bond buying by the part, EU members have used a combination of national fiscal policies and bond buying by the
ECB to address the economic impact of the pandemic. Individual countries have adopted ECB to address the economic impact of the pandemic. Individual countries have adopted
quarantines and required business closures, travel and border restrictions, tax holidays for quarantines and required business closures, travel and border restrictions, tax holidays for
businesses, extensions of certain payments and loan guarantees, and subsidies for workers and businesses, extensions of certain payments and loan guarantees, and subsidies for workers and
businesses. The European Commission has advocated for greater coordination among the EU businesses. The European Commission has advocated for greater coordination among the EU
members in developing and implementing monetary and fiscal policies to address the economic members in developing and implementing monetary and fiscal policies to address the economic
fallout from the viral pandemic. Various EU and ECB officials appeared to have negotiated a fallout from the viral pandemic. Various EU and ECB officials appeared to have negotiated a
coordinated fiscal response by the Eurozone and broader EU. coordinated fiscal response by the Eurozone and broader EU.
In its July 2020 economic forecast, the European Commission forecasted that EU GDP in 2020 In its July 2020 economic forecast, the European Commission forecasted that EU GDP in 2020
would fall by 8.3%, nearly a full percentage point higher than in its May forecast, as indicated in would fall by 8.3%, nearly a full percentage point higher than in its May forecast, as indicated in
Table 9. The Commission stated that, “Given the severity of this unprecedented worldwide shock, The 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 it is now quite clear that the EU has entered the deepest economic recession in its history.” In
addition, the Commission forecasted that EU GDP would rise by 5.8% in 2021, not fast enough to addition, the Commission forecasted that EU GDP would rise by 5.8% in 2021, not fast enough to
erase all the 2020 decline, but would exhibit a distinct “V” shaped recession and recovery. erase all 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.~~212~~213 To address the crisis, the Commission To address the crisis, the Commission
argued that, “[t]he risk … is that the crisis will lead to severe distortions within the Single Market argued that, “[t]he risk … is that the crisis will 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.”~~213~~214 The The
Commission also expects European countries to emerge from the recession at different rates and Commission also expects European countries to emerge from the recession at different rates and
different paths, reflecting differences in the timing of when social distancing measures were different paths, reflecting differences in the timing of when social distancing measures were
introduced and removed, dependency on tourism, and the magnitude and effectiveness of introduced and removed, dependency on tourism, and the magnitude and effectiveness of
economic policies. The Commission also noted the rise in saving among EU households that it economic policies. The Commission also noted the rise in saving among EU households that it

~~210~~211 Unemployment Insurance Weekly Claims, July 23, 2020. https://www.dol.gov/ui/data.pdf. , July 23, 2020. https://www.dol.gov/ui/data.pdf.
~~211~~212 CRS Insight IN11235, CRS Insight IN11235, COVID-19: Potential Economic Effects, by Marc Labonte. , by Marc Labonte.
~~212~~213 Birnbaum, Michael, European Union Says That Pandemic Recession Will be Worst in its History, 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- 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. its-history/2020/05/06/e787a70e-8f96-11ea-9322-a29e75effc93_story.html.
~~213~~214 European Economic Forecast Summer 2020, European Commission, July 8, 2020. , European Commission, July 8, 2020.
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argues is mostly involuntary, rather than precautionary and would revert to pre-crisis levels once argues is mostly involuntary, rather than precautionary and would revert to pre-crisis levels once
consumers felt confident to resume their regular spending patterns. consumers felt confident to resume their regular spending patterns.
Table 9. European Commission Economic Forecast
Percentage change, real GDP Percentage change, real GDP
Spring Forecast
Summer Forecast

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
1.5 1.5
-8.3 -8.3
5.8 5.8
Euro area Euro area
1.2 1.2
-7.7 -7.7
6.3 6.3
1.3 1.3
-8.7 -8.7
6.1 6.1
Belgium Belgium
1.4 1.4
-7.2 -7.2
6.7 6.7
1.4 1.4
-8.8 -8.8
6.5 6.5
Germany Germany
0.6 0.6
-6.5 -6.5
5.9 5.9
0.6 0.6
-6.3 -6.3
5.3 5.3
Ireland Ireland
5.5 5.5
-7.9 -7.9
6.1 6.1
5.5 5.5
-8.5 -8.5
6.3 6.3
Greece Greece
1.9 1.9
-9.7 -9.7
7.9 7.9
1.9 1.9
-9.0 -9.0
6.0 6.0
Spain Spain
2.0 2.0
-9.4 -9.4
7.0 7.0
2.0 2.0
-10.9 -10.9
7.1 7.1
France France
1.3 1.3
-8.2 -8.2
7.4 7.4
1.5 1.5
-10.6 -10.6
7.6 7.6
Italy Italy
0.3 0.3
-9.5 -9.5
6.5 6.5
0.3 0.3
-11.2 -11.2
6.1 6.1
Luxembourg Luxembourg
2.3 2.3
-5.4 -5.4
5.7 5.7
2.3 2.3
-6.2 -6.2
5.4 5.4
Malta Malta
4.4 4.4
-5.8 -5.8
6.0 6.0
4.7 4.7
-6.0 -6.0
6.3 6.3
Netherlands Netherlands
1.8 1.8
-6.8 -6.8
5.0 5.0
1.7 1.7
-6.8 -6.8
4.6 4.6
Austria Austria
1.6 1.6
-5.5 -5.5
5.0 5.0
1.6 1.6
-7.1 -7.1
5.6 5.6
Portugal Portugal
2.2 2.2
-6.8 -6.8
5.8 5.8
2.2 2.2
-9.8 -9.8
6.0 6.0
Finland Finland
1.0 1.0
-6.3 -6.3
3.7 3.7
1.1 1.1
-6.3 -6.3
2.8 2.8
Denmark Denmark
2.4 2.4
-5.9 -5.9
5.1 5.1
2.4 2.4
-5.2 -5.2
4.3 4.3
Sweden Sweden
1.2 1.2
-6.1 -6.1
4.3 4.3
1.2 1.2
-5.3 -5.3
3.1 3.1
United Kingdom United Kingdom
1.4 1.4
-8.3 -8.3
6.0 6.0
1.5 1.5
-9.7 -9.7
6.0 6.0
Source: European Economic Forecast Summer 2020, European Commission, July 8. 2020, European Economic Forecast Summer 2020, European Commission, July 8. 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 falling farther then they had during the height of the financial crisis in Europe, with some indexes falling farther then they had during the height of the financial crisis
and others indicating that Europe may well experience a deep economic recession in 2020.and others indicating that Europe may well experience a deep economic recession in 2020.~~214~~215
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 all but essential travel across borders, 2020. EU countries have issued travel warnings, banning all but essential travel across borders,
raising concerns that even much-needed medical supplies could stall at borders affected by traffic raising concerns that even much-needed medical supplies could stall at borders affected by traffic
backups.backups.~~215~~216 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
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.~~216~~217

~~214~~215 Arnold, Martin and Valentina Romei, “Business Activity Crashes to Record Low in Eurozone,” 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. March 24, 2020. https://www.ft.com/content/f5ebabd4-6dad-11ea-89df-41bea055720b.
~~215~~216 Birnbaum, Michael, “Europe Is Closing Borders amid Covid-19 Outbreak. They May be Hard to Reopen,” 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/, March 17, 2020. https://www.washingtonpost.com/world/europe/europe-closing-borders-Covid-19/
2020/03/17/131a6f56-67c8-11ea-b199-3a9799c54512_story.html. 2020/03/17/131a6f56-67c8-11ea-b199-3a9799c54512_story.html.
~~216~~217 Evans, Judith Evans, Emiko Terazono, and Leila Abboud, “Farmers Warn over Food Supply with Harvest Workers Evans, Judith Evans, Emiko Terazono, and Leila Abboud, “Farmers Warn over Food Supply with Harvest Workers
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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 allow countries more flexibility in using fiscal policies. Also, the European government debt to allow countries more flexibility 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.~~217~~218 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.~~218~~219 ECB President-designate Christine Lagarde called on EU leaders to take more urgent ECB President-designate Christine Lagarde called 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 billion investment fund to address European Commission indicated that it was creating a $30 billion investment fund to address
COVID-19 issues.COVID-19 issues.~~219~~220 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; (2) extend targeted longer-term refinance operations (TLTRO) to liquidity; (2) extend targeted longer-term refinance operations (TLTRO) to
provide loans at below-market rates to businesses, especially small and medium-provide loans at below-market rates to businesses, especially small 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
billion (about $130 billion) for the Bank’s asset purchase program to provide billion (about $130 billion) for the Bank’s asset purchase program to provide
liquidity to firms that was in addition to €20 billion a month it previously had liquidity to firms that was in addition to €20 billion a month it previously had
committed to purchasing.committed to purchasing.~~220~~221
 On March 13, 2020, financial market regulators in the UK, Italy, and Spain  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 intervened in stock and bond markets to stabilize prices after historic swings in
indexes on March 12, 2020.indexes on March 12, 2020.~~221~~222 In addition, the ECB announced that it would do In addition, the ECB announced that it would do
more to assist financial markets in distress, including altering self-imposed rules more to assist financial markets in distress, including altering self-imposed rules
on purchases of sovereign debt.on purchases of sovereign debt.~~222~~223
 Germany’s Economic Minister announced on March 13, 2020, that Germany  Germany’s Economic Minister announced on March 13, 2020, that Germany
would provide unlimited loans to businesses experiencing negative economic would provide unlimited loans to businesses experiencing negative economic

Shut Out,” 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.
~~217~~218 Dombey, Daniel Dombey, Guy Chazan, and Jim Brunsden, “Nine Eurozone Countries Issue Call for Dombey, Daniel Dombey, Guy Chazan, and Jim Brunsden, “Nine Eurozone Countries Issue 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.
~~218~~219 “US Fed’s Covid-19 Rate Cut Is First Move in a Dance with Markets,” “US Fed’s 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, Sam Jones, and https://www.ft.com/content/83c07594-5e3a-11ea-b0ab-339c2307bcd4. Giles, Chris, Martin Arnold, Sam Jones, and
Jamie Smyth,Jamie Smyth, “Finance Ministers ‘Ready to Take Action’ on Covid-19,” Finance Ministers ‘Ready to Take Action’ on Covid-19,” Financial 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.
~~219~~220 Arnold, Martin and Guy Chazan, “Christine Lagarde Calls on EU Leaders to Ramp up Covid-19 Response,” Arnold, Martin and Guy Chazan, “Christine Lagarde Calls on EU Leaders to Ramp up Covid-19 Response,”
Financial 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.
~~220~~221 Monetary Policy Decisions, The European Central Bank, March 12, 2020. https://www.ecb.europa.eu/press/pr/date/, The European Central Bank, March 12, 2020. https://www.ecb.europa.eu/press/pr/date/
2020/html/ecb.mp200312~8d3aec3ff2.en.htm. 2020/html/ecb.mp200312~8d3aec3ff2.en.htm.
~~221~~222 Stafford, Philip and Adam Samson, “European Regulators Intervene in Bid to Stabilize Stock and Bond Prices,” 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. , March 13, 2020. https://www.ft.com/content/77f57d4c-6509-11ea-a6cd-df28cc3c6a68.
~~222~~223 Arnold, Martin, “ECB Enters Damage-Limitation Mode with Pledge of More Action,” Arnold, Martin, “ECB Enters Damage-Limitation Mode with Pledge 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.
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activity (initially providing $555 billion), tax breaks for businesses, activity (initially providing $555 billion), tax breaks for businesses,~~223~~224 and export and export
credits and guarantees.credits and guarantees.~~224~~225
 On March 18, the ECB indicated that it would: create a €750 billion (about $800  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 billion) Pandemic Emergency Purchase Program to purchase public and private
securities; expand the securities it will purchase to include nonfinancial securities; expand the securities it will purchase to include nonfinancial
commercial paper; and ease some collateral standards.commercial paper; and ease some collateral standards.~~225~~226 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 all constraints that applied to previous asset-purchase programs, loosened almost all 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 up to €3 trillion in liquidity  The ECB also indicated that it would make available up to €3 trillion in liquidity
through refinancing operations. through refinancing operations.~~226~~227 Britain ($400 billion) and France ($50 billion) Britain ($400 billion) and France ($50 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.~~227~~228
 On March 23, 2020, Germany announced that it would adopt a €750 billion (over  On March 23, 2020, Germany announced that it would adopt a €750 billion (over
$800 billion) package in economic stimulus funding. $800 billion) package in economic stimulus funding.
 On April 15, Eurozone finance ministers announced a €500 billion (about $550  On April 15, Eurozone finance ministers announced a €500 billion (about $550
billion) emergency spending package to support governments, businesses, and billion) emergency spending package to support governments, businesses, and
workers and will provide funds to the European Stability Mechanism, the workers and will provide funds to the European Stability Mechanism, the
European Investment Bank, and for unemployment insurance.European Investment Bank, and for unemployment insurance.~~228~~229
On May 5, 2020, Germany’s Constitutional Court issued a ruling challenging the legality of a 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 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 (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 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 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 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 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 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 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 acquire up to €750 billion (about $820 billion) in private and public sector securities to address
the economic effects of the pandemic crisis. the economic effects of the pandemic crisis.

~~223~~224 Loveday, Morris and Louisa Beck, “Germany Announces ‘Bazooka’ Economic Plan to Mitigate Covid-19 Hit,” Loveday, Morris and Louisa 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/.
~~224~~225 Arnold, Martin, Guy Chazan, Victor Mallet, Miles Johnson, and Daniel Dombey, “How European Economies Are Arnold, Martin, Guy Chazan, Victor Mallet, Miles Johnson, and Daniel Dombey, “How European Economies Are
Trying to Mitigate the Covid-19 Shock,” Trying to Mitigate the Covid-19 Shock,” Financial 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.
~~225~~226 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.
~~226~~227 Lagarde, Christine, “The ECB Will Do Everything Necessary to Counter the Virus,” Lagarde, Christine, “The 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.
~~227~~228 “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.
~~228~~229 Fleming, Sam and Mehreen Khan, “Eurozone Countries Strike Emergency Deal on Coronavirus Rescue,” Fleming, Sam and Mehreen Khan, “Eurozone Countries Strike Emergency Deal on Coronavirus Rescue,” Financial
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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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 financially strapped ECB launched four asset purchase programs in 2014 to provide assistance to financially strapped
Eurozone governments and to sustain financial liquidity in Eurozone banks. Those programs Eurozone governments and to sustain financial liquidity 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 trillion (about $2.5 trillion) with in November 2019. As of May 8, the PSPP program held €2.2 trillion (about $2.5 trillion) with
another €600 billion (about $700 billion) held under other asset purchase programs.another €600 billion (about $700 billion) held under other asset purchase programs.~~229~~230 Various Various
groups in Germany challenged the legality of the ECB bond-buying programs before the German groups in Germany challenged 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 challenged the ECB and the European Court of Justice ruling as “incomprehensible,” and directly challenged 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 challenged the members increased risks for national governments that back up the ECB, and it challenged the
ECB’s strategy for reducing its holdings of sovereign debt. By the end of June, however, the ECB’s strategy for reducing its holdings of sovereign debt. By the end of June, however, the
standoff appeared to be reaching a resolution. The ECB reportedly agreed to provide the German standoff appeared to be reaching a resolution. The ECB reportedly agreed to provide the German
court with the Bank’s analysis of the economic and fiscal policy impact of the ECB bond-buying court with the Bank’s analysis of the economic and fiscal policy impact of the ECB bond-buying
programs. The ECB reportedly will also provide the unpublished full minutes of the central programs. The ECB reportedly will also provide the unpublished full minutes of the central
bank’s governing council monetary policy meetings, including the ECB’s discussions in March bank’s governing council monetary policy meetings, including the ECB’s discussions in March
2015 of its purchases of sovereign bonds.2015 of its purchases of sovereign bonds.~~230~~231
On May 18, German Chancellor Angela Merkel and French President Emmanuel Macron On May 18, German Chancellor Angela Merkel and French President Emmanuel Macron
proposed a €500 billion (about $620 billion) EU recovery fund in an effort to gain a coordinated proposed a €500 billion (about $620 billion) EU recovery fund in an effort to gain a coordinated
EU fiscal response to the pandemic.EU fiscal response to the pandemic.~~231~~232 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 ECB projected a drop in the EU economy On May 27, ECB President Lagarde indicated that the ECB projected a drop in the EU 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
called for a €500 billion (about $620 billion) stimulus package.called for a €500 billion (about $620 billion) stimulus package.~~232~~233 In addition, European In addition, European
Commission President Ursula von der Leyen proposed a €750 billion (about $820 billion) EU Commission President Ursula von der Leyen proposed a €750 billion (about $820 billion) EU
recovery fund, termed the “Next Generation Fund,” that would provide €500 billion ($550 recovery fund, termed the “Next Generation Fund,” that would provide €500 billion ($550
billion) in grants in a Recovery and Resilience Facility and €250 billion ($270 billion) in loans. billion) in grants in a Recovery and Resilience Facility and €250 billion ($270 billion) in loans.

~~229~~230 European Central Bank. https://www.ecb.europa.eu/mopo/implement/pepp/html/pepp-qa.en.html. European Central Bank. https://www.ecb.europa.eu/mopo/implement/pepp/html/pepp-qa.en.html.
~~230~~231 Arnold, Martin, Berlin and ECB Signal End to Legal Impasse Over Bond-Buying, Arnold, Martin, Berlin and ECB Signal End to Legal Impasse Over Bond-Buying, Financial Times, June 25, 2020. , June 25, 2020.
https://www.ft.com/content/5f000a25-3d54-4610-8579-cab9b21759ee. https://www.ft.com/content/5f000a25-3d54-4610-8579-cab9b21759ee.
~~231~~232 Fleming, Sam, Victor Mallet, and Guy Chazan, Germany and France Unite in Call for €500 Billion Europe Fleming, Sam, Victor Mallet, and Guy Chazan, Germany and France Unite in Call for €500 Billion Europe
Recovery Fund, Recovery Fund, Financial 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.
~~232~~233 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.
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The proposal would take the unprecedented step of allowing the EU to issues bonds The proposal would take the unprecedented step of allowing the EU to issues bonds
independently from the other EU central banks.independently from the other EU central banks.~~233~~234 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:
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
building the digital economy.building the digital economy.~~234~~235 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 €1.1trillion for 2021 to 2027. Framework (MFF), of €1.1trillion for 2021 to 2027.
On May 28, several key political groups within the EU Parliament voiced their support for new On May 28, several key political groups within the EU Parliament voiced their support for new
rules that would allow the EU to retaliate in such trade areas as services and intellectual property rules that would allow the EU to retaliate in such trade areas as services and intellectual 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 appellate body.because the United States had blocked the appointment of judges to the WTO’s appellate body.~~235~~236
European leaders, reportedly interested in finalizing an investment agreement with China, European leaders, reportedly interested in finalizing 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 limit Hong Kong’s autonomy granted by the “one country two systems” positioning itself to limit 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.~~236~~237
The European Central Bank announced on June 4 that it would double to $1.5 trillion its 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 Pandemic Emergency Purchase Program to stimulate the European economy; it also extended the
program to at least June 2021.program to at least June 2021.~~237~~238 At the same time, the German government announced a package 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 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 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 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 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 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 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.institutions and nonprofit groups and incentives for purchases of electric vehicles.~~238~~239
On June 25, Germany’s Minister for Economic Affairs and Energy announced that the German On June 25, Germany’s Minister for Economic Affairs and Energy announced that the German
government would provide more than €300 million (about $330 million), to acquire a 25% stake government would provide more than €300 million (about $330 million), to acquire a 25% stake
in a privately owned German drug company that is conducting trials on a possible COVID-19 in a privately owned German drug company that is conducting trials on a possible COVID-19
vaccine. Reportedly, the U.S. Government had attempted to acquire part of the company to secure vaccine. Reportedly, the U.S. Government had attempted to acquire part of the company to secure
supplies of a potential vaccine. Germany has in place legal restrictions on foreign investments in supplies of a potential vaccine. Germany has in place legal restrictions on foreign investments in
critical industries such as energy and telecoms, but the German Parliament amended Germany’s critical industries such as energy and telecoms, but the German Parliament amended Germany’s

~~233~~234 Birnbaum, Michael, and Loveday Morris, E.U. Proposes $825 Billion Coronavirus Rescue Plan Giving Brussels Birnbaum, Michael, and Loveday Morris, E.U. Proposes $825 Billion Coronavirus Rescue Plan Giving Brussels
Power to Raise Money for First Time, Power to Raise Money for First Time, The Washington Post, May 27, 2020. https://www.washingtonpost.com/world/ May 27, 2020. https://www.washingtonpost.com/world/
europe/angela-merkel-economic-rescue/2020/05/27/9d21b998-9f7c-11ea-be06-af5514ee0385_story.html. europe/angela-merkel-economic-rescue/2020/05/27/9d21b998-9f7c-11ea-be06-af5514ee0385_story.html.
~~234~~235 Brunsden, Jim and Sam Fleming, How Would Ursula von der Leyen’s Coronavirus Recovery Fund Work?, Brunsden, Jim and Sam Fleming, How Would Ursula von der Leyen’s Coronavirus Recovery Fund Work?,
Financial 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.
~~235~~236 Vela, Jakob Hanke, Trade Bazooka Gets Backing From Main Political Groups in EU Parliament, Vela, Jakob Hanke, Trade Bazooka Gets Backing From Main Political Groups in EU Parliament, Politico Pro, May , May
28, 2020; 28, 2020; Draft Report, 2019/10273(COD), European Parliament, Committee on International Trade, May 6, 2020. , 2019/10273(COD), European Parliament, Committee on International Trade, May 6, 2020.
~~236~~237 Lau, Stuart Lau, Jakob Hanke Vela, Jacopo Barigazzi, and Finbarr Bermingham, EU Won't Follow Trump Into a Lau, Stuart Lau, Jakob Hanke Vela, Jacopo Barigazzi, and Finbarr Bermingham, EU Won't Follow Trump Into a
Trade War Over Hong Kong, Politico Pro, May 28, 2020. Trade War Over Hong Kong, Politico Pro, May 28, 2020.
~~237~~238 Arnold, Martin, ECB Boosts Bond-Buying Stimulus Package by €600, Arnold, Martin, ECB Boosts Bond-Buying Stimulus Package by €600, Financial Times, June 4, 2020. , June 4, 2020.
https://www.ft.com/content/c59ab92d-e614-4284-a028-46ee3bcf92f9. https://www.ft.com/content/c59ab92d-e614-4284-a028-46ee3bcf92f9.
~~238~~239 Ewing, Jack, and Melissa Eddy, ‘Europe Finally Got the Message’: Leaders Act Together on Message, 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?, June 4, 2020. https://www.nytimes.com/2020/06/04/business/europe-coronavirus-economic-support.html?
action=click&module=Top%20Stories&pgtype=Homepage. action=click&module=Top%20Stories&pgtype=Homepage.
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Foreign Trade Act, set to become law in 2020, that broadens the scope of transactions that must Foreign Trade Act, set to become law in 2020, that broadens the scope of transactions that must
be approved by the Federal government to include “critical” technologies, including robotics, be approved by the Federal government to include “critical” technologies, including robotics,
biotech, and quantum computing.biotech, and quantum computing.~~239~~240
On July 17, the European Commission met to approve the proposed €750 billion support fund to On July 17, the European Commission met to approve the proposed €750 billion support fund to
assist European countries address the economic effects of the pandemic. Initially, the Commission assist European countries address the economic effects of the pandemic. Initially, the Commission
was unable to agree on various aspects of the program, but talks continued over the weekend and was unable to agree on various aspects of the program, but talks continued over the weekend and
resumed on July 20. European leaders announced on July 21 they had approved a €750 billion resumed on July 20. European leaders announced on July 21 they had approved a €750 billion
(about $859 billion) pandemic relief package and a multi-year EU budget, referred to as the (about $859 billion) pandemic relief package and a multi-year EU budget, referred to as the
Multiannual Financial Framework (MFF), with a combined value of over €2 trillion. The Multiannual Financial Framework (MFF), with a combined value of over €2 trillion. The
pandemic plan is aimed at funding post-pandemic economic recovery with the European pandemic plan is aimed at funding post-pandemic economic recovery with the European
Commission set to borrow an unprecedented amount of funds on European capital markets.Commission set to borrow an unprecedented amount of funds on European capital markets.~~240~~241
The €750 billion relief fund reportedly includes a Recovery and Resilience Facility of €672.5 The €750 billion relief fund reportedly includes a Recovery and Resilience Facility of €672.5
billion, which includes €360 billion in loans and €312.5 billion in grants and half a dozen other billion, which includes €360 billion in loans and €312.5 billion in grants and half a dozen other
initiatives to assist economically weakened member states. The relief fund was coupled with initiatives to assist economically weakened member states. The relief fund was coupled with
rebates on EU budget contributions for so-called “frugal” states, or EU members with stronger rebates on EU budget contributions for so-called “frugal” states, or EU members with stronger
fiscal balances. Austria, the Netherlands, Denmark, and Sweden reportedly will receive such fiscal balances. Austria, the Netherlands, Denmark, and Sweden reportedly will receive such
budget rebates.budget rebates.~~241~~242
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) forecasted in May expected to limit the damage to the UK economy. The Bank of England (BOE) forecasted in May
2020 that the UK economy would contract by 30% in the first half of 2020, but then rebound 2020 that the UK 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 Small 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 and Medium-sized Enterprises (TFSME) that provides banks with over $110
billion for loans at low interest rates; a lowering of banks’ countercyclical capital 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 billion of bank buffer from 1% to zero, which is estimated to support over $200 billion of bank
lending to businesses; and a freeze in banks’ dividend payments.lending to businesses; and a freeze in banks’ dividend payments.~~242~~243
 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.

~~239~~240 Miller, Joe, Germany Flexes its Muscles on Foreign Investment, Miller, Joe, Germany Flexes its Muscles on Foreign Investment, Financial Times, June 25, 2020. , June 25, 2020.
https://www.ft.com/content/54f92ca5-5380-466b-95f8-3e98b40ebc82. https://www.ft.com/content/54f92ca5-5380-466b-95f8-3e98b40ebc82.
~~240~~241 Special Meeting of the European Council-Conclusions, EUCP 10/20, July 21, 2020. Special Meeting of the European Council-Conclusions, EUCP 10/20, July 21, 2020.
~~241~~242 Fleming, Sam, Mehreen Khan and Jim Brunsden, EU Leaders Strike Deal on €750bn Recovery Fund After Fleming, Sam, Mehreen Khan and Jim Brunsden, EU Leaders Strike Deal on €750bn Recovery Fund After
Marathon Summit, Marathon Summit, Financial Times, July 21, 2020. https://www.ft.com/content/713be467-ed19-4663-95ff-, July 21, 2020. https://www.ft.com/content/713be467-ed19-4663-95ff-
66f775af55cc. 66f775af55cc.
~~242~~243 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.
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 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 billion to a total of £645 billion increased the stock of asset purchases by £200 billion to a total of £645 billion
financed by issuing UK government bonds and some additional nonfinancial financed by issuing UK government bonds and some additional nonfinancial
investment-grade corporate bonds.investment-grade corporate bonds.~~243~~244
 On March 20, the BOE participated in an internationally coordinated central bank  On March 20, the BOE participated in an internationally coordinated central bank
expansion of liquidity through U.S. standing dollar liquidity swap line expansion of liquidity through U.S. standing dollar liquidity 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 6, announced the activation of the TFSME ahead of schedule.  On April 6, announced the activation of the TFSME ahead of schedule.
 On April 23, the Bank of England indicated it would quadruple its borrowing  On April 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.~~244~~245
In terms of fiscal policy, UK Chancellor of the Exchequer Rishi Sunak proposed a national In terms of fiscal policy, UK Chancellor of the Exchequer Rishi Sunak proposed a national
budget on March 11, 2020, that included nearly $3.5 billion in fiscal spending to counter adverse budget on March 11, 2020, that included nearly $3.5 billion in fiscal spending to counter adverse
economic effects of the pandemic and increased in statutory sick leave by about $2.5 billion in economic effects of the pandemic and increased in statutory sick leave by about $2.5 billion in
funds to small and medium businesses to provide up to 14 days of sick leave for affected funds to small 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 billion in 2020.economy could rise to about $60 billion in 2020.~~245~~246 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 all pubs, cafés, restaurants, theatres, cinemas, nightclubs, gyms and leisure centers announced that all pubs, cafés, restaurants, theatres, cinemas, nightclubs, gyms and leisure centers
would be closed.would be closed.~~246~~247 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 billion in emergency funds to the NHS, $600 million hardship National Health Service (NHS), $6 billion in emergency funds to the NHS, $600 million hardship
fund to assist vulnerable people, and tax cuts and tax holidays for small businesses in certain fund to assist vulnerable people, and tax cuts and tax holidays for small businesses in certain
affected sectors.affected sectors.~~247~~248
On July 8, Chancellor Sunak proposed additional fiscal measures to support the UK economy. On July 8, Chancellor Sunak proposed additional fiscal measures to support the UK economy.~~248~~249
The measures include raising threshold tax levels on home purchases, reducing taxes for the The measures include raising threshold tax levels on home purchases, reducing taxes for the
hospitality industry, and a “job retention bonus” of £1.000 (around $1,200) per worker to hospitality industry, and a “job retention bonus” of £1.000 (around $1,200) per worker to
companies that bring employees out of furlough, estimated at around 9 million workers, and a companies that bring employees out of furlough, estimated at around 9 million workers, and a
subsidy of £2.000 for firms that hire new apprentices. In addition, the proposed plan includes a subsidy of £2.000 for firms that hire new apprentices. In addition, the proposed plan includes a

~~243~~244 Johnson, Miles, Chris Giles, Martin Arnold, and James Politi, “Italy’s PM Urges Brussels to Unleash €500bn Johnson, Miles, Chris Giles, Martin Arnold, and James Politi, “Italy’s PM Urges Brussels to Unleash €500bn
Rescue Fund,” Rescue Fund,” Financial 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.
~~244~~245 Giles, Chris, and Tommy Stubbington, UK Treasury to Quadruple Borrowing to £180bn Over Next Quarter, Giles, Chris, and Tommy Stubbington, UK Treasury to Quadruple Borrowing to £180bn Over Next Quarter,
Financial 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.
~~245~~246 Parker, George, Chris Giles, and Sebastian Payne, “Sunak Turns on Financial Firepower to Help Workers,” Parker, George, Chris Giles, and Sebastian Payne, “Sunak Turns on Financial Firepower to Help Workers,”
Financial 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.
~~246~~247 Ibid. Ibid.
~~247~~248 Payne, Sebastian and Chris Giles, “Budget 2020: Sunak Unveils £30bn Stimulus to Counter UK Covid-19 Shock,” 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.
~~248~~249 Pickard, Jim and Chris Giles, Sunak’s Summer Statement: UK Government to Pay Companies to Bring Workers Pickard, Jim and Chris Giles, Sunak’s Summer Statement: UK Government to Pay Companies to Bring Workers
Back From Furlough, Back From Furlough, Financial Times, July 7, 2020. https://www.ft.com/content/ad1688ee-3d8d-4e52-9b16-, July 7, 2020. https://www.ft.com/content/ad1688ee-3d8d-4e52-9b16-
a3632eed8be9. a3632eed8be9.
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50% discount on meals and non-alcoholic drinks eaten at restaurants and cafes during August, 50% discount on meals and non-alcoholic drinks eaten at restaurants and cafes during August,
with some restrictions. with some restrictions.
Japan
The Bank of Japan, with already-low interest rates, injected $4.6 billion in liquidity into Japanese The Bank of Japan, with already-low interest rates, injected $4.6 billion in liquidity 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.~~249~~250 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 billion, roughly equivalent to 10% of Japan’s annual gross domestic package of about $515 billion, 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.~~250~~251
The Japanese Cabinet proposed a second supplemental appropriation measure that includes $296 The Japanese Cabinet proposed a second supplemental appropriation measure that includes $296
billion in spending and a total value of about $1.1 trillion in loans and guarantees, funded through billion in spending and a total value of about $1.1 trillion 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 small and medium-sized businesses through the Regional Economy Japan and funds to small and medium-sized businesses through the Regional Economy
Vitalization Corporation of Japan, payments to assist furloughed workers, and a reserve fund to Vitalization 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.~~251~~252
On June 17, the Bank of Japan (BOJ) announced that it was maintaining its low interest rates of - 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 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.would continue to purchase exchange traded funds at the rate of $12 trillion a year.~~252~~253 The The
COVID-19 lending facility assists banks in providing zero interest rate loans to businesses. In a 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 separate program, the BOJ is providing about $110 trillion to buy commercial paper and
corporate bonds. corporate bonds.
China
According to a recent CRS In Focus,According to a recent CRS In Focus,~~253~~254 China’s economic growth could go negative in the first China’s economic growth could go negative in the first
quarter of 2020 and fall below 5% for the year, with more serious effects if the outbreak quarter of 2020 and fall below 5% for the year, with more serious effects if the outbreak
continues. In early February, China’s central bank pumped $57 billion into the banking system, continues. In early February, China’s central bank pumped $57 billion 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 stronger than its official close rate to keep it stable. On March 13, 2020, The People’s Bank of

~~249~~250 Harding, Robin and Hudson Lockett, “BoJ Spurs Asia Markets Rebound with Vow to Fight Covid-19,” Harding, Robin and Hudson Lockett, “BoJ Spurs Asia Markets Rebound with Vow to Fight Covid-19,” Financial
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.
~~250~~251 Harding, Robin, Bank of Japan Steps up Coronavirus Stimulus With Bond-buying Pledge, Harding, Robin, Bank of Japan Steps up Coronavirus Stimulus With Bond-buying 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.
~~251~~252 Harding, Robin, Japan’s Cabinet Approves Extra $1.1 Trillion Budget to Counter Recession, Harding, Robin, Japan’s Cabinet Approves Extra $1.1 Trillion 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.
~~252~~253 Harding, Bank of Japan Pledges $1 trillion in Coronavirus Lending. Harding, Bank of Japan Pledges $1 trillion in Coronavirus Lending.
~~253~~254 For additional information about China’s response, see CRS In Focus IF11434, For additional information about China’s response, see CRS In Focus IF11434, COVID-19: U.S.-China Economic
Considerations, by Karen M. Sutter and Michael D. Sutherland. , by Karen M. Sutter and Michael D. Sutherland.
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China announced that it would provide $78.8 billion in funding, primarily to small businesses, by China announced that it would provide $78.8 billion in funding, primarily to small businesses, by
reducing bank’s reserve requirements.reducing bank’s reserve requirements.~~254~~255
The International Monetary Fund (IMF) is providing funding to poor and emerging market The International Monetary Fund (IMF) is providing funding to poor and emerging market
economies that are short on financial resources.economies that are short on financial resources.~~255~~256 If the economic effects of the virus persist, 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 ~~Response256~~Response257
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,~~257~~258 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 trillion—in response to the pandemic and resulting economic capacity—approximately $1 trillion—in response to the pandemic and resulting economic
crises.crises.~~258~~259 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.~~259~~260
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 low-income country trust fund at the IMF, to cover six months of debt payments owed by 29 low-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.~~260~~261 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 billion) access to IMF emergency requests for emergency financing and doubled (to about $100 billion) access to IMF emergency
assistance. assistance.
For FY2021, the Administration had requested authorization for about $38 billion for a 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, supplemental fund at the IMF (the New Arrangements to Borrow [NAB]). In March 2020,

~~254~~255 Weinland, Don, “China’s Central Bank Launches $79bn Stimulus for Virus-Hit Companies,” 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. March 13, 2020. https://www.ft.com/content/deb56f86-6515-11ea-b3f3-fe4680ea68b5.
~~255~~256 Politi, James, “IMF Sets Aside $50bn for Covid-19-Hit Countries,” Politi, James, “IMF Sets Aside $50bn for Covid-19-Hit Countries,” Financial Times, March 4, 2020, , March 4, 2020,
https://www.ft.com/content/83c07594-5e3a-11ea-b0ab-339c2307bcd4. https://www.ft.com/content/83c07594-5e3a-11ea-b0ab-339c2307bcd4.
~~256~~257 For more information, see CRS Report R46342, For more information, see CRS Report R46342, COVID-19: Role of the International Financial Institutions, by , by
Rebecca M. Nelson and Martin A. Weiss. Rebecca M. Nelson and Martin A. Weiss.
~~257~~258 Remarks by IMF Managing Director Kristalina Georgieva During the G20 Finance Ministers and Central Bank Remarks by IMF Managing Director Kristalina Georgieva During the G20 Finance Ministers and Central Bank
Governors Meeting, International Monetary Fund, April 15, 2020. Governors Meeting, International Monetary Fund, April 15, 2020.
~~258~~259 IMF Managing Director Kristalina Georgieva’s Statement Following a G20 Ministerial Call on the Coronavirus IMF Managing Director Kristalina Georgieva’s Statement Following a G20 Ministerial Call 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.
~~259~~260 IMF Lending Tracker, https://www.imf.org/en/Topics/imf-and-covid19/COVID-Lending-Tracker. IMF Lending Tracker, https://www.imf.org/en/Topics/imf-and-covid19/COVID-Lending-Tracker.
~~260~~261 “IMF Adds Liquidity Line to Strengthen COVID-19 Response,” International Monetary Fund, April 15, 2020. “IMF Adds Liquidity Line to Strengthen COVID-19 Response,” International Monetary Fund, April 15, 2020.
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Congress enacted this authorization in the Coronavirus Aid, Relief, and Economic Security Act 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 (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 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 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, gold holdings, and whether the IMF should enact policies to buffer member state reserves,
through a process called an SDR allocation. through a process called an SDR allocation.
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.~~261~~262 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 billion, in 99 countries.the process of approving, 150 COVID-19 projects, totaling $15 billion, in 99 countries.~~262~~263
Examples of approved projects include $47 million for the Democratic Republic of Congo to Examples of approved projects include $47 million 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 million for Tajikistan to expand intensive care capacity; $20 to ensure rapid case detection; $11.3 million for Tajikistan to expand intensive care capacity; $20
million for Haiti to support diagnostic testing, rapid response teams, and outbreak containment; million for Haiti to support diagnostic testing, rapid response teams, and outbreak containment;
and $1 billion for India to support screening, contract tracing, and laboratory diagnostics, procure and $1 billion 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.~~263~~264
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
billion to respond to the COVID-19 pandemic, more than double the amount it committed in billion to respond to the COVID-19 pandemic, more than double the amount it committed in
FY2019. In April 2020, the World Bank also announced its plans to establish a new multi-donor FY2019. In April 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).~~264~~265 The new fund is to complement, and augment, the The new fund is to complement, and augment, the
$160 billion of financing provided by the World Bank. $160 billion 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 smaller and more specialized multilateral in developing countries worldwide, a number of smaller and more specialized multilateral
development banks (MDBs) are also mobilizing resources in response to the COVID-19 development banks (MDBs) are also mobilizing resources in response to the COVID-19
pandemic. The United States is a member of a number of regionally focused MDBs, including the pandemic. The United States is a member of a number of regionally 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 well as the functionally focused and Development, and the Inter-American Development Bank, as well as the functionally 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 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 development banks have committed roughly $80 billion over the next 15 months to respond to

~~261~~262 Remarks by World Bank Group President David Malpass on G20 Finance Ministers Conference Call on COVID-19, Remarks by World Bank Group President David Malpass on G20 Finance Ministers Conference Call on COVID-19,
March 23, 2020. March 23, 2020.
~~262~~263 https://maps.worldbank.org/. Accessed on June 1, 2020. https://maps.worldbank.org/. Accessed on June 1, 2020.
~~263~~264 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, April 2, 2020. Support, Strengthening Developing Country Response,” Press Release, April 2, 2020.
~~264~~265 World Bank, “World Bank Group to Launch New Multi-donor Trust Fund to help Countries Prepare for Disease World Bank, “World Bank Group to Launch New Multi-donor Trust Fund to help Countries Prepare for Disease
Outbreaks,” Press Release, April 17, 2020. Outbreaks,” Press Release, April 17, 2020.
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COVID-19. COVID-19.~~265~~266 Together with the World Bank’s commitment of $160 billion, $240 billion in 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 financing is to be made available to developing countries from the MDBs during this time
period.period.~~266~~267
To support the MDB response to COVID-19, Congress accelerated authorizations requested by 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 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 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 allow them to expand their lending based on existing should pursue fiduciary reforms that would allow them to expand their lending based on existing
resources, particularly lending against donor country guarantees to the institutions (called resources, particularly lending against donor country guarantees to the institutions (called
“callable” capital). “callable” 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 fallout from the global spread of COVID-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 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.”~~267~~268 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 well as targeted “the full range” of policy instruments, including monetary and fiscal measures as well 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 well as other international organizations, to support countries worldwide as part of a Group, as well as other international organizations, to support countries worldwide as part of a
coordinated global response.coordinated global response.~~268~~269
Saudi Arabia, the 2020 chair of the G-20, called an emergency G-20 summit on March 25 to Saudi Arabia, the 2020 chair of the G-20, called an emergency G-20 summit on March 25 to
discuss a response to the pandemic.discuss a response to the pandemic.~~269~~270 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.~~270~~271 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.~~271~~272
Analysts are hopeful that the recent G-7 summit, and a G-20 summit, will mark a shift towards Analysts are hopeful that the recent G-7 summit, and a G-20 summit, will mark a shift towards
greater international cooperation at the highest (leader) levels in combatting the economic fallout greater international cooperation at the highest (leader) levels in combatting the economic fallout
from the spread of COVID-19.from the spread of COVID-19.~~272~~273 An emergency meeting of G-7 finance ministers on March 3, An emergency meeting of G-7 finance ministers on March 3,

~~265~~266 David Malpass, “Remarks to G20 Finance Ministers,” World Bank, April 15, 2020. David Malpass, “Remarks to G20 Finance Ministers,” World Bank, April 15, 2020.
~~266~~267 World Bank Group President David Malpass: Remarks to G20 Finance Ministers, April 15, 2020. World Bank Group President David Malpass: Remarks to G20 Finance Ministers, April 15, 2020.
~~267~~268 White House, G-7 Leaders’ Statement, March 16, 2020, https://www.whitehouse.gov/briefings-statements/g7- White House, G-7 Leaders’ Statement, March 16, 2020, https://www.whitehouse.gov/briefings-statements/g7-
leaders-statement/. leaders-statement/.
~~268~~269 Ibid. Ibid.
~~269~~270 “Spain Says Saudi Arabia to Cal G-20 to Meet on Covid-19 in Coming Days,” “Spain Says Saudi Arabia to Cal G-20 to Meet on Covid-19 in Coming Days,” Reuters, March 16, 2020. , March 16, 2020.
~~270~~271 The G-20 includes the G-7 countries plus Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia, The G-20 includes the G-7 countries plus Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia,
Saudi Arabia, South Africa, South Korea, Turkey, and the European Union (EU). Saudi Arabia, South Africa, South Korea, Turkey, and the European Union (EU).
~~271~~272 For more information about the G-20, see CRS Report R40977, For more information about the G-20, see CRS Report R40977, The G-20 and International Economic Cooperation:
Background and Implications for Congress, by Rebecca M. Nelson. , by Rebecca M. Nelson.
~~272~~273 See for example, Jennifer Rankin, “EU Leaders Divided on How to Protect Economies after Covid-19,” See for example, Jennifer Rankin, “EU Leaders Divided on How to Protect Economies after Covid-19,” The
Guardian, March 14, 2020. , March 14, 2020.
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2020, fell short of the aggressive and concrete coordinated action that investors and economists 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.had been hoping for, and U.S. and European stock markets fell after the meeting.~~273~~274 More More
generally, governments have been divided over the appropriate response and in some cases have 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 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 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-needed to address the economic fallout from COVID-19, but several concerns loom about the G-
20’s ability to deliver.20’s ability to deliver.~~274~~275 Their concerns focus on the Trump Administration’s prioritization of an 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 development banks, Meanwhile, international organizations including the IMF and multilateral development banks,
have tried to forge ahead with economic support given their current resources. Additionally, the 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 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.~~275~~276 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 available capital and while noting that many FSB members have already taken action to release available capital and
liquidity buffers. liquidity 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 still was estimated to be positive. Countries highly dependent on trade—2020 was tepid, but still 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.~~276~~277 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 spillover broad range of countries. The OECD notes that production declines in China have 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.~~277~~278 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 Vietnam could experience an economic recession in Philippines, Indonesia, Malaysia, and Vietnam could experience an economic recession in
2020.2020.~~278~~279
In early January 2020, before the COVID-19 outbreak, economic growth in developing 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 economies as a whole was projected by the International Monetary Fund (IMF) to be slightly

~~273~~274 Jack Ewing and Jeanna Smialek, “Economic Powers Vow to Fight Crisis,” Jack Ewing and Jeanna Smialek, “Economic Powers Vow to Fight Crisis,” New York Times, March 3, 2020. , March 3, 2020.
~~274~~275 Matthew Goodman and Mark Sobel, “Time to Pull the G-20 Fire Bell,” Center for Strategic and International Matthew Goodman and Mark Sobel, “Time to Pull the G-20 Fire Bell,” Center for Strategic and International
Studies, March 18, 2020. Studies, March 18, 2020.
~~275~~276 “FSB Coordinates Financial Sector Work to Buttress the Economy in Response to Covid-19,” Financial Stability “FSB 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.
~~276~~277 OECD Interim Economic Assessment, p. 7. p. 7.
~~277~~278 Ibid., Ibid., p. 5. p. 5.
~~278~~279 Arnold, Martin Arnold and Valentina Romei, “European Factory Output Plummets as Covid-19 Shutdown Bites,” Arnold, Martin Arnold and Valentina Romei, “European Factory Output Plummets as Covid-19 Shutdown Bites,”
Financial Times, April 1, 2020. https://www.ft.com/content/8646c0ee-8fba-4e4c-a047-cf445ff41cf6. April 1, 2020. https://www.ft.com/content/8646c0ee-8fba-4e4c-a047-cf445ff41cf6.
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more positive than in 2019. This outlook was based on progress being made in U.S.-China trade 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. 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.Growth rates in Latin America and the Middle East were also projected to be positive in 2020.~~279~~280
These projections likely will be revised downward due to the slowdown in global trade associated 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 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 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 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 all of between Saudi Arabia and Russia are hitting developing and emerging economies hard. Not all 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 substantially higher than recent market events (crisis and substantially higher than recent market events (Figure 13).).~~280~~281
Figure 1314. Capital Flows to Emerging Markets in Global Shocks

Source: Original graphic and data from International Institute for Finance using data from Haver. Edited by CRS Original graphic and data from 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 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 economic slowdown is especially hard on oil and gas exporters, some of whose currencies are at
record lows (record lows (Figure 14). Oil importers, such as South Africa and Turkey, have also been hit hard; ). Oil importers, such as South Africa and Turkey, have also been hit hard;

~~279~~280 Tentative Stabilization, Sluggish Recovery? World Economic Outlook Update, January 20, 2020, The International , January 20, 2020, The International
Monetary Fund. https://www.imf.org/en/Publications/WEO/Issues/2020/01/20/weo-update-january2020. Monetary Fund. https://www.imf.org/en/Publications/WEO/Issues/2020/01/20/weo-update-january2020.
~~280~~281 These include concerns in 2015 over China’s renminbi devaluation and the so-called “Taper Tantrum” in 2013 when These include concerns in 2015 over China’s renminbi devaluation and the so-called “Taper Tantrum” in 2013 when
the Federal Reserve announced that it would slow down the pace of its post global financial crisis asset purchases. the Federal Reserve announced that it would slow down the pace of its post global financial crisis asset purchases.
Sergei Lanau and Jonathan Fortun, “Economic Views—The COVID-19 Shock to EM Flows,” Institute for Sergei Lanau and Jonathan Fortun, “Economic Views—The COVID-19 Shock to EM Flows,” Institute for
International Finance, March 17, 2020. International Finance, March 17, 2020.
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South Africa’s rand has fallen 18% South Africa’s rand has fallen 18%~~281~~282 against the dollar since the beginning of 2020 and the against the dollar since the beginning of 2020 and the
Turkish lira has lost 8.5%.Turkish lira has lost 8.5%.~~282~~283 Some economists are concerned that the depreciation in currencies Some economists are concerned that the depreciation in currencies
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.~~283~~284
Depending on individual levels of foreign exchange reserves and the duration of the capital flow Depending on individual 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
will likely need to make some form of current account adjustment (reduce spending, raise taxes, will likely 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.~~284~~285 (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.~~285~~286) )
Figure 1415. 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 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 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 have acted unilaterally, particularly when closing borders and imposing export restrictions on

~~281~~282 Paul Wallace, “Here’s How the Oil Crash is Hitting Emerging Market Currencies,” Paul Wallace, “Here’s How the Oil Crash is Hitting Emerging Market Currencies,” Bloomberg, March 17, 2020, , March 17, 2020,
https://www.bloomberg.com/news/articles/2020-03-17/here-s-how-the-oil-crash-is-hitting-emerging-market-currencies. https://www.bloomberg.com/news/articles/2020-03-17/here-s-how-the-oil-crash-is-hitting-emerging-market-currencies.
~~282~~283 Nevzat Devranoglu, “Turkish Lira Hits Weakest Level Since 2018 Currency Crisis Due to Covid-19,” 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-March 17, 2020, https://www.nasdaq.com/articles/turkish-lira-hits-weakest-level-since-2018-currency-crisis-due-to-
Covid-19-2020-03-17. Covid-19-2020-03-17.
~~283~~284 Johnson, Steve, “Currency Sell-Off Threatens Emerging Market Response to Covid-19,” Johnson, Steve, “Currency Sell-Off Threatens 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.
~~284~~285 “COVID-19-Hit Iran Asks IMF for Aid amid US Sanctions,” “COVID-19-Hit Iran Asks IMF for Aid amid US 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, among other things, prohibitions on the ability of the United States to vote in favor of lending sanctions, which include, among other things, prohibitions on the ability of the United States to vote in favor of lending
IMF or World Bank assistance to Iran. The United States, however, cannot unilaterally block lending to a particular IMF or World Bank assistance to Iran. The United States, however, cannot unilaterally block lending to a particular
country. Approving an IMF or World Bank loan requires a majority of the total voting power and the U.S. voting country. Approving an IMF or World Bank loan requires a majority of the total voting power and the U.S. 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 did borrow from the World Bank between 2003 and 2005 over U.S. opposition. since 1962, but did borrow from the World Bank between 2003 and 2005 over U.S. opposition.
~~285~~286 Joshua Goodman, “IMF Rejects Maduro’s Bid for Emergency Loan to Fight Virus,” Joshua Goodman, “IMF Rejects Maduro’s Bid 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/.
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medical equipment and medicine. An emergency meeting of G-7 (Canada, France, Germany, 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 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 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.hoping for, and U.S. and European stock markets fell sharply after the meeting.~~286~~287 However, on However, on
March 16, 2020, the leaders of the G-7 countries held an emergency summit by teleconference to 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 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.”~~287~~288 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;
mobilize “the full range” of policy instruments, including monetary and fiscal measures as well as mobilize “the full range” of policy instruments, including monetary and fiscal measures as well 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 well as other international organizations, to support countries worldwide World Bank Group, as well as other international organizations, to support countries worldwide
as part of a coordinated global response.as part of a coordinated global response.~~288~~289 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.~~289~~290
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 all. summit may be held after 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.~~290~~291 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; the 2020 chair of the G-20, Saudi Arabia, is embroiled in its own domestic 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 tensions make G-20 consensus more difficult.political issues and oil price war; and U.S.-China tensions make G-20 consensus more difficult.~~291~~292
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.~~292~~293 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 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, Meanwhile, international organizations including the IMF and multilateral development banks,
have tried to forge ahead with economic support given their current resources. Additionally, the 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 Financial Stability Board (FSB), an international body including the United States that monitors

~~286~~287 Jack Ewing and Jeanna Smialek, “Economic Powers Vow to Fight Crisis,” Jack Ewing and Jeanna Smialek, “Economic Powers Vow to Fight Crisis,” New York Times, March 3, 2020. , March 3, 2020.
~~287~~288 White House, G-7 Leaders’ Statement, March 16, 2020, https://www.whitehouse.gov/briefings-statements/g7- White House, G-7 Leaders’ Statement, March 16, 2020, https://www.whitehouse.gov/briefings-statements/g7-
leaders-statement/. leaders-statement/.
~~288~~289 Ibid. Ibid.
~~289~~290 “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, “U.S. Offered ‘Large Sum’ to German Company for Access to Coronavirus Vaccine Research, German E. Sanger, “U.S. Offered ‘Large Sum’ to German Company for Access to Coronavirus Vaccine Research, German
Officials Say,” New York Times, March 15, 2020. Officials Say,” New York Times, March 15, 2020.
~~290~~291 The G-20 includes the G-7 countries plus Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia, The G-20 includes the G-7 countries plus Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia,
Saudi Arabia, South Africa, South Korea, Turkey, and the European Union (EU). Saudi Arabia, South Africa, South Korea, Turkey, and the European Union (EU).
~~291~~292 Matthew Goodman and Mark Sobel, “Time to Pull the G-20 Fire Bell,” Center for Strategic and International Matthew Goodman and Mark Sobel, “Time to Pull the G-20 Fire Bell,” Center for Strategic and International
Studies, March 18, 2020. Studies, March 18, 2020.
~~292~~293 Matthew Goodman, Stephanie Segal, and Mark Sobel, “Assessing the G20 Virtual Summit,” Center for Strategic Matthew Goodman, Stephanie Segal, and Mark Sobel, “Assessing the G20 Virtual Summit,” Center for Strategic
and International Studies, March 27, 2020. and International Studies, March 27, 2020.
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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, 2020March 20, 2020, that its members are actively cooperating to maintain financial stability during that its members are actively cooperating to maintain financial stability during
market stress related to COVID-19.market stress related to COVID-19.~~293~~294 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 available capital and while noting that many FSB members have already taken action to release available capital and
liquidity buffers. liquidity 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.~~294~~295 In Q3 2019—before the In Q3 2019—before the
outbreak of COVID-19—global debt levels reached an all-time high of nearly $253 trillion, about outbreak of COVID-19—global debt levels reached an all-time high of nearly $253 trillion, about
320% of global GDP.320% of global GDP.~~295~~296 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. Globally, most debt is held by nonfinancial corporations (29%), is held by emerging markets. Globally, 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 will make it significantly more difficult for many private borrowers exogenous shock that will 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.~~296~~297 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.~~297~~298
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 will result in a decline in bank assets, debts, absent government intervention. These defaults will 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
solvency problems for banks. Meanwhile, many governments are dramatically increasing solvency problems for banks. Meanwhile, many governments are dramatically 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 likelihood of sovereign (government) defaults. Debt pressure on public finances and raising the likelihood 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 (usually U.S. dollars). Many emerging market currencies have denominated in foreign currencies (usually U.S. dollars). Many emerging market currencies have

~~293~~294 “FSB Coordinates Financial Sector Work to Buttress the Economy in Response to Covid-19,” Financial Stability “FSB 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.
~~294~~295 John Plender, “The Seeds of the Next Debt Crisis,” John Plender, “The Seeds of the Next Debt Crisis,” Financial Times, March 4, 2020. , March 4, 2020.
~~295~~296 Emre Tiftik, Khadija Mahmood, Jadranka Poljak, and Sonja Gibbs, “Global Debt Monitor: Sustainability Matters,” 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, Institute for International Finance, January 13, 2020.This includes debt held by governments, financial institutions,
nonfinancial institutions, and households. nonfinancial institutions, and households.
~~296~~297 “Covid-19 Worsens Debt Crisis in Poor Countries,” Jubilee Debt Campaign, March 22, 2020. “Covid-19 Worsens Debt Crisis in Poor Countries,” Jubilee Debt Campaign, March 22, 2020.
~~297~~298 Trieu Pham, “EM Sovereign Debt Issuance: Encouraging Signs but Not Yet Back to Business as Usual,” Trieu Pham, “EM Sovereign Debt Issuance: Encouraging Signs but Not Yet Back to Business as Usual,” ING, May , May
26, 2020. 26, 2020.
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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 will face difficult choices if there is a widespread wave of defaults. Most Governments will 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
economically impacted by the pandemic. These governments face decisions about the type of economically 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
allocate rescue funds, and what conditions if any to attach to funds. Governments have allocate 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 generally In terms of defaults by governments (sovereign defaults), emergency assistance is 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 will need to consider whether on a bilateral basis. The IMF and other potential donor countries will need to consider whether
the IMF has adequate resources to respond to the crisis, how to allocate funding if the demand for the IMF has adequate resources to respond to the crisis, how to allocate 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 will allow this debt service relief to be extended for two years. Additionally, the G-contributions will allow this debt service relief to be extended for two years. Additionally, 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 will banks, hedge funds, and other global financial funds, also announced that private creditors will
join the debt relief effort on a voluntary basis. This debt standstill will free up more than $20 join the debt relief effort on a voluntary basis. This debt standstill will free up more than $20
billion for these countries to spend on improving their health systems and fighting the billion for these countries to spend on improving their health systems and fighting the
pandemic.pandemic.~~298~~299 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 standstill is complicated. There is debate among creditor governments about However, the debt standstill is complicated. There is debate among creditor governments about
what debts should be included in the standstill, and how it can be enforced. On May 1, the IIF in a what debts should be included in the standstill, 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 still, including letter laid out some of the obstacles facing private sector participation in the debt still, including
reliance on “voluntary” participation, each participating creditor will need to make its own reliance on “voluntary” participation, each participating creditor will need to make its own
assessments, the standstill could require a lengthy contract-by-contract approach, and the assessments, the standstill 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 standstill.refusal to participate in the debt standstill.~~299~~300 Reportedly, some African countries are opting to Reportedly, some African countries are opting to
negotiate debt relief individually with China and other creditor nations because of concerns they negotiate debt relief individually with China and other creditor nations because of concerns they
will be blocked from financial markets if they participate in the G-20 debt standstill.will be blocked from financial markets if they participate in the G-20 debt standstill.~~300~~301

~~298~~299 Davide Barbuscia, Marwa Rashad, and Andrea Shalal, “G20 Countries Agree Debt Freeze for World’s Poorest Davide Barbuscia, Marwa Rashad, and Andrea Shalal, “G20 Countries Agree Debt Freeze for World’s Poorest
Countries,” Countries,” Reuters, April 15, 2020 , April 15, 2020
~~299~~300 Patrick Bolton, Lee Buchheit, Pierre-Olivier Gourinchas, et. al, “Sovereign Debt Standstills: An Update” Patrick Bolton, Lee Buchheit, Pierre-Olivier Gourinchas, et. al, “Sovereign Debt Standstills: An Update” VoxEU, ,
May 28, 2020. May 28, 2020.
~~300~~301 Jevans Nyabiage, “All Eyes on China as Africa Spurns G20 Debt Relief Plan,” Jevans Nyabiage, “All Eyes on China as Africa Spurns G20 Debt Relief Plan,” South China Morning Post, May 26, , May 26,
2020. 2020.
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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
Die”).Die”).~~301~~302 School closures are affecting 1.5 billion children worldwide, challenging parental leave School closures are affecting 1.5 billion children worldwide, challenging parental leave
policies.policies.~~302~~303 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.~~303~~304
Microsoft and Amazon have instructed all of their Seattle-based employees to work from home Microsoft and Amazon have instructed all of their Seattle-based employees to work from home
until the end of March 2020.until the end of March 2020.~~304~~305
The drop in business and tourist travel has caused a sharp drop in scheduled airline flights by as The drop in business and tourist travel has caused a sharp drop in scheduled airline flights by as
much as 10%; airlines are estimating they could lose $113 billion in 2020 (an estimate that could much as 10%; airlines are estimating they could lose $113 billion 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),~~305~~306 while while
airports in Europe estimate they could lose $4.3 billion in revenue due to fewer flights.airports in Europe estimate they could lose $4.3 billion in revenue due to fewer flights.~~306~~307 Industry Industry
experts estimate that many airlines will be in bankruptcy by May 2020 under current conditions experts estimate that many airlines will 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.~~307~~308 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. 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, 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 causing prices to drop sharply, which negatively affects energy producers, renewable energy
producers, and electric vehicle manufacturers, but generally is positive for consumers and producers, and electric vehicle manufacturers, but generally is positive for consumers and
businesses. Saudi Arabia is pushing other OPEC (Organization of the Petroleum Exporting 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 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. U.S. shale oil producers, who are not represented by OPEC, support the move to raise

~~301~~302 Rosenberg, Alyssa, “Covid-19 Shut Down Mona Lisa and James Bond. We Can’t Let it Isolate Us,” Rosenberg, 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-cant-let-it-isolate-us/. bond-we-cant-let-it-isolate-us/.
~~302~~303 Taylor, Adam, Teo Armus, Rick Noak, “Covid-19 Turmoil Widens as U.S. Death Toll Mounts; Xi Cancels Japan Taylor, Adam, Teo Armus, Rick Noak, “Covid-19 Turmoil Widens as U.S. Death Toll Mounts; Xi Cancels Japan
Trip,” Trip,” Washington Post, March 5, 2020; Strauss, Valerie, “1.5 Billion Children Around Globe Affected by School , March 5, 2020; Strauss, Valerie, “1.5 Billion Children Around Globe Affected by School
Closure. What Countries Are Doing to Keep Kids Learning During Pandemic,” Closure. What Countries Are Doing to Keep Kids 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-
what-countries-are-doing-keep-kids-learning-during-pandemic/. what-countries-are-doing-keep-kids-learning-during-pandemic/.
~~303~~304 Hill, Andrew and Emma Jacobs, “Covid-19 May Create Lasting Workplace Change,” Hill, Andrew and Emma Jacobs, “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.
~~304~~305 Armus, Teo, “Live Updates: Covid-19 Turmoil Widens as U.S. Death Toll Mounts; Xi Cancels Japan Trip,” Armus, Teo, “Live Updates: Covid-19 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/. , March 5, 2020, https://www.washingtonpost.com/world/2020/03/05/Covid-19-live-updates/.
~~305~~306 Taylor, Adam, “Airlines Could Suffer up to $113 Billion in Lost Revenue Due to Covid-19 Crisis, IATA Says,” Taylor, Adam, “Airlines Could Suffer up to $113 Billion in Lost Revenue Due to Covid-19 Crisis, IATA 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/.
~~306~~307 “Airlines Slash Flights to Cut Costs as Covid-19 Hits Travel Demand,” “Airlines Slash Flights to Cut Costs as Covid-19 Hits Travel Demand,” Financial Times. https://www.ft.com/. https://www.ft.com/
content/c28b5790-62c6-11ea-a6cd-df28cc3c6a68. content/c28b5790-62c6-11ea-a6cd-df28cc3c6a68.
~~307~~308 Smyth, Jamie Smyth, Andrew Edgecliffe-Johnson, Peggy Hollinger, Myles McCormick, David Keohane, and Smyth, Jamie Smyth, Andrew Edgecliffe-Johnson, Peggy Hollinger, Myles McCormick, David Keohane, and
Richard Milne, “Most Airlines Face Bankruptcy by End of May, Industry Body Warns,” Richard Milne, “Most Airlines Face Bankruptcy by End of May, Industry Body Warns,” Financial Times, March 16, March 16,
2020. 2020.
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prices. prices.~~308~~309 An unwillingness by Russia to agree to output reductions added to other downward 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 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 oil prices below $25 per barrel at times, half the estimated $50 per barrel break-even point for
most oil producing countries.most oil producing countries.~~309~~310 Rising oil supplies and falling demand combined to create an Rising oil supplies and falling demand combined to create an
estimated surplus of 25 million barrels a day and overwhelmed storage capacity at times and estimated surplus of 25 million barrels a day and overwhelmed storage capacity at times and
challenged the viability of U.S. shale oil production.challenged the viability of U.S. shale oil production.~~310~~311 In 2019, low energy prices combined with In 2019, low energy prices combined with
high debt levels reportedly caused U.S. energy producers to reduce their spending on capital 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.equipment, reduced their profits and, in some cases, led to bankruptcies.~~311~~312 Reportedly, in late Reportedly, in late
2019 and early 2020, bond and equity investors, as well as banks, reduced their lending to shale 2019 and early 2020, bond and equity investors, as well as banks, reduced their lending to shale
oil producers and other energy producers that typically use oil and gas reserves as collateral.oil producers and other energy producers that typically use oil and gas reserves as collateral.~~312~~313
Disruptions to industrial activity in China reportedly caused delays in shipments of computers, Disruptions to industrial activity in China reportedly caused delays in shipments of computers,
cell phones, toys, and medical equipment.cell phones, toys, and medical equipment.~~313~~314 Factory output in China, the United States, Japan, Factory output in China, the United States, Japan,
and South Korea all declined in the first months of 2020.and South Korea all declined in the first months of 2020.~~314~~315 Reduced Chinese agricultural exports, Reduced Chinese agricultural exports,
including to Japan, are leading to shortages in some commodities. In addition, numerous auto including to Japan, are leading to shortages in some commodities. In addition, numerous auto
producers have faced shortages in parts and other supplies that have been sourced in China. producers have faced shortages in parts and other supplies that have been sourced in China.
Reductions in international trade have also affected ocean freight prices. Some freight companies Reductions in international trade have also affected ocean freight prices. Some freight companies
argue they could be forced to shutter if prices did not rebound quickly.argue they could be forced to shutter if prices did not rebound quickly.~~315~~316 Disruptions in the Disruptions in the
movements of goods and people reportedly caused some companies to reassess how international movements of goods and people reportedly caused some companies to reassess how international
they want their supply chains to be.they want their supply chains to be.~~316~~317 According to some estimates, nearly every member of the According to some estimates, nearly every member of the
Fortune 1000 has been affected by disruptions in production in China.Fortune 1000 has been affected by disruptions in production in China.~~317~~318
Conclusions
The quickly evolving nature of the COVID-19 crisis creates a number of issues that make it 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 difficult to estimate the full cost to global economic activity. These issues include, but are not
limited to the following: limited to the following:
 How long will the crisis last?  How long will the crisis last?

~~308~~309 Brower, Derek, “Cash-Strapped US Shale Producers Pray for OPEC Aid,” Brower, Derek, “Cash-Strapped US Shale Producers Pray for OPEC Aid,” Financial Times, March 3, 2020. , March 3, 2020.
https://www.ft.com/content/9161e62c-5cb1-11ea-b0ab-339c2307bcd4. https://www.ft.com/content/9161e62c-5cb1-11ea-b0ab-339c2307bcd4.
~~309~~310 Strauss, Delphine, “Why There Are No Winners from the Oil Price Plunge This Time,” 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, “Oil 2020. https://www.ft.com/content/da2b0700-622c-11ea-b3f3-fe4680ea68b5; Mufson, Steve and Will Englund, “Oil
Price War Threatens Widespread Collateral Damage,”Price War Threatens 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.
~~310~~311 Sheppard, David and Derek Brower, “U.S. Crude Oil Price Drops Below $20,” Sheppard, David and Derek Brower, “U.S. Crude Oil Price Drops Below $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.
~~311~~312 “Texas Oil Groups: Panhandling Ahead,” “Texas Oil Groups: Panhandling Ahead,” The Financial Times, January 20, 2020. , January 20, 2020.
~~312~~313 Ibid. Ibid.
~~313~~314 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 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.
~~314~~315 Newmyer, Tory, “The Finance 202: Stocks Stage Major Comeback, but Manufacturing Report Points to Continued Newmyer, Tory, “The Finance 202: Stocks Stage Major Comeback, but 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-report-points-to-continued-finance-202/2020/03/03/the-finance-202-stocks-stage-major-comeback-but-manufacturing-report-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.
~~315~~316 Lynch, David J., “Economic Fallout from China’s Covid-19 Mounts Around the World,” Lynch, David J., “Economic Fallout from China’s Covid-19 Mounts Around the World,” Washington Post,
February 13, 2020. https://www.washingtonpost.com/business/economy/economic-fallout-from-chinas-Covid-19-February 13, 2020. https://www.washingtonpost.com/business/economy/economic-fallout-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
~~316~~317 Ibid. Ibid.
~~317~~318 Ibid. Ibid.
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 How many workers will be affected both temporarily and permanently?  How many workers will be affected both temporarily and permanently?
 How many countries will be infected and how much economic activity will be  How many countries will be infected and how much economic activity will be
reduced? reduced?
 When will the economic effects peak?  When will the economic effects peak?
 How much economic activity will be lost as a result of the viral outbreak?  How much economic activity will 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 will the crisis have on how businesses  What temporary and permanent effects will 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?
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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 reverse repo operations, adding $1.5 tril ion of liquidity to the Expanded reverse repo operations, adding $1.5 tril ion 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 securities and $200 bil ion in mortgage-backed least $500 bil ion in Treasury securities and $200 bil ion in mortgage-backed
securities. securities.
March 16: Increased reverse repo operations by another $500 bil ion. Increased reverse repo operations by another $500 bil ion.
March 17: U.S. Treasury Secretary Mnuchin approved the Federal Reserve’s creation U.S. Treasury Secretary Mnuchin approved the Federal Reserve’s creation
of a “Commercial Paper Funding Facility," (CPFF) through March 17, 2021, which wil of a “Commercial Paper Funding Facility," (CPFF) through March 17, 2021, which wil
allows the Fed to create a corporation which can purchase commercial paper, short-allows the Fed to create a corporation which can purchase commercial paper, short-
term, unsecured loans made by businesses for everyday expenses and authorized up term, unsecured loans made by businesses for everyday expenses and authorized up
to $10 bil ion from the Treasury to help cover loan losses incurred under this to $10 bil ion from the Treasury to help cover loan losses incurred under this
program. program.
March 17: Relaunched the Primary Dealer Credit Facility (PDCF) for at least six Relaunched the Primary Dealer Credit Facility (PDCF) for at least six
months. Starting March 20, the PDCF wil offer short-term loans to banks secured by months. Starting March 20, the PDCF wil offer short-term loans to banks secured by
col ateral such as municipal bonds or investment-grade corporate debt. col ateral 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, a new program to lend money to banks so they can through the end of September, a new program to lend money to banks so they can
purchase assets from money market funds. Treasury is offering up to $10 bil ion to purchase assets from money market funds. Treasury is offering up to $10 bil ion to
cover loan losses the Fed incurs from the program. cover loan losses the Fed incurs from the program.
March 23: Announced a series of measures designed to stabilize markets, enhance Announced a series of measures designed to stabilize markets, enhance
liquidity and stimulate growth. The measures included the rol out of 2 new facilities, liquidity and stimulate growth. The measures included the rol out of 2 new facilities,
the Primary Market Corporate Credit Facility (PMCCF) for new bond and loan the Primary 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 removed its caps on planned liquidity for outstanding corporate bonds. The FOMC removed its caps on planned
QE purchases and wil now purchase Treasuries and agency mortgage-backed QE purchases and wil now purchase Treasuries and agency mortgage-backed
securities “in the amounts needed to support smooth market functioning and securities “in the amounts needed to support smooth market functioning and
effective transmission of monetary policy to broader financial conditions and the effective transmission of monetary policy to broader financial conditions and the
economy.” economy.”

U.S. Congress
March 5: Passed, and the President signed, a bil providing $8.3 bil ion in emergency Passed, and the President signed, a bil providing $8.3 bil ion in emergency
funding for federal agencies to respond to the COVID-19 outbreak (H.R. 6074: funding for federal agencies to respond to the COVID-19 outbreak (H.R. 6074:
COVID-19 Preparedness and Response Supplemental Appropriations Act 2020). COVID-19 Preparedness and Response Supplemental Appropriations 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 First COVID-19 Response Act); measure was (H.R. 6201; P.L. 116-127, Families First COVID-19 Response Act); measure was
signed by President Trump on March 18, 2020. The measure appropriates about $100 signed by President Trump on March 18, 2020. The measure appropriates about $100
bil ion and includes tax credits for employers offering paid sick leave and increases to bil ion and includes tax credits for employers offering paid sick leave and increases to
unemployment benefits and food assistance. unemployment benefits and food assistance.
March 19: The Senate introduced the COVID-19 Aid, Relief, and Economic Security : The Senate introduced the COVID-19 Aid, Relief, and Economic Security
Act (S. 3548) to provide $2.0 tril ion in assistance to businesses and workers. Act (S. 3548) to provide $2.0 tril ion in assistance to businesses and workers.
March 27: Passed, and the President signed, the COVID-19 Aid, Relief, and Passed, and the President signed, the COVID-19 Aid, Relief, and
Economic Security Act (CARES Act, H.R. 748, P.L. 116-136), a $2.1 tril ion fiscal Economic Security Act (CARES Act, H.R. 748, P.L. 116-136), a $2.1 tril ion fiscal
stimulus package. It includes $454 bil ion in loans for businesses, $349 bil ion in loans stimulus package. It includes $454 bil ion in loans for businesses, $349 bil ion in loans
for small businesses, $300 bil ion for direct payments of $1,200 each for lower- and for small businesses, $300 bil ion for direct payments of $1,200 each for lower- and
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middle-income individual taxpayers (and $500 for each child), $250 bil ion for middle-income individual taxpayers (and $500 for each child), $250 bil ion for
unemployment insurance, and $221 bil ion in tax deferrals, among other measures. unemployment insurance, and $221 bil ion in tax deferrals, among other measures.
March 30: Some Members of the House of Representatives announced they had Some Members of the House of Representatives announced they had
begun work on a fourth COVID-19 bil targeting a number of issues, including short begun work on a fourth COVID-19 bil targeting a number of issues, including short
supplies of medical equipment and protective gear to enhance worker protections, supplies of medical equipment and protective gear to enhance worker 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, allowing the Federal President Trump declared a state of emergency, allowing the Federal
Government to distribute up to $50 bil ion in aid to states, cities, and territories. Government to distribute up to $50 bil ion in aid to states, cities, and territories.
March 17: The Internal Revenue Service postponed the April 15 tax-payment The Internal Revenue Service postponed the April 15 tax-payment
deadline for 90 days and wil waive interest and penalties. (The extension and waiver deadline for 90 days and wil waive interest and penalties. (The extension and waiver
is available only to individuals and corporations that owe $1 mil ion or $10 mil ion or is available only to individuals and corporations that owe $1 mil ion or $10 mil ion or
less, respectively.) less, respectively.)
March 17: Administration officials begin negotiations with Members of Congress on Administration officials begin negotiations with Members of Congress on
a third stimulus package. a third stimulus package.
March 31: President Trump calls for $2 tril ion infrastructure spending, possibly as President Trump calls for $2 tril ion 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 0.5% and its one-day Cut its benchmark interest rate to a record-low 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, ensure the normal functioning of the electronic payments system, and that, sector, ensure the normal functioning of the electronic payments system, and that,
together with the government, it had agreed to postpone until the end of May all loan together with the government, it had agreed to postpone until the end of May all 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 totaling $370 mil ion in its budget to soften the impact Passed measures totaling $370 mil ion in its budget to soften the impact
from the COVID-19 crisis, including $25 mil ion for the health sector; guarantees from the COVID-19 crisis, including $25 mil ion for the health sector; guarantees
worth $100 mil ion to companies unable to pay their employees; and $65 mil ion to worth $100 mil ion to companies unable to pay their employees; and $65 mil ion to
help the needy, small businesses, and those unable to work because of stay-at-home help the needy, small businesses, and those unable to work because of stay-at-home
orders. It also announced that it would write off penalties on delayed electricity bil orders. It also announced that it would write off penalties on delayed electricity bil
payments worth some $150 mil ion, postpone taxes on company profits, and cut the payments worth some $150 mil ion, postpone taxes on company profits, and cut the
wages of government ministers and lawmakers by half for the duration of the crisis.wages of government ministers and lawmakers by half for the duration of the crisis.
Argentina
Central Bank of Argentina
March 19: Indicated that it would lower reserve requirements for banks that Indicated that it would lower reserve requirements for banks that
extended special credit lines to small and medium-sized enterprises at a maximum extended special credit lines to small and medium-sized enterprises 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 pesos ($11.3 bil ion) to Announced a fiscal stimulus package of 700 bil ion 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), increasing public include providing credit to productive activities (350 bil ion pesos), increasing public
investments (100 bil ion pesos), and waiving payrol taxes for firms affected by the investments (100 bil ion pesos), and waiving payrol taxes for firms affected by the
COVID-19. COVID-19.
Armenia
March 17: The Central Bank of Armenia cut its key refinancing rate by 25 basis The Central Bank of Armenia cut its key refinancing rate by 25 basis
points to 5.25% from 5.5% due to the effects of the COVID-19 outbreak on the points to 5.25% from 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 interest rate by 25 basis points to 0.5% due to the Cut its benchmark interest 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: (1) targeting the 3-year government bond yield at 0.25% via purchases in of measures: (1) targeting the 3-year government bond yield at 0.25% via purchases in
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the secondary market, (2) providing a three-year term funding facility to authorized the secondary market, (2) providing a three-year term funding facility to authorized
deposit-taking institutions worth at least AU$90 bil ion at a fixed rate of 0.25%, deposit-taking institutions worth at least AU$90 bil ion at a fixed rate of 0.25%,
aiming to support credit to small and medium-sized enterprises, (3) fixing the aiming to support credit to small and medium-sized enterprises, (3) fixing the
exchange settle balances at the central bank at 10 basis points. It wil also continue to exchange settle balances at the central bank at 10 basis points. It wil 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-term repo operations of six-month maturity or longer would further notice. Longer-term repo operations of six-month maturity or longer would
be undertaken at least weekly. The central bank also set out forward guidance, saying be undertaken at least weekly. The central bank also set out forward guidance, saying
that it wil not increase the cash rate until progress is made towards ful employment that it wil not increase the cash rate until progress 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 operation, it has injected cash into the Through its daily money market operation, it has injected cash into the
banking system (through repurchasing agreements), aiming to ease liquidity banking system (through repurchasing agreements), aiming to ease liquidity
constraints in the stressed bond market: AU$12.7 bil ion (March 19), AU$10.7 bil ion constraints in the stressed bond market: 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 16), and AU$8.8 (March 13). (March 18), AU$8.8 (March 17), AU$5.9 bil ion (March 16), and AU$8.8 (March 13).

Government of Australia
March 12: Announced a AU$17.6 bil ion ($11.4 bil ion) stimulus package that Announced a AU$17.6 bil ion ($11.4 bil ion) stimulus package that
includes support for business investment, cash flow assistance for small and medium includes support for business investment, cash flow assistance for small and medium
sized business and employees, and household stimulus payments. sized business and employees, and household stimulus payments.
March 16: The Australian Securities and Investments Commission ordered large The Australian Securities and Investments Commission 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 levels executed on March 13, 2020, until further notice. the levels 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)
wil be provided with an investment capacity of $15 bil ion to enable smaller lenders wil be provided with an investment capacity of $15 bil ion to enable smaller lenders
to continue supporting Australian consumers and small businesses. (AOFM wil be to continue supporting Australian consumers and small businesses. (AOFM wil be
able to purchase residential mortgage backed securities and invest in a range of other able to purchase residential mortgage backed securities and invest in a range of other
asset backed securities and warehouse facilities over the next 12 months.) asset backed securities and warehouse facilities 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 measures for existing welfare and newly unemployed which extends income support measures for existing welfare and newly unemployed
workers, and boosted previously announced measures for businesses such as cash workers, and boosted previously announced measures for businesses such as cash
flow and wage subsidies. The government is also expected to give local businesses flow and wage subsidies. The government is also expected to give local businesses
AU$100,000 if the company has a turnover of less than AU$50 mil ion each year and AU$100,000 if the company has a turnover of less than AU$50 mil ion each year and
underwrite 50% of up AU$40 bil ion in loans offered by local lenders to small and underwrite 50% of up AU$40 bil ion in loans offered by local lenders to small and
medium sized companies. medium 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 ion people, marking a third tranche of subsidize the wages of an estimated 6 mil ion people, marking a third tranche of
stimulus designed to limit the fallout of the COVID-19 pandemic on the country’s stimulus designed to limit the fallout of the COVID-19 pandemic on the country’s
economy. The “job keeper” allowance, which would bring the country’s COVID-19-economy. The “job keeper” allowance, which would bring the country’s COVID-19-
related stimulus so far to A$320 bil ion (about 15% of Australia’s gross domestic related stimulus so far to A$320 bil ion (about 15% of Australia’s gross domestic
product), wil provide eligible companies with AU$1,500 every fortnight for six product), wil provide eligible companies with AU$1,500 every fortnight for six
months for each employee. Any company that lost 30% of its revenue can apply for months for each employee. 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 euro ($4.4 bil ion) “corona crisis fund” to cover, Set up an initial 4 bil ion euro ($4.4 bil ion) “corona crisis fund” to cover,
among other things, benefits for affected workers, as well as bridge loans and credit among other things, benefits for affected workers, as well as bridge loans and credit
guarantees to shore up businesses’ liquidity. guarantees to shore up businesses’ 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 wil provide another 9 bil ion euros in jobs and keep companies afloat, and it wil provide another 9 bil ion euros in
guarantees and warranties, 15 bil ion euros in emergency aid, and 10 bil ion euros in guarantees and warranties, 15 bil ion euros in emergency aid, and 10 bil ion euros in
tax deferrals. tax deferrals.
Bosnia and
March 17: The prime minister met with the IMF Resident Representative in Bosnia The prime minister 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 ion euros ($181 mil ion) loan to Bosnia under a Rapid Financing Instrument (RFI) mil ion euros ($181 mil ion) loan to Bosnia under a Rapid Financing Instrument (RFI)
to finance the increasing costs sustained by the country’s health system in combating to finance the increasing costs sustained by the country’s health system 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 ion in two the economic blow of the COVID-19 pandemic. It also sold $830 mil ion 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 sovereign bonds held by Brazilian banks, which wil be carried for dol ar-denominated sovereign 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 ion reais ($233.81 bil ion) into Announced that it planned to inject 1.2 tril ion reais ($233.81 bil ion) into
the country’s financial system to counteract the effects of the COVID-19 outbreak, the country’s financial system to counteract the effects of the COVID-19 outbreak,
with more than half that amount comprising loans to banks. Under the program, with more than half that amount comprising loans to banks. Under the program,
lenders wil be able to package their loan portfolios into long-term deposits to be lenders wil be able to package their loan portfolios into long-term deposits to be
acquired by the central bank in a move aimed at freeing up 670 bil ion reais for fresh acquired by the central bank in a move aimed at freeing up 670 bil ion reais for fresh
loans. It also (1) cut long-term reserve requirements to 17% from 25%, freeing up 68 loans. It also (1) cut long-term reserve requirements to 17% from 25%, freeing up 68
bil ion reais currently in compulsory deposits with the central bank to banks, (2) bil ion reais currently in compulsory deposits with the central bank to banks, (2)
announced measures allowing small and mid-sized lenders to issue up to 2 bil ion announced measures allowing small and mid-sized lenders to issue up to 2 bil ion
reais in special long-term bonds guaranteed by a privately held deposit insurance fund, reais in special long-term bonds guaranteed by a privately held deposit insurance fund,
limited to an amount equivalent to its shareholders’ equity, and (3) wil extend loans limited to an amount equivalent to its shareholders’ 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 reais ($28.6 bil ion) Announced a fiscal stimulus package of 147.1 bil ion reais ($28.6 bil ion)
to mitigate the impact of the COVID-19 and boost the economy. It does not contain to mitigate the impact of the COVID-19 and boost the economy. It does not contain
new money, but is a range of measures that aim to protect the most vulnerable new money, but is a range of measures that aim to protect the most vulnerable
population through social assistance payments (83.4 bil ion reais), support domestic population through social assistance payments (83.4 bil ion reais), support domestic
companies and defer business taxes (59.4 bil ion reais), and increase investments in companies and defer business taxes (59.4 bil ion reais), and increase investments in
healthcare to combat the COVID-19 (4.5 bil ion reais). The government also healthcare to combat the COVID-19 (4.5 bil ion reais). The government also
announced a 3.1 bil ion reais boost to the “Bolsa Família” assistance for some of announced a 3.1 bil ion reais boost to the “Bolsa Família” assistance for some of
Brazil’s poorest families. Brazil’s poorest families.
March 16: The National Monetary Council (CMN) approved the measures that wil The National Monetary Council (CMN) approved the measures that wil
allow banks to (1) increase loans and offer better terms to firms and households over allow banks to (1) increase loans and offer better terms to firms and households over
the next six months and (2) extend certain loan maturities for the next six months. It the next six months and (2) extend certain loan maturities for the next six months. It
also lowered capital requirements for banks. also lowered capital requirements 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. It wil also extend the deadline for submitting the temporary and cost 7 bil ion reais. It wil also extend the deadline for submitting the
2019 base year net income report to June 30 from April 30 and allow companies to 2019 base year net income report to June 30 from April 30 and allow 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 minimum wage) for three months, among other measures. up to 70% (or the minimum wage) for three months, among other measures.
Bulgaria
Government of Bulgaria
March 30: Announced it wil spend more than 1 bil ion levs ($566 mil ion) to pay Announced it wil spend more than 1 bil ion levs ($566 mil ion) to pay
part of workers’ salaries in companies whose operations have been hit by the part of workers’ salaries in companies whose operations have been hit by the
COVID-19 crisis, part of part of an overall 4.5 bil ion-lev package. COVID-19 crisis, part of part of an overall 4.5 bil ion-lev package.
March 31: Announced plans to raise the ceiling on new debt it can raise to 10 bil ion Announced plans to raise 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 allocate $30 mil ion to finance Cambodia’s Announced that it would allocate $30 mil ion to finance Cambodia’s
COVID-19 screening and monitoring efforts. COVID-19 screening and monitoring efforts.
March 10: Al ocated between $800 mil ion to $2 bil ion to address the economic Al ocated between $800 mil ion to $2 bil ion 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 its target for the overnight rate by 50 basis points to 1.25% Lowered 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 Government of Announced that it wil broaden the scope of the current Government of
Canada bond buyback program and temporarily add new Term Repo operations. Canada bond buyback program and temporarily add new Term Repo operations.
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March 13: Lowered its benchmark overnight rate to 1.25% from 1.75% in response Lowered 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’ Acceptance Purchase Announced its intention to launch the Bankers’ 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’ Acceptances issued and guaranteed by any purchases of one-month Bankers’ 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
weekly with the purchase amount and reserve rate being adjusted to reflect market weekly with the purchase amount and reserve rate being adjusted to reflect market
conditions. (For the first operation, the Bank of Canada will purchase up to $10 conditions. (For the first operation, the Bank of Canada will purchase up to $10
bil ion of one-month Bankers’ Acceptances with a reserve rate of the overnight index bil ion of one-month Bankers’ Acceptances with a reserve rate of the overnight index
swap rate plus 20 basis points.) swap rate plus 20 basis points.)
March 16: Announced that it wil broaden eligible col ateral for its term repo facility Announced that it wil broaden eligible col ateral for its term repo facility
and increase purchases of mortgage-backed securities (Canada Mortgage Bonds). and increase purchases of mortgage-backed securities (Canada Mortgage Bonds).
March 27: Cut its overnight interest rate by 50 basis points to 0.25%, its lowest level Cut its overnight interest rate by 50 basis points to 0.25%, its lowest 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 securities in the secondary market. bil ion per week of Government of Canada securities in the secondary market.

Canadian Government
March 6: Announced an investment of CA$27 mil ion to fund COVID-19 research Announced an investment of CA$27 mil ion to fund COVID-19 research
and accelerate the development, testing, and implementation of measures to deal and accelerate the development, testing, and implementation of measures to deal
with the COVID-19 outbreak. with the COVID-19 outbreak.
March 11: Unveiled CA$1 bil ion ($750 mil ion) in funding for vaccine research and Unveiled CA$1 bil ion ($750 mil ion) in funding for vaccine research and
health measures. health measures.
March 13: Established a Business Credit Availability Program (BCAP) to support Established a Business Credit Availability Program (BCAP) to support
financing in the private sector through the Business Development Bank of Canada financing in the private sector through the Business Development Bank of Canada
(BDC) and Export Development Canada (EDC); it wil allow BDC and EDC to (BDC) and Export Development Canada (EDC); it wil allow BDC and EDC to
provide more than $10 bil ion of additional support to businesses. provide more than $10 bil ion 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 Domestic Stability Buffer requirement for domestic systemically important banks the Domestic Stability Buffer requirement for domestic systemically important banks
by 1.25% of risk weighted assets; it wil increase the lending capacity of Canada’s large by 1.25% of risk weighted assets; it wil increase the lending capacity of Canada’s large
banks and support the supply of credit to the economy by more than CA$300 bil ion. banks and support the supply of credit to the economy by more than CA$300 bil ion.
March 25: Almost doubled the value of an aid package previously announced to help Almost doubled the value of an aid package previously announced to help
people and businesses deal with losses from the COVID-19 outbreak, from CA$27 people and businesses deal with losses from the COVID-19 outbreak, from CA$27
bil ion to CA$52 bil ion ($36.6 bil ion). It wil give people affected by the outbreak bil ion to CA$52 bil ion ($36.6 bil ion). It wil give people affected by the outbreak
CA$2,000 a month, delay student loan repayments, and defer tax payments, among CA$2,000 a month, delay student loan repayments, and defer tax payments, among
other measures to boost the economy. other measures 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 allocating $4 billion to purchase inflation-linked bank to inject liquidity, including allocating $4 billion 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 package of $11.75 bn to mitigate the negative Announced a stimulus package of $11.75 bn to mitigate the negative
economic impact of the outbreak of COVID-19 and civil unrest. The measures economic 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, delaying tax payments for small businesses, a cash bonus for from home, delaying tax payments for small businesses, a cash bonus for
approximately 2 mil ion workers who lack formal employment, and emergency funds approximately 2 mil ion workers who lack formal employment, and emergency funds
for municipalities. for municipalities.
China
People’s Bank of China (PBOC)
February 3: Expanded reverse repo operations by $174 bil ion; added another $71 Expanded reverse repo operations by $174 bil ion; added another $71
bil ion on February 4. bil ion on February 4.
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February 16: Cut the one-year medium-term lending facility rate by 10 basis points. Cut the one-year medium-term 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: Lowered bank reserve requirements, freeing up about $79 bil ion to be Lowered bank reserve requirements, freeing up about $79 bil ion to be
loaned out. loaned out.
March 30: Lowered the interest rate on reverse repurchase agreements to 2.20% Lowered the interest rate on reverse repurchase agreements to 2.20%
from 2.40%, as authorities stepped up easing measures to relieve pressure on the from 2.40%, as authorities stepped up easing measures to relieve 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 banks to extend the terms of business loans and commercial Asked banks to extend the terms 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 ion in medical equipment to help China control the spread of COVID-19. mil ion in medical equipment to help China control the spread of COVID-19.
February 27: Announced a number of tax relief measures to tackle COVID-19 Announced a number of tax relief measures 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
elimination of VAT on medical, catering, accommodation, hairdressing, and laundry elimination of VAT on medical, catering, accommodation, hairdressing, and laundry
services as well as on masks and protective clothing. services as well as on masks and protective clothing.
March: Earmarked $15.9 bil ion to fight the epidemic. Earmarked $15.9 bil ion to fight the epidemic.
March 21: Announced that it would cut fees on a large scale to stimulate private-Announced that it would cut fees on a large scale to stimulate private-
sector investment and also accelerate the development of “new infrastructure” to sector investment and also accelerate 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 of yuan Reportedly is considering a fiscal stimulus package worth tril ions of yuan
to revive the economy amid the COVID-19 pandemic. The ramped-up spending will to revive the economy amid the COVID-19 pandemic. The ramped-up spending will
aim to spur infrastructure investment, backed by as much as 2.8 tril ion yuan ($394 aim to spur infrastructure investment, backed by as much as 2.8 tril ion 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
macroeconomic policy changes and pursue more proactive fiscal policy. It called for macroeconomic policy changes and pursue more proactive fiscal policy. It called for
expanding the budget deficit, issuing more local and national bonds, guiding interest expanding the budget deficit, issuing more local and national bonds, guiding interest
rates lower, delaying loan repayments, reducing supply-chain bottlenecks and rates lower, delaying loan repayments, reducing supply-chain bottlenecks and
boosting consumption. boosting consumption.
Colombia
Central Bank of Colombia
March 18: Announced a $400 mil ion dol ar to peso swap to take place on March Announced a $400 mil ion dol ar to peso swap to take place on March
19, and that it would increase the resources available to financial institutions and ease 19, and that it would increase the resources 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 economic growth amid fall-out from COVID-19. boost economic growth amid fall-out from COVID-19.

Government of Colombia
March 18: Announced that it has 14.8 tril ion pesos ($3.65 bil ion) to spend on Announced that it has 14.8 tril ion pesos ($3.65 bil ion) to spend on
emergency measures to ease the economic fallout from COVID-19, but it wil not emergency measures to ease the economic fallout from COVID-19, but it wil not
take on additional debt to finance the efforts (12.1 tril ion pesos wil come from the take on additional debt to finance the efforts (12.1 tril ion pesos wil come from the
country’s savings programs). It wil initially spend 1 tril ion pesos on the healthcare country’s savings programs). It wil initially spend 1 tril ion pesos on the healthcare
system and 500 bil ion pesos on additional payments to social welfare programs for system and 500 bil ion pesos on additional payments to social welfare programs for
families, young people and the elderly, accelerate a plan to return value added tax to families, young people and the elderly, accelerate a plan to return value added tax to
the neediest Colombians from April, and make 48 tril ion pesos available to give the neediest Colombians from April, and make 48 tril ion pesos available to give
credit guarantees to small and medium-sized businesses and households. credit guarantees to small and medium-sized businesses 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 requirements and provide liquidity to banks. cut mandatory reserve requirements and provide liquidity to banks.
Cyprus
Government of Cyprus
March 15: Unveiled a 700 mil ion euro support package for companies and workers Unveiled a 700 mil ion euro support package for companies and workers
to deal with the impact of the spread of COVID-19, which includes a temporary VAT to deal with the impact of the spread of COVID-19, which includes a temporary VAT
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reduction, support for individuals and companies affected, additional paid sick leave, reduction, support for individuals and companies affected, additional paid sick leave,
and 100 mil ion euro for the public health sector. and 100 mil ion euro for the public health sector.
March 23: Announced that it is revising the economic package announced on March Announced that it is revising the economic package announced on March
15. It wil amount to at least 1.5 bil ion euro and include direct support, deferred 15. It wil amount to at least 1.5 bil ion euro and include direct support, deferred
government income in the form of payment suspension of direct and indirect taxes government income in the form of payment suspension of direct and indirect taxes
and other fees, as well as government guarantees (which would not incur a fiscal and other fees, as well 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 its main two-week repo rate by 50 The Czech National Bank lowered its main two-week repo rate by 50
basis points to 1.75%, reversing its February rate hike to combat the hit from the basis points to 1.75%, reversing its February rate hike to combat the hit from the
virus outbreak. It also raised the number of repo operations that provide liquidity to virus outbreak. It also raised the number of repo operations that provide liquidity to
banks to three times a week from once, noting that bids would be met with zero banks to three times a week 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 interest rates further if needed. announced that it was ready to cut interest rates further if needed.

Government of the Czech Republic
March 9: Adopted a number of economic measures, which wil include providing 100 Adopted a number of economic measures, which wil 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 employment rate, paying out indirect in the form of guarantees to maintain the employment rate, paying out
(through the respective employers) 60% of the average contribution base to (through the respective employers) 60% of the average contribution base to
employees affected by the quarantine, supporting employers who continue, despite employees affected by the quarantine, supporting employers 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
employees by covering 80% of salary costs (up to 1.2 bil ion CZK), and allocating 10 employees by covering 80% of salary costs (up to 1.2 bil ion CZK), and allocating 10
bil ion CZK ($390 mil ion) to the Czech-Moravian Guarantee and Development Bank bil ion CZK ($390 mil ion) to the Czech-Moravian Guarantee and Development Bank
for immediate granting of interest-free loans with a one-year deferral with the for immediate granting of interest-free loans with a one-year deferral with the
possibility of a two-year extension for businesses affected by the COVID-19 possibility of a two-year extension for businesses affected by the COVID-19
(“COVID Loans Program”). (On March 16, the government earmarked another 1 (“COVID Loans Program”). (On March 16, the government earmarked 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 stemming from the late submission of tax declarations or reports. fines stemming from the late submission of tax declarations or reports.
March 13: The Czech Banking Association (ČBA) wil allow banks to voluntarily The Czech Banking Association (ČBA) wil allow 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 in this year’s budget deficit, as it offers help to Approved a five-fold rise in this year’s budget deficit, as it offers help to
businesses hit hard by the COVID-19 outbreak. businesses hit hard by the COVID-19 outbreak.
April 1: Announced that it had approved a scheme for a moratorium of up to six Announced that it had approved a scheme for a moratorium of up to six
months on consumer, company, and mortgage loan payments to help the country months on consumer, 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 wil be offering low interest rate Released banks’ emergency buffer and wil 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. dol ars in two loans with a maturity date on April 8 and June 19 auctioning off U.S. dol ars in two loans with a maturity date on April 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 worth of its mint 30-year government bonds in an auction Sold $750 mil ion worth of its mint 30-year government bonds in an auction
that was held a month early to expedite funding of aid packages due to COVID-19 that was held a month early to expedite funding of aid packages due to COVID-19
that is expected to cost the state more than 60 bil ion Danish crowns ($8.8 bil ion). that is expected to cost the state more than 60 bil ion Danish crowns ($8.8 bil ion).

Government of Denmark
March 10: Wil grant tax breaks to businesses affected by the COVID-19 as part of a Wil grant tax breaks to businesses affected by the COVID-19 as part of a
series of measures worth $20 bil ion. Large businesses wil be given an additional 30 series of measures worth $20 bil ion. Large businesses wil be given an additional 30
days to pay value added tax, while all companies wil be granted four additional days to pay value added tax, while all companies wil 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’ tax accounts, so that corporations can avoid paying the negative interest businesses’ 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 banks’ counter-cyclical capital buffer, Indicated that it would release banks’ counter-cyclical capital buffer,
freeing about 200 bil ion Danish crowns ($30 bil ion) for lending. Other fiscal freeing about 200 bil ion Danish crowns ($30 bil ion) for lending. Other fiscal
measures, worth 2.8 bil ion Danish crowns ($416 mil ion), include compensation to measures, worth 2.8 bil ion Danish crowns ($416 mil ion), include compensation to
companies for salary payments to employees who have fallen il or been quarantined companies for salary payments to employees who have fallen il or been quarantined
due to the COVID-19. due to the COVID-19.
March 18: Proposed an economic aid package worth 40 bil ion kroner ($5.8 bil ion) Proposed an economic aid package worth 40 bil ion kroner ($5.8 bil ion)
to help small businesses cover (for three months) most of the losses in revenue and to help small businesses cover (for three months) most of the losses in revenue and
some of their fixed expenses as a result of the COVID-19 outbreak. Under the some of their fixed expenses as a result of the COVID-19 outbreak. Under the
program, companies who have seen their revenues decline by 40% or more wil program, companies who have seen their revenues decline by 40% or more wil
receive government grants to help cover between 25% to 80% of their fixed costs, receive government grants to help cover between 25% to 80% of their fixed costs,
and self-employed and small firms who see their revenues fall more than 30% wil also and self-employed and small firms who see their revenues fall more than 30% wil 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’ deadline of end-May to submit their annual reports in an effort to help companies’ 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” move to support the economy in the face of the COVID-19 as a “preemptive” move to support the economy in the face of the COVID-19
outbreak. outbreak.
March 23: Told commercial banks to cut interest on dol ar deposits to 1% above the Told commercial banks to cut interest on dol ar deposits to 1% above the
London Interbank Offered Rate (Libor) instead of 1.5% above Libor, starting March London Interbank Offered Rate (Libor) instead of 1.5% above Libor, starting March
23, in order to control the exchange market and reduce the expected dol arization 23, in order to control the exchange market and reduce the expected dol arization
operations after cutting interest rates on March 16. operations after cutting interest rates on March 16.
March 29: Instructed Egyptian banks to apply temporary limits on daily withdrawals Instructed Egyptian banks to apply temporary limits on daily withdrawals
and deposits in a move seemingly designed to control inflation and hoarding during and deposits in a move seemingly designed to control inflation and hoarding during
the coronavirus’ spread, after 30 bil ion Egyptian pounds ($1.91 bil ion) were the coronavirus’ spread, after 30 bil ion Egyptian pounds ($1.91 bil ion) were
withdrawn from banks in the past three weeks. The daily limit for individuals would withdrawn from banks in the past three weeks. The daily limit 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 allocate 100 bil ion Egyptian pounds Indicated that the government wil allocate 100 bil ion Egyptian pounds
($6.4 bil ion) to finance a “comprehensive” state plan for combating the COVID-19 ($6.4 bil ion) to finance a “comprehensive” state plan for combating the COVID-19
outbreak. outbreak.
March 22: Announced that the government would allocate 20 bil ion Egyptian Announced that the government would allocate 20 bil ion Egyptian
pounds ($1.27 bil ion) to support the stock exchange. pounds ($1.27 bil ion) to support the stock exchange.
March 30: Ordered relevant authorities to boost strategic reserves of staple goods, Ordered relevant authorities to boost strategic reserves 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 domestic economic developments and the impact of to 5.5%, citing global and domestic economic developments 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 Reserve Bank (SARB) cut its main the South African rand after the South African Reserve 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 allow euro euros ($135.28 bil ion) this year (with a focus on corporate debt), and allow euro
zone banks to fall short of some key capital and cash requirements (in order to keep zone banks to fall short of some key capital and cash requirements (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 securities to counter the risks posed by the program of private and public sector securities to counter the risks 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). Purchases wil be conducted until the end of 2020 and wil include all Programme). Purchases wil be conducted until the end of 2020 and wil include all
the asset categories eligible under the existing asset purchase program. It wil also the asset categories eligible under the existing asset purchase program. It wil also
support commercial debt markets by expanding the range of eligible assets under the support commercial debt markets by expanding the range of eligible assets under the
corporate sector purchase program to nonfinancial commercial paper of sufficient corporate sector purchase program to nonfinancial commercial 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 Claims to include claims related to the financing of the corporate sector. Credit Claims to include claims related to the financing of the corporate sector.
March 26: Announced that under the new 750 bil ion euro ($818 bil ion) temporary Announced that under the new 750 bil ion 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-imposed limits on how many bonds it could buy from any single euro zone self-imposed limits on how many bonds it could buy from any single euro zone
country. Under its long-running asset purchase scheme, the ECB has capped bond country. Under its long-running asset purchase scheme, 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, health-care would use “spare” money from the EU budget to help businesses, health-care
systems, and sectors in need; additionally, the EU’s own investment fund wil systems, and sectors in need; additionally, the EU’s own investment fund wil
guarantee 8 bil ion euros ($8.9 bil ion) of loans to 100,000 small- and medium-sized guarantee 8 bil ion euros ($8.9 bil ion) of loans to 100,000 small- and medium-sized
enterprises and affected companies may be able to delay the payment of their existing enterprises and affected companies may be able to delay the payment of their existing
loans. loans.
March 19: Adopted a Temporary Framework to enable Member States to use the Adopted a Temporary Framework to enable Member States to use the
ful flexibility foreseen under state aid rules to support the economy in the context of ful flexibility foreseen 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 from banks; (3) subsidized public loans state guarantees for loans taken by companies from banks; (3) subsidized public loans
to companies; (4) safeguards for banks that channel state aid to the real economy; to companies; (4) safeguards for banks that channel state aid to the real economy;
and (5) short-term export credit insurance. and (5) short-term export credit insurance.
Fiji
March 18: The Reserve Bank of Fiji cut its Overnight Policy Rate by 25 basis points The Reserve Bank of Fiji cut its Overnight Policy Rate by 25 basis points
to 0.25% in order to stimulate demand and cushion the blow to its important tourism to 0.25% in order 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 generous guarantees on loans made to small businesses, Pledged more generous guarantees on loans made to small businesses,
more cash for firms struggling to hold on to workers, and a solidarity fund to help more cash for firms struggling to hold on to workers, 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’ hours, instead of laying them off. workers’ hours, instead of laying them off.
March 16: Announced that the government would guarantee 300 bil ion euros in Announced that the government would guarantee 300 bil ion euros in
bank loans for small and medium-sized businesses. bank loans for small and medium-sized businesses.
March 17: The Autorité des Marchés Financiers (AMF), France’s financial-markets The Autorité des Marchés Financiers (AMF), France’s financial-markets
authority, stated that it would forbid short selling of stock in 92 companies during the authority, stated that it would forbid short selling of stock in 92 companies during the
March 17 session. March 17 session.
March 17: Announced that it would spend 45 bil ion euros ($50 bil ion) to help small Announced that it would spend 45 bil ion euros ($50 bil ion) to help small
businesses and employees struggling with the COVID-19 outbreak, including through businesses and employees struggling with the COVID-19 outbreak, including through
an expanded partial-unemployment package in which the state pays the salaries of an expanded partial-unemployment package in which the state pays the salaries of
employees who are not needed during the crisis. employees who are not needed during the crisis.
Gambia
February 28: The Central Bank of The Gambia lowered its policy rate by 50 basis The Central Bank of The Gambia lowered its policy rate by 50 basis
points to 12.0% amid risks from the COVID-19 outbreak and uncertainty surrounding points to 12.0% amid risks from the COVID-19 outbreak and uncertainty surrounding
global food prices. global food prices.
Georgia
April 1: The government announced that it wil put 2 bil ion lari ($606 mil ion) from The government announced that it wil put 2 bil ion lari ($606 mil ion) 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 ion lari that wil be allocated for the healthcare system from the addition to 351 mil ion lari that wil be allocated for the healthcare system from the
state budget. The government wil fund three months’ payments for electricity and state budget. The government wil fund three months’ payments for electricity and
gas consumption to Georgians who used less than 200 kilowatts of electricity and 200 gas consumption to Georgians who used less than 200 kilowatts of electricity and 200
cubic meters of gas a month in March, April, and May.cubic meters of gas a month in March, April, and May.
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Germany
Government of Germany
March 13: Pledged to provide unlimited liquidity assistance to German companies hit Pledged to provide unlimited liquidity assistance to German companies hit
by the pandemic. (The measure envisages an expansion of loans provided by KfW, the by the pandemic. (The measure envisages an expansion of loans provided by KfW, the
state development bank, and wil allow companies to defer bil ions of euros in tax state development bank, and wil allow companies to defer bil ions of euros in tax
payments.) The Bundestag also expanded the Kurzarbeit or short-time work scheme, payments.) The Bundestag also expanded the Kurzarbeit or short-time work scheme,
under which companies that put their workers on reduced hours can receive state under which companies that put their workers on reduced hours can receive 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) between 2021 and 2024. bil ion per year (about $3.5 bil ion) between 2021 and 2024.
March 23: Agreed to a package worth more than 750 bil ion euros ($808 bil ion) to Agreed to a package worth more than 750 bil ion euros ($808 bil ion) to
mitigate the damage of the COVID-19 outbreak. It includes 156 bil ion euros in debt mitigate the damage of the COVID-19 outbreak. It includes 156 bil ion euros in debt
to finance higher social spending, 50 bil ion-euro liquidity fund for self-employed to finance higher social spending, 50 bil ion-euro liquidity fund for self-employed
people, 600 bil ion-euro rescue fund (400 bil ion euros in guarantees,100 bil ion euros people, 600 bil ion-euro rescue fund (400 bil ion euros in guarantees,100 bil ion euros
in loans through state-run development bank KfW, and 100 bil ion euros earmarked in loans through state-run development bank KfW, and 100 bil ion euros earmarked
for equity stakes in companies). Additionally, the state’s KfW bank has 500 bil ion for equity stakes in companies). Additionally, the state’s KfW bank has 500 bil ion
euros available to boost liquidity of German companies. euros available to boost liquidity of German 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, Canada, Iceland, Japan, New Zealand, Norway, Switzerland, Britain, and the Australia, 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 economic impacts it anticipates from the spread of the from 16% due to the negative economic impacts it anticipates from the spread of the
COVID-19. COVID-19.
Greece
Government of Greece
March 9: Wil suspend the payment of sales taxes due at the end of March (for four Wil 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 euros ($2.20 bil ion) to support Announced a package of up to 2 bil ion euros ($2.20 bil ion) to support
businesses fol owing the COVID-19 outbreak businesses fol owing the COVID-19 outbreak
March 17: The Hellenic Bank Association wil offer businesses hit by the COVID-19 The Hellenic Bank Association wil offer businesses hit by the COVID-19
crisis a six-month freeze on loan payments as part of relief efforts to help borrowers crisis a six-month freeze on loan payments as part of relief efforts to help borrowers
deal with the economic shutdown. deal with the economic shutdown.
March 30: Announced new tax breaks and economic assistance to thousands of Announced new tax breaks and economic assistance to thousands of
businesses and workers to buffer its economy from a national lockdown triggered by businesses and workers to buffer its economy from a national lockdown triggered by
the COVID-19 pandemic. The support measures include a one-off benefit for 1.7 the COVID-19 pandemic. The support measures include a one-off benefit for 1.7
mil ion, or 81% of private sector workers whose jobs are temporarily suspended and mil ion, or 81% of private sector workers whose jobs are temporarily 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, and suspend VAT and tax arrear payments for 800,000 businesses. self-employed, 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 from an The government announced that it would use nearly $26 mil ion from an
emergency fund to help the country’s neediest families, as measures to combat the emergency fund to help the country’s neediest families, as measures to combat the
spread of a COVID-19 impact on the economy and jobs, It plans to withdraw 200 spread of a COVID-19 impact on the economy and jobs, It plans to withdraw 200
mil ion quetzals ($25.8 mil ion) from the emergency fund and give families 1,000 mil ion quetzals ($25.8 mil ion) from the emergency fund and give families 1,000
quetzals ($129) to help pay for electricity, water and supplies.quetzals ($129) to help pay for electricity, water and supplies.
Hong Kong
Hong Kong Monetary Authority
March 3: Lowered its base rate charged through the overnight discount window by Lowered its base rate charged through the overnight discount window by
50 basis points to 1.5% after the U.S. Federal Reserve delivered a rate cut of the same 50 basis points to 1.5% after the U.S. Federal Reserve delivered a rate cut of the same
margin. margin.
March 16: Lowered its base rate charged through the overnight discount window to Lowered its base rate charged through the overnight discount window to
0.86%, after the U.S. Federal Reserve delivered a rate cut. It also cut the level of 0.86%, after the U.S. Federal Reserve delivered a rate cut. It also cut the level of
capital buffers it requires financial institutions to hold to 1% from 2% of their risk-capital buffers it requires financial institutions to hold to 1% from 2% of their risk-
weighted assets to help companies and lenders weather the impact of the COVID-19 weighted assets to help companies and lenders 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 package as part of Announced a HK$120 bil ion ($15.4 bil ion) relief 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 , income, property, and business taxes, low-interest, housing, cutting payrol , income, property, and business taxes, low-interest,
government-guaranteed loans for businesses, and an extra month’s worth of government-guaranteed loans for businesses, 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 steps to help businesses, boosting the range of Announced emergency steps to help businesses, boosting the range of
col ateral it accepts from banks and calling on lenders to apply a loan repayment col ateral it accepts from banks and calling on lenders to apply a loan repayment
moratorium for firms hit by the coronavirus economic fallout. (It said in a statement moratorium for firms hit by the coronavirus economic fallout. (It said in a statement
that performing corporate loans in domestic banks’ balance sheets totaled close to that performing corporate loans in domestic banks’ balance sheets totaled close to
3.6 tril ion forints, and that it would apply a 30% haircut on those, boosting the range 3.6 tril ion forints, and that it would apply a 30% haircut on those, boosting the range
of col aterals that can be used and thus also lifting banks’ lending potential by more of col aterals that can be used and thus also lifting banks’ lending potential by more
than 2.5 tril ion forints ($8.10 bil ion)). It also offered to inject forint liquidity into the than 2.5 tril ion forints ($8.10 bil ion)). It also offered to inject forint liquidity into the
banking system via foreign exchange swaps. banking system via foreign exchange swaps.
March 18: Urged domestic banks to introduce a moratorium on household loan Urged domestic banks to introduce a moratorium 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, the Bank would ask the government to and that if banks did not bring in the measure, the Bank would ask the government to
pass a decree enforcing it. It also announced that it was considering restarting its pass a decree enforcing it. It also announced that it was considering restarting its
mortgage note buying program to provide more long-term liquidity for the banking mortgage note buying program to provide more long-term liquidity for the banking
system and reduce the financing costs of household loans. system and reduce the financing costs of household loans.
March 24: Launched new measures to boost liquidity and flagged further steps if Launched new measures to boost liquidity and flagged further steps if
needed to prevent long-term damage to the economy from the coronavirus needed to prevent long-term damage to the economy from the coronavirus
pandemic. It moved to pump more money into the banking system by introducing a pandemic. It moved to pump more money into the banking system by introducing a
massive fixed-rate col ateralized loan instrument. Lending will be provided to banks at massive fixed-rate col ateralized loan instrument. Lending will 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 released domestic lenders from the requirement government bond purchases. It also released domestic lenders 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 ateralized loan tenders, offering liquidity to banks at a Announced its col ateralized loan tenders, offering liquidity to banks at a
fixed rate of 0.9% on various maturities, and that it would offer them to domestic fixed rate of 0.9% on various maturities, and that it would offer them to domestic
open-ended investment funds, in order to support the government securities market open-ended investment funds, in order to support the government securities market
and the real estate market and help offset the fallout from the coronavirus pandemic. and the real estate market and help offset the fallout from the coronavirus pandemic.

Government of Hungary
April 4: Created a $2 bil ion special fund to aid the fight against COVID-19 and it wil Created a $2 bil ion special fund to aid the fight against COVID-19 and it wil
include contributions from banks and foreign retailers. Hungarian banks wil be include contributions from banks and foreign retailers. Hungarian banks wil be
expected to pay 55 bil ion forints ($163 mil ion) in the fund this year, with expected to pay 55 bil ion forints ($163 mil ion) in the fund this year, with
multinational retailers adding 36 bil ion forints. Local governments wil have to divert multinational retailers adding 36 bil ion forints. Local governments wil 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 wil pay half of their central budget revenue to the fund for a total of 1.2 parties wil 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 stimulus package, which includes subsidized loans to Hungarian Announced a stimulus package, which includes subsidized loans to Hungarian
companies and funds to preserve jobs. It would amount to 18%-20% of gross companies and funds to preserve jobs. It would amount to 18%-20% of gross
domestic product (GDP), including National Bank of Hungary programs. The prime domestic product (GDP), including National Bank of Hungary programs. The prime
minister said that the government was ready to pay some of the wage costs of minister said that the government was ready to pay some of the wage costs of
companies forced to cut working hours, would support investments with 450 bil ion companies forced to cut working hours, would support investments with 450 bil ion
forints ($1.3 bil ion), and would provide targeted support for sectors such as tourism, forints ($1.3 bil ion), and would provide targeted support for sectors such as tourism,
the food industry, and construction. Subsidized loans to companies wil total more the food industry, and construction. Subsidized loans to companies wil total more
than 2 tril ion forints, while pensioners wil get one month’s extra pension to be than 2 tril ion forints, while pensioners wil get one month’s extra pension to be
disbursed in four tranches from early 2021. disbursed in four tranches from 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 to Cut its benchmark interest rate by 50 basis points to 2.25%, as it tries to
alleviate the potential impact of the COVID-19 on its tourism-dependent economy. It alleviate the potential impact of the COVID-19 on its tourism-dependent economy. It
wil also lower deposit institutions’ average reserve requirement to 0% from 1% to wil also lower deposit institutions’ average reserve requirement to 0% from 1% to
ease banks’ liquidity positions. ease banks’ liquidity positions.
March 18: Cut its key interest rate for the second time in a week by 50 basis points Cut its key interest rate for the second time in a week by 50 basis points
to 1.75% and reduced the banks’ countercyclical capital buffer to 0% from 2%. to 1.75% and reduced the banks’ countercyclical capital buffer to 0% from 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 deferring taxes and levies, providing temporary relief to the 19, which includes deferring taxes and levies, providing temporary relief to the
tourism industry, and accelerating ongoing and planned infrastructure projects. tourism 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
domestic product) to cushion the impact of COVID-19 on the economy. It includes domestic product) to cushion the impact of COVID-19 on the economy. It includes
state guarantees on bridge loans to businesses and the payment of as much as 75% of state guarantees on bridge loans to businesses and the payment of as much as 75% of
an employee’s lost salaries over the next two-and-a-half months. In addition, public an employee’s lost salaries over the next two-and-a-half months. In addition, public
projects worth 20 bil ion krona will be moved forward to this year and tax breaks for projects worth 20 bil ion krona will be moved forward to this year and tax breaks for
banks wil be implemented sooner than originally planned. banks wil be implemented sooner than originally planned.
India
Reserve Bank of India
March 12: Announced a $2 bil ion injection into the foreign-exchange market to Announced a $2 bil ion injection into the foreign-exchange market to
support the rupee. support the rupee.
March 13: Announced a plan to add liquidity through short-term repurchase Announced a plan to add liquidity through short-term repurchase
operations. operations.
March 14: Plans to infuse 250 bil ion rupees ($3.4 bil ion) into the system through Plans to infuse 250 bil ion 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 market for a total of 100 Announced that it wil buy bonds on the open market 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 all market segments liquid and stable. keep all market segments liquid and stable.
March 27: Lowered its benchmark repo rate by 75 basis points to 4.40% and Lowered its benchmark repo rate by 75 basis points to 4.40% and
announced several other steps to tackle the impact of COVID-19 on various announced several other steps to tackle the impact of COVID-19 on various
industries from the lockdown, some of which include cutting banks’ cash reserve industries from the lockdown, some of which include cutting banks’ cash reserve
ratio and targeted long term repos operations. The reverse repo rate was reduced by ratio and targeted long term repos operations. The reverse repo rate was reduced by
90 basis points to 4%. 90 basis points to 4%.

Government of India
March 15: Pledged $10 mil ion towards South Asian Association for Regional Pledged $10 mil ion towards South Asian Association for Regional
Cooperation (SAARC) “COVID-19 emergency fund.” Cooperation (SAARC) “COVID-19 emergency fund.”
March 15: Is reportedly “pushing” state-run banks to approve new loans amounting Is reportedly “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 ($22.6 bil ion) economic stimulus plan Announced a 1.7-tril ion-rupee ($22.6 bil ion) economic stimulus plan
providing direct cash transfers and food security measures to give relief to mil ions of providing direct cash transfers and food security measures to give relief to mil ions of
poor people hit by a nationwide lockdown over COVID-19. It wil provide direct cash poor people hit by a nationwide lockdown over COVID-19. It wil provide direct cash
transfers to 200 mil ion women and the elderly, hand out free cooking gas cylinders transfers to 200 mil ion women and the elderly, hand out free cooking gas cylinders
to 83 mil ion poor families, and help feed about 800 mil ion poor people over the to 83 mil ion poor families, and help feed about 800 mil ion poor people over the
next three months by distributing 5 kilograms of staple food-grains wheat or rice for next three months by distributing 5 kilograms of staple food-grains wheat or rice for
each person free of cost, with a kilogram of pulses for every low-income family. The each person free of cost, with a kilogram of pulses for every low-income family. The
government outlined plans for medical insurance cover of 5 mil ion rupees ($66,000) government outlined plans for medical insurance cover of 5 mil ion rupees ($66,000)
for every frontline health worker, from doctors, nurses and paramedics to those for every frontline health worker, from doctors, 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 reverse repurchase rate by 25 basis points to Cut the seven-day reverse repurchase rate by 25 basis points to
4.75%. 4.75%.
March 19: Cut the seven-day reverse repurchase rate by 25 basis points to 4.50% Cut the seven-day reverse 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, including 27 tril ion rupiah ($2 bil ion) on February 20 and 6 COVID-19 epidemic, including 27 tril ion rupiah ($2 bil ion) on February 20 and 6
tril ion rupiah ($405 mil ion) on March 13, adding to 8 tril ion rupiah of bonds tril ion rupiah ($405 mil ion) on March 13, adding to 8 tril ion 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 wil be limited next week as part of efforts to contain the and stock trading hours wil be limited next week 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 rupiah ($742.6 Announced a stimulus package worth 10.3 tril ion rupiah ($742.6
mil ion) to protect its economy from the impact of the COVID-19 outbreak. It mil ion) to protect its economy from the impact of the COVID-19 outbreak. It
includes 4.6 tril ion rupiah in subsidies for basic needs for poor households, 1.5 includes 4.6 tril ion rupiah in subsidies for basic needs for poor households, 1.5
tril ion rupiah for the state property financing program, 443.4 bil ion rupiah for tril ion rupiah for the state property financing program, 443.4 bil ion rupiah for
airlines and travel agents, 298.5 bil ion rupiah to bring in foreign tourists, 3.3 tril ion airlines and travel agents, 298.5 bil ion rupiah to bring in foreign tourists, 3.3 tril ion
rupiah cover for shortfalls in regional budgets, and fiscal transfers (147 bil ion rupiah). rupiah cover for shortfalls in regional budgets, and fiscal transfers (147 bil ion rupiah).
March 13: Announced a 120 tril ion rupiah ($8.1 bil ion) stimulus package to support Announced a 120 tril ion rupiah ($8.1 bil ion) stimulus package to support
the economy, of which 22.9 tril ion rupiah wil be tax breaks, lasting six months the economy, of which 22.9 tril ion rupiah wil be tax breaks, lasting six months
starting in April. The government is also exempting companies in 19 manufacturing starting in April. The government is also exempting companies in 19 manufacturing
sectors from having to pay import taxes, while giving them a 30% corporate tax sectors from having to pay import taxes, while giving them a 30% corporate tax
discount, relaxing rules for exports (e.g., fisheries and forestry products) and imports discount, relaxing rules for exports (e.g., fisheries and forestry products) and imports
(e.g., steel, sugar, flour and salt), and easing rules on loan restructuring for small- and (e.g., steel, sugar, flour and salt), and easing rules on loan restructuring for small- and
medium-sized companies. medium-sized companies.
March 17: Ordered the Finance Minister to divert 40 tril ion rupiah ($2.7 bil ion) Ordered the Finance Minister to divert 40 tril ion rupiah ($2.7 bil ion)
from the non-urgent government budget to increase spending in programs that could from the non-urgent government budget to increase spending in programs that could
provide direct support to household consumption or increase people’s purchasing provide direct support to household consumption or increase people’s 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 ion rupiah ($24.85 bil ion) more on COVID-19 response, social welfare 405.1 tril ion rupiah ($24.85 bil ion) more on COVID-19 response, social welfare
programs, and economic stimulus, including a 3 percentage point cut in corporate tax programs, and economic stimulus, 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 small businesses affected by the Indicated that it would help small businesses affected by the
COVID-19 outbreak by providing tax breaks and allowing defaults on bank loans for COVID-19 outbreak by providing tax breaks and allowing defaults on bank loans for
several months. several months.
March 12: Requested $5 bil ion emergency funding from the International Monetary Requested $5 bil ion emergency 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: Allocated at least 250 mil ion euro to import medicine and medical Allocated at least 250 mil ion euro to import medicine and medical
equipment required to fight COVID-19. equipment required to fight COVID-19.

Government of Iran
March 12: Asked the United Nations to allocate resources to help it tackle COVID- Asked the United Nations to allocate resources to help it tackle COVID-
19 and facilitate imports as a way of boosting the country’s sanctions-hit healthcare 19 and facilitate imports as a way of boosting the country’s sanctions-hit healthcare
system. system.
March 15: Announced a series of banking, welfare and tax relief measures to Announced a series of banking, welfare and tax relief measures to
support businesses and families as the COVID-19 outbreak puts severe strain on the support businesses and families as the COVID-19 outbreak puts severe strain on the
economy. Employees wil be able to defer health insurance, tax and utility bil economy. Employees wil be able to defer health insurance, tax and utility bil
payments for the next three months, while the 3 mil ion poorest Iranians wil receive payments for the next three months, while the 3 mil ion poorest Iranians wil 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 of the Union for Foreign The European Union’s High Representative of the Union for Foreign
Affairs and Security Policy (Josep Borrell) announced that the EU would provide 20 Affairs and Security Policy (Josep Borrell) announced that the EU would provide 20
mil ion euros in humanitarian aid to Iran to help alleviate the COVID-19 and support mil ion euros in humanitarian aid to Iran to help alleviate 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 Leader Ayatol ah Ali President Hassan Rouhani wrote to Supreme Leader Ayatol ah Ali
Khamenei requesting permission to withdraw $1 bil ion from the country’s sovereign Khamenei requesting permission to withdraw $1 bil ion from the country’s sovereign
wealth fund (the National Development Fund) to support the healthcare system, wealth fund (the National Development 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 allocate 20% of its annual state budget to Announced that it would allocate 20% of its annual state budget to
fighting the pandemic in the country. The budget allocation, amounting to about 1,000 fighting the pandemic in the country. The budget allocation, amounting to about 1,000
tril ion rials, would include grants and low-interest loans to those affected by COVID-tril ion rials, would include grants and low-interest loans to those affected by COVID-
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19, Rouhani said. While the allocated amount is worth some $6.3 bil ion at the rial’s 19, Rouhani said. While the allocated amount is worth some $6.3 bil ion at the rial’s
free market exchange rate of about 160,000 rials per dol ar, the government may free market exchange rate of about 160,000 rials per dol ar, the government may
decide to allocate some of the funds at the official rate of 42,000 (which is used to decide to allocate some 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 euros ($3.44 The government announced that it wil set aside 3 bil ion euros ($3.44
bil ion) to provide additional funding to the health service (435 mil ion euros), boost bil ion) to provide additional funding to the health service (435 mil ion euros), boost
workers’ sick pay and benefits (2.4 bil ion euros), and offer liquidity assistance to workers’ sick pay and benefits (2.4 bil ion euros), and offer liquidity assistance to
businesses affected (200 mil ion euros). businesses affected (200 mil ion euros).
Israel
Bank of Israel
March 18: Announced it would allocate up to $15 bil ion for swap transactions Announced it would allocate up to $15 bil ion for swap transactions
between currencies for domestic banks, part of a move aimed at shoring up the between currencies for domestic banks, part of a move aimed at shoring up the
Israeli economy amid the COVID-19 pandemic. Israeli 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 agreements can include corporate years, expanded its repo transactions so that the agreements 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 term of three years (with a fixed interest rate of 0.1%) with the goal of banks for a term of three years (with a fixed interest rate of 0.1%) with the goal of
increasing the supply of bank credit to small businesses. The size of the plan wil be 5 increasing the supply of bank credit to small businesses. 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 small and medium-sized businesses facing a credit line for banks to lend money to small and medium-sized businesses facing a
cash crisis with a high-level government guarantee. cash crisis with a high-level government guarantee.
March 11: Wil expand an aid package (for a second time) to help the country deal Wil expand an aid package (for a second time) to help the country deal
with the COVID-19 outbreak by 6 bil ion shekels to a total of 10 bil ion shekels ($2.8 with the COVID-19 outbreak by 6 bil ion shekels to a total of 10 bil ion shekels ($2.8
bil ion). Of that, 8 bil ion shekels wil be in a fund to provide cheap loans to bil ion). Of that, 8 bil ion shekels wil be in a fund to provide cheap loans to
businesses, 1 bil ion shekels wil boost the health system by increasing medicine businesses, 1 bil ion shekels wil boost the health system by increasing medicine
stocks and preparing hospitals to receive a larger number of patients, and 1 bil ion wil stocks and preparing hospitals to receive a larger number of patients, and 1 bil ion wil
be earmarked for needs such as the police force. be earmarked for needs such as the police force.
March 16: Wil expand its aid package (for a third time) to help businesses hurt by Wil expand its aid package (for a third time) to help businesses hurt by
the COVID-19 crisis by another 5 bil ion shekels ($1.3 bil ion). the COVID-19 crisis by another 5 bil ion shekels ($1.3 bil ion).
March 30: Announced that it wil spend 80 bil ion shekels ($22 bil ion) to help the Announced that it wil spend 80 bil ion shekels ($22 bil ion) to help the
economy weather the COVID-19 crisis—70 bil ion shekels in addition to 10 bil ion economy weather the COVID-19 crisis—70 bil ion shekels in addition to 10 bil ion
already promised to boost welfare services for those who have lost their jobs or are already promised to boost welfare services for those who have lost their jobs or are
on unpaid leave and to assist the private sector. It includes a 20-bil ion-shekel social on unpaid leave and to assist the private sector. It includes a 20-bil ion-shekel social
safety net, with stipends for those who lost income; 40 bil ion shekels earmarked to safety net, with stipends for those who lost income; 40 bil ion shekels earmarked to
assist businesses with tax breaks, loans, and other services; about 10 bil ion for the assist businesses with tax breaks, loans, and other services; about 10 bil ion for the
healthcare system; and nearly 8 bil ion wil be spent to speed up the recovery. healthcare system; and nearly 8 bil ion wil be spent to speed up the recovery.
Italy
Government of Italy
March 11: Announced two packages worth 25 bil ion euros ($28.3 bil ion): A Announced two packages worth 25 bil ion euros ($28.3 bil ion): A
package worth 12 bil ion euros wil provide extra funding for the health system as package worth 12 bil ion euros wil provide extra funding for the health system as
well as a mix of measures to help companies and households, including freezing tax well as a mix of measures 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 remainder wil be a reserve to pay for any further measures. The government The remainder wil be a reserve to pay for any further measures. The government
also indicated that payments on mortgages wil be suspended across Italy. ABI, Italy’s also indicated that payments on mortgages wil be suspended across Italy. ABI, Italy’s
banking lobby, said lenders would offer debt moratoriums to small firms and banking lobby, said lenders would offer debt moratoriums to small firms and
households grappling with the economic fallout from the virus. households grappling with the economic fallout from the virus.
April 6: Announced a new emergency decree aimed at granting liquidity and bank Announced a new emergency decree aimed at granting liquidity and bank
loans worth more than 400 bil ion euros to companies hit by COVID-19. The new loans worth more than 400 bil ion euros to companies hit by COVID-19. The new
legislation, combined with a previous stimulus package in March, would allow banks legislation, combined with a previous stimulus package in March, would allow 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 limit of annual purchases of Announced that it would (1) double its upper limit of annual purchases of
exchange traded funds to 12 tril ion yen ($112.46 bil ion) and of real-estate exchange traded funds to 12 tril ion yen ($112.46 bil ion) and of real-estate
investment trusts to 180 bil ion yen ($1.7 bil ion) per year, (2) expand its upper limit investment trusts to 180 bil ion yen ($1.7 bil ion) per year, (2) expand its upper limit
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of its corporate bond balance and commercial paper balance by 1 tril ion yen ($9.5 of its corporate bond balance and commercial paper balance by 1 tril ion yen ($9.5
bil ion) each, and (3) start a lending program for commercial banks, providing them bil ion) each, and (3) start a lending program for commercial banks, providing them
with one-year loans in exchange for corporate col ateral worth 8 tril ion yen ($75.6 with one-year loans in exchange for corporate col ateral worth 8 tril ion yen ($75.6
bil ion). bil ion).
Government of Japan
February 13: Unveiled a set of measures worth 15.3 bil ion yen ($140 mil ion) to Unveiled a set of measures worth 15.3 bil ion yen ($140 mil ion) 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 small businesses hit hard by the virus outbreak. for small businesses hit hard by the virus outbreak.
March 10: Unveiled a second package of measures totaling 430.8 bil ion yen ($4.1 Unveiled a second package of measures totaling 430.8 bil ion yen ($4.1
bil ion) in spending to cope with the fallout of the COVID-19 outbreak (focusing on bil ion) in spending to cope with the fallout of the COVID-19 outbreak (focusing on
support to small and mid-sized firms) and boosted to 1.6 tril ion yen ($15.1 bil ion) its support to small and mid-sized firms) and boosted to 1.6 tril ion yen ($15.1 bil ion) its
special financing for small- and mid-size firms hit by the virus, up from 500 bil ion yen. special financing for small- and mid-size firms hit by the virus, up from 500 bil ion yen.
March 23: Announced that it is working on a package of measures to combat the Announced that it is working on a package of measures to combat the
widening economic fallout from the COVID-19 that wil involve direct fiscal spending widening economic fallout from the COVID-19 that wil involve direct fiscal spending
exceeding 15 tril ion yen ($137 bil ion). Including loans and other steps that does not exceeding 15 tril ion yen ($137 bil ion). Including loans and other steps that does not
include direct spending, the size of the package may exceed 30 tril ion yen. include direct spending, the size of the package may exceed 30 tril ion yen.
April 6: Announced a 108 tril ion yen ($989 bil ion, equivalent to 20% of gross Announced a 108 tril ion yen ($989 bil ion, equivalent to 20% of gross
domestic product) stimulus package, Japan’s largest ever, to rescue the COVID-19-hit domestic product) stimulus package, Japan’s largest ever, to rescue the COVID-19-hit
economy. It wil include cash handouts worth 6 tril ion yen for households and small economy. It wil include cash handouts worth 6 tril ion yen for households and small
businesses hit by the virus and offers businesses deferrals on tax and social service businesses hit by the virus and offers businesses deferrals on tax and social service
costs worth 26 tril ion yen. The first phase of the package aims to stop job losses and costs worth 26 tril ion yen. The first phase of the package aims to stop job losses 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 economic growth. boosting economic growth.

Government of Kazakhstan
March 23: The president ordered state-owned companies to start selling part of The president ordered state-owned companies to start selling part of
their foreign currency revenue on the domestic market to support the local tenge their foreign currency revenue on the domestic market to support the local tenge
currency (and to pay out up to 100% of last year’s profits in dividends) in order to currency (and to pay out up to 100% of last year’s profits in dividends) in order 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 small- and He also ordered a standstil on bank loan repayments by individuals and small- and
medium-sized businesses for the duration of the state of emergency, announced that medium-sized businesses for the duration of the state of emergency, 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, was delaying tax payments for small businesses, and stood their source of income, was delaying tax payments for small businesses, and stood
ready to more than triple spending on a program to provide temporary employment ready to more than triple spending on a program to provide temporary employment
through infrastructure maintenance and construction projects. Together with soft through infrastructure maintenance and construction projects. Together with soft
loan program and other spending, the volume of the stimulus package is expected to loan program and other spending, the volume 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 to Announced that it plans to borrow $3 bil ion on foreign capital markets to
finance its budget deficit this year, due to the col apse in energy prices and the finance its budget deficit this year, due to the col apse in energy prices and the
additional stimulus spending amid the COVID-19 outbreak. additional stimulus 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 reserve ratio for commercial banks to 4.25% from 5.25%. The move to the cash reserve ratio for commercial banks to 4.25% from 5.25%. The move to
lower the cash ratio is expected to release an extra 35.2 bil ion shil ings ($330.83 lower the cash ratio is expected to release an extra 35.2 bil ion shil ings ($330.83
mil ion) for banks to lend to customers trying to deal with the outbreak. mil ion) for banks to lend to customers trying to deal with the outbreak.

Government of Kenya
March 16: The World Bank announced that it is making $60 mil ion available to The World Bank announced that it is making $60 mil ion 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 emergency assistance from the IMF of up to Announced that it wil seek emergency assistance from the IMF of up to
$350 mil ion, and $750 mil ion from the World Bank, release 49 bil ion shil ings ($460 $350 mil ion, and $750 mil ion from the World Bank, release 49 bil ion shil ings ($460
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mil ion) to pay pending bil s to suppliers, and expedite the payment of close to 10 mil ion) to pay pending bil s to suppliers, and expedite the payment of close to 10
bil ion ($94 mil ion) shil ings in value-added tax refunds to businesses in the next two bil ion ($94 mil ion) shil ings in value-added tax refunds to businesses 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 16% Announced that the value-added tax rate would be cut to 14% from 16%
and corporation tax would be reduced to 25% from 30% under plans scheduled to and corporation tax would be reduced to 25% from 30% under plans scheduled to
come into force by April, and that there would be 100% tax relief for Kenyans come into force by April, and that there would be 100% tax relief for Kenyans
earning a monthly income of up to 24,000 Kenyan Shil ings ($226) to increase their earning a monthly income of up to 24,000 Kenyan Shil ings ($226) to increase 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, and one-month repo rates to 1%, 1.25%, and 1.75%, respectively. week, and one-month repo rates to 1%, 1.25%, and 1.75%, respectively.
April 2: Announced a stimulus package to support vital sectors and small and Announced a stimulus package to support vital sectors and small and
medium enterprises (SMEs) amid the fallout from the COVID-19 pandemic. It cut medium enterprises (SMEs) amid the fallout from the COVID-19 pandemic. It cut
capital adequacy requirements by 2.5%, eased the risk weighting for SMEs to 25% capital adequacy requirements by 2.5%, eased the risk weighting for SMEs to 25%
from 75%, raised the maximum lending limit to 100% from 90%, and increased the from 75%, raised the maximum lending limit to 100% from 90%, and increased the
maximum financing for residential real estate developments to the value of the maximum financing for residential real estate developments to the value of the
property or the cost of development. The measures are expected to raise banks’ property or the cost of development. The measures are expected to raise 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 aimed at shoring up its economy against the pandemic, Announced measures aimed at shoring up its economy against the pandemic,
including soft long-term loans from local banks to provide liquidity for small and including soft long-term loans from local banks to provide liquidity for small and
medium-sized enterprises and directing government agencies to pay obligations to the medium-sized enterprises 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 Package 2020” to mitigate the Announced the “Economic Stimulus Package 2020” to mitigate the
economic impact of COVID-19, improve the cash flow of affected businesses, economic impact of COVID-19, improve the cash flow of affected businesses,
stimulate private consumption, and accelerate domestic investment activities. It stimulate private consumption, and accelerate domestic investment activities. It
includes exempting accommodation services from services tax, providing sales tax includes exempting accommodation services from services tax, providing sales tax
exemptions, and lifting duties on certain imports. exemptions, and lifting duties on certain imports.
March 27: Announced a stimulus package worth 250 bil ion ringgit ($58.28 bil ion), Announced a stimulus 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
families and business owners; one-off payments and discounts on utilities for people families and business owners; one-off payments and discounts on utilities for people
whose livelihoods have been affected; 1 bil ion ringgit for a food security fund; and a whose livelihoods have been affected; 1 bil ion ringgit for a food security fund; and a
50 bil ion ringgit loan scheme for larger companies, which wil offer guarantees of up 50 bil ion ringgit loan scheme for larger companies, 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
domestic economy. domestic 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: Lowered its benchmark interest rate by 50 basis points to 6.50% in an Lowered 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, reduced the rates out-of-cycle cut in a bid to support the country’s financial markets, reduced the rates
on its additional ordinary liquidity facility, and cut by 50 bil ion pesos ($2.06 bil ion) on its additional ordinary liquidity facility, and cut by 50 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 rate by 100 basis points to 4.50%, citing the domestic Cut its main interest 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 time in March to 3.25% from Cut its main interest rate for the second time in March to 3.25% from
4.50% in order to support banking system amid markets volatility due to the COVID-4.50% in order to support banking system amid markets volatility 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 response to increased uncertainties in connection with the spread of 10.0% in response to increased uncertainties in connection with the spread of
COVID-19. It also lowered the reserve requirement on banks. COVID-19. It also lowered the reserve requirement on banks.
Morocco
March 15: Morocco’s King Mohammed VI ordered the creation of a 10 bil ion- Morocco’s 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
sectors such as tourism, maintain jobs, and mitigate the social repercussions of the sectors such as tourism, maintain jobs, and mitigate the social repercussions of the
outbreak. outbreak.
March 17: Bank Al-Maghrib (Central Bank of the Kingdom of Morocco) cut its Bank Al-Maghrib (Central Bank of the Kingdom of Morocco) 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 small and medium Announced that it would expand loan guarantees for small and medium
sized enterprises, from 50% to 75%. sized enterprises, from 50% to 75%.
March 12: The Tax Authority wil al ow companies affected by COVID-19 to defer The Tax Authority wil al ow companies affected by COVID-19 to defer
income, corporate, turnover, and wage taxes for the time being. income, corporate, turnover, and wage taxes for the time being.
March 17: Announced measures to support companies, ranging from tax Announced measures to support companies, ranging from tax
exemptions to having up to 90% of wages lost for work hour reductions paid by the exemptions to having up to 90% of wages lost for work 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 record low of 0.25%, and Cut the official cash rate by 75 basis points to a record 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 ($17 bil ion) of Announced that it wil purchase up NZ$30 bil ion ($17 bil ion) of
government bonds in the secondary market over the next 12 months. It wil seek to government bonds in the secondary market over the next 12 months. It wil seek to
buy NZ$750 mil ion bonds a week across a range of maturities, via an auction buy NZ$750 mil ion bonds a week across a range of maturities, 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 tools to provide additional Announced that it was deploying more 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 weekly Open Market Operation—to be held each Tuesday—of the pandemic. A new weekly Open Market Operation—to be held each Tuesday—
wil provide liquidity in exchange for eligible corporate and asset-backed securities by wil provide liquidity in exchange for eligible corporate and asset-backed securities by
offering up to NZ$500 mil ion ($300 mil ion) for terms out to approximately three offering up to NZ$500 mil ion ($300 mil ion) for terms 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 ion wil go toward wage subsidies for businesses, economy; approximately NZ$5 bil ion wil go toward wage subsidies for businesses,
NZ$2.8 bil ion toward income support, NZ$2.8 bil ion in business tax relief, and NZ$2.8 bil ion toward income support, NZ$2.8 bil ion in business tax relief, and
NZ$600 mil ion toward the airline industry. NZ$600 mil ion toward the airline industry.
March 24: Announced that retail banks wil offer a six-month principal and interest Announced that retail banks wil offer a six-month principal and interest
payment holiday for mortgage holders and small business customers whose incomes payment holiday for mortgage holders and small business customers whose incomes
have been affected by the economic disruption from COVID-19. The government and have been affected by the economic disruption from COVID-19. The government and
the banks wil also implement a NZ$6.25 bil ion ($3.62 bil ion) Business Finance the banks wil also implement a NZ$6.25 bil ion ($3.62 bil ion) Business Finance
Guarantee Scheme for small and medium-sized businesses. It wil include a limit of Guarantee Scheme for small and medium-sized businesses. It wil include a limit of
NZ$500,000 per loan and wil apply to firms with a turnover of between NZ$500,000 per loan and wil apply to firms with a turnover of between
NZ$250,000 and NZ$80 mil ion per annum (the government wil carry 80% of the NZ$250,000 and NZ$80 mil ion per annum (the government wil carry 80% of the
credit risk, with the other 20% to be carried by the banks). credit risk, 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 to counter the Cut its key interest rate to 1% from 1.5%, as it seeks to counter the
economic impact of the COVID-19 pandemic. It indicated that it would offer funding economic impact of the COVID-19 pandemic. It indicated that it would offer funding
to banks to help counter the volatility in financial markets and announced that banks’ to banks to help counter the volatility in financial markets 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
alleviate the economic impact from the COVID-19 outbreak. It also offered a third alleviate the economic impact from 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 ion and 85 bil ion Norwegian crowns ($6.68 bil ion-$8.11 bil ion) from an 70 bil ion and 85 bil ion Norwegian crowns ($6.68 bil ion-$8.11 bil ion) from an
original plan of 55 bil ion crowns, fol owing the government’s decision to offer loans original plan of 55 bil ion crowns, fol owing the government’s 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 increase further its daily purchase of Norwegian currency to 2 bil ion Wil increase further its daily purchase of Norwegian currency to 2 bil ion
crowns ($190 mil ion) per day from 1.6 bil ion crowns in order to make funds crowns ($190 mil ion) per day from 1.6 bil ion crowns in order to make funds
available for the government’s fiscal budget. (On March 18, it announced that it would available for the government’s fiscal budget. (On March 18, it announced that it would
increase it to 1.6 bil ion Norwegian crowns per day from 500 mil ion crowns.) increase it to 1.6 bil ion Norwegian crowns per day from 500 mil ion crowns.)

Government of Norway
March 13: Announced that it would pay a greater part of the bil for all companies Announced that it would pay a greater part of the bil for all companies
seeking to make temporary layoffs, suspended all airport fees for the first six months seeking to make temporary layoffs, suspended all airport fees for the first six months
of 2020, and lifted for a period of 10 months the tax charged for each passenger. of 2020, and lifted for a period of 10 months the tax charged for each passenger.
March 15: Announced that it would offer companies at least 100 bil ion Norwegian Announced that it would offer companies at least 100 bil ion Norwegian
crowns ($9.7 bil ion) in funding in the form of loan guarantees (50 bil ion crowns to crowns ($9.7 bil ion) in funding in the form of loan guarantees (50 bil ion crowns to
small and medium sized companies seeking bank loans) and bond issues (50 bil ion small and medium sized companies seeking bank loans) and bond issues (50 bil ion
crowns to large firms issuing corporate bonds). In addition, payments of payrol taxes crowns to large firms issuing corporate bonds). In addition, payments of payrol taxes
wil be postponed. wil be postponed.
March 20: Presented legislation that would temporarily reduce the value-added tax, Presented legislation that would temporarily reduce the value-added tax,
postpone tax filing deadlines and add worker and business protections under a 280 postpone tax filing deadlines and add worker and business protections under a 280
bil ion kroner ($24 bil ion) plan to boost the economy amid the pandemic. Along with bil ion kroner ($24 bil ion) plan to boost the economy amid the pandemic. Along with
the tax provisions, the legislative package includes two previously announced lending the tax provisions, the legislative package includes two previously announced lending
programs that the government said would provide up to 100 bil ion kroner in support programs that the government said would provide up to 100 bil ion kroner in support
for Norwegian businesses, improving their access to credit to ensure liquidity. for Norwegian businesses, improving their access to credit to ensure liquidity.
March 27: Proposed new measures to support businesses hit by the viral outbreak Proposed new measures to support businesses hit by the viral outbreak
and a sharp fall in the price of oil. They include, among other things, covering fixed and a sharp fall in the price of oil. 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 ion to $1.92 bil ion) per month for two months. bil ion Norwegian crowns ($958 mil ion to $1.92 bil ion) per month for two months.
Oman
March 18: The Central Bank of Oman announced that it wil provide about 8 bil ion The Central Bank of Oman announced that it wil provide about 8 bil ion
Omani rials ($20.8 bil ion) in extra liquidity to banks as one of several measures Omani rials ($20.8 bil ion) in extra liquidity to banks as one of several measures
aimed at supporting the economy. It also asked banks to cut banking fees, adjust aimed at supporting the economy. It also asked banks to cut banking fees, adjust
capital and credit ratios, allow repayment postponements for up to six months, and capital and credit ratios, allow 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 to the Cut its key interest rate by 75 basis points to 12.50% in response 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) for investment in the offering a new package of 100 bil ion rupees ($630.5 mil ion) for investment in the
manufacturing sector to fund investors at 7% for 10 years., and announced that it manufacturing sector to fund investors at 7% for 10 years., and announced that it
would refinance banks to provide 5 bil ion rupees ($31.5 mil ion) at a maximum of 3% would refinance banks to provide 5 bil ion rupees ($31.5 mil ion) at a maximum 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 in a week, lowering Cut its benchmark interest rate for the second time in a week, lowering
it by 150 basis points to 11% amid considerable uncertainty about how the COVID-it by 150 basis points to 11% amid 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 package of more than 1 tril ion rupees ($6.3 Announced a financial-relief package of more than 1 tril ion rupees ($6.3
bil ion) to support the economy and poorer workers. It wil include help to the bil ion) to support the economy and poorer workers. It wil include help to the
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export and industry sectors, tax breaks, procurement of medical and other export and industry sectors, tax breaks, procurement of medical and other
equipment required to fight the pandemic, and the distribution of a monthly cash equipment required 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
series of measures aimed at dealing with the impact of the COVID-19 outbreak. series of measures aimed at dealing with the impact of the COVID-19 outbreak.
Banks’ reserve requirements wil also be reduced to help the financial sector Banks’ reserve requirements wil also be reduced to help the financial sector
refinance debts. refinance debts.

Government of Paraguay
March 13: Announced tax relief measures, as well as $150 mil ion of credit lines in Announced tax relief measures, as well as $150 mil ion of credit lines in
state banks and loans from multilateral agencies. state banks and loans from multilateral 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 economic impact of the COVID-19 pandemic and announced that, if to counter the economic impact of the COVID-19 pandemic and announced that, if
necessary, could employ other additional liquidity injection instruments to alleviate necessary, could employ other additional liquidity injection instruments to alleviate
the crisis. the crisis.
March 29: Announced that that as part of the 90 bil ion soles stimulus plan Announced that that as part of the 90 bil ion soles stimulus plan
announced on March 29, the Bank would inject 30 bil ion soles into banks for loans to announced on March 29, the Bank would inject 30 bil ion soles into banks for loans to
mainly smaller companies to help cover their working capital. mainly smaller companies to help cover their working capital.
April 2: Announced that it is preparing a major bond issuance to help underwrite an Announced that it is preparing a major bond issuance to help underwrite an
unprecedented stimulus package to counter the economic impact of the fast-unprecedented stimulus package to counter the economic impact of the fast-
spreading pandemic. spreading pandemic.

Government of Peru
March 29: Announced that it is planning an economic stimulus package worth Announced that it is planning an economic stimulus package worth
around 90 bil ion soles ($26.41 bil ion or 12% of gross domestic product) to support around 90 bil ion soles ($26.41 bil ion or 12% of gross domestic product) to support
citizens and the key mining sector that have been impacted by COVID-19. It wil have citizens and the key mining sector that have been impacted by COVID-19. It wil have
three phases of 30 bil ion soles each: containing the disease, ensuring companies’ three phases of 30 bil ion soles each: containing the disease, 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 reverse repurchase facility by 50 basis Cut the rate on its overnight reverse 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 reserves and single borrower reporting by banks, calculations of penalties on required reserves and single borrower
limits, and approved a temporary reduction to zero of the term spread on limits, and approved a temporary reduction to zero of the term spread on
rediscounting loans relative to the overnight lending rate. rediscounting loans relative 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-term securities under a repurchase agreement with the Bureau of the worth of short-term securities under a repurchase agreement with the Bureau of the
Treasury in a bid to inject a fresh round of liquidity into the market and to keep a lid Treasury in a bid to inject a fresh round of liquidity into the market 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 requirement ratio Announced a 200 basis points reduction in the reserve requirement ratio
(RRR) to calm financial markets and boost lending. The cut, effective March 30, wil (RRR) to calm financial markets 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 Service Insurance System and the Social Instructed the Government Service Insurance System 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
market by at least doubling their daily average purchase volumes" from 2019. market by at least doubling their daily average purchase volumes" 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 relief to affected sectors. COVID-19 pandemic and provide economic relief to affected sectors.
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March 17: The Philippine Stock Exchange halted all stock, bond and currency trading The Philippine Stock Exchange halted all 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
economic powerhouse, under “enhanced community quarantine”. economic powerhouse, under “enhanced community quarantine”.
March 22: The Philippine Congress is reportedly drafting a stimulus package of at The Philippine Congress 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 lowered its lombard rate to 1.50% from response to the COVID-19 pandemic; it also lowered its lombard 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-market operations. bonds as part of its open-market operations.

Government of Poland
March 18: Announced an economic stimulus package of 212 bil ion zloty ($52 bil ion, Announced an economic stimulus package of 212 bil ion zloty ($52 bil ion,
or approximately 9% of gross domestic product) to assist entrepreneurs and or approximately 9% of gross domestic product) to assist entrepreneurs and
employees during the COVID-19 crisis. It consists of 5 pil ars: employee safety, employees during the COVID-19 crisis. It consists of 5 pil ars: employee safety,
company financing, health protection, strengthening the financial system, and a public company financing, health protection, strengthening the financial system, and a public
investment program. Specific measures include holidays in debt repayments and social investment program. Specific measures include holidays in debt repayments and social
contributions, loan guarantees, as well as payments of salaries to those unable to contributions, loan guarantees, as well as payments of salaries to those unable to
work. work.
March 26: Announced that the state bank BGK wil issue bonds worth around 16 Announced that the state bank BGK wil 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. The state wil buy the bonds back in 2021-2025, coronavirus impact on the economy. The state wil buy the bonds back in 2021-2025,
spending around 2.5 bil ion zlotys a year in the first year and then around 3.7 bil ion spending around 2.5 bil ion zlotys a year in the first year and then around 3.7 bil ion
zlotys annually. zlotys annually.
Portugal
Government of Portugal
March 13: Announced a 2.3 bil ion-euro package that wil include delaying some tax Announced a 2.3 bil ion-euro package that wil include delaying some tax
payments and granting soft loans. Companies wil be allowed to suspend social payments and granting soft loans. Companies wil be allowed to suspend social
security payments and maintain employees’ contracts with payments equal to two-security payments and maintain employees’ contracts with payments equal to two-
thirds of salaries, funded largely by the state, and workers who have to stay at home thirds of salaries, funded largely by the state, and workers who have to stay at home
to care for school children of up to 12 years of age wil receive 66% of their base to care for school children of up to 12 years of age wil receive 66% of their base
salaries. salaries.
March 18: Announced a 9.2 bil ion-euro package to support workers and provide Announced a 9.2 bil ion-euro package to support workers 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, 3 bil ion in state-backed credit guarantees, and 1 bil ion euros in fiscal stimulus, 3 bil ion in state-backed credit guarantees, and 1 bil ion
related to social security payments. (Just over half of the 3 bil ion euros in credit lines related to social security payments. (Just over half of the 3 bil ion euros in credit lines
announced is aimed at companies working in tourism, hotels and restaurants. The announced is aimed at companies working in tourism, hotels and restaurants. The
other half goes to industries like textiles, clothing and wood. Around a third is set other half goes to industries like textiles, clothing and wood. Around a third is set
aside for micro and small enterprises.) aside for micro and small 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 measures to shield the economic The Emir of Qatar announced several measures to shield the economic
and financial sectors in the country from the impact of the COVID-19, including: (1) and financial sectors in the country from the impact of the COVID-19, including: (1)
allocating 75 bil ion Qatari riyals ($20.6 bil ion) to support and provide financial and allocating 75 bil ion Qatari riyals ($20.6 bil ion) to support and provide financial and
economic incentives in the private sector, (2) directing the Central Bank of Qatar to economic incentives in the private sector, (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 mechanism to encourage banks to postpone loan installments and appropriate mechanism to encourage banks to postpone loan installments and
obligations of the private sector with a grace period of six months, (3) directing the obligations of the private sector with a grace period of six months, (3) directing the
Qatar Development Bank to postpone the installments for all borrowers for a period Qatar Development Bank to postpone the installments for all borrowers for a period
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of six months, (4) directing the government to increase its investments in the stock of six months, (4) directing the government to increase its investments in the stock
exchange by 10 bil ion Qatari riyals ($2.75 bil ion), (5) exempting food and medical exchange by 10 bil ion Qatari riyals ($2.75 bil ion), (5) exempting food and medical
goods from customs duties for a period of six months, and (6) exempting the various goods from customs duties for a period of six months, and (6) exempting the various
sectors of the economy from electricity and water fees for a period of 6 months. sectors of the economy from electricity 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 economic fallout from the COVID-19 outbreak. It points to 2.0% in order to curb the economic fallout from the COVID-19 outbreak. It
also cut its lending rate facility to 2.50% from 3.50% and wil provide liquidity to banks also cut its lending rate facility to 2.50% from 3.50% and wil 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 Authority
March 15: Announced that it had prepared a 50 bil ion riyal ($13.32 bil ion) package Announced that it had prepared a 50 bil ion riyal ($13.32 bil ion) package
to help small and medium-sized enterprises cope with the economic impacts of to help small and medium-sized enterprises cope with the economic impacts of
COVID-19; it also lowered by 75 basis points both its repo rate to 1%, and its COVID-19; it also lowered by 75 basis points both its repo rate to 1%, and its
reverse repo rate to 0.5%. reverse repo rate to 0.5%.

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

Government of Serbia
March 29: Announced that it plans to offer about 5 bil ion euros ($5.54 bil ion) in Announced that it plans to offer about 5 bil ion euros ($5.54 bil ion) in
loans and subsidies to businesses to help them cope with the economic impact of loans and subsidies to businesses to help them cope with the economic impact of
COVID-19 and make a one-time payment of 100 euros to every citizen older than COVID-19 and make a one-time payment of 100 euros to every citizen older than
18. The president indicated that the state would use 700 mil ion euros to pay 18. The president indicated that the state would use 700 mil ion euros to pay
minimum wages of 30,367 dinars ($288.58) and allow tax delays for micro and small minimum wages of 30,367 dinars ($288.58) and allow tax delays for micro and small
enterprises for the three months after the end of the state of emergency to avoid job enterprises for the three months after the end of the state of emergency to avoid job
loss. loss.
Seychelles
March 24: The Central Bank of Seychelles cut its monetary policy rate by 100 basis The Central Bank of Seychelles cut its monetary policy rate by 100 basis
points to 4.0%, indicating that this was the first phase of its response to the challenge points to 4.0%, indicating that this was the first phase of its response to the challenge
from the spread of the COVID-19, which is expected to lower this year’s earnings from the spread of the COVID-19, which is expected to lower this year’s earnings
from tourism by 70% and trigger a double-digit drop in economic growth. from tourism by 70% and trigger a double-digit drop in economic growth.
Singapore
Monetary Authority of Singapore
March 30: Announced that it would adopt a 0% per annum rate of appreciation of Announced that it would adopt a 0% per annum rate of appreciation of
the policy band starting at the prevailing level of the Singapore Dol ar Nominal the policy band starting at the prevailing level of the Singapore Dol ar Nominal
Effective Exchange Rate (S$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 ion to fight and contain the disease, the COVID-19 outbreak, including $575 mil ion to fight and contain the disease,
mainly through healthcare funding, and 4 bil ion in economic stimulus measures to mainly through healthcare funding, and 4 bil ion in economic stimulus measures to
manage its impact on businesses, jobs and households. manage its impact on businesses, jobs and households.
March 26: Unveiled stimulus plan worth around S$48 bil ion ($33.7 bil ion) to deal Unveiled stimulus plan worth around S$48 bil ion ($33.7 bil ion) to deal
with the economic fallout from COVID-19 (of which S$17 bil ion wil be drawn from with the economic fallout from COVID-19 (of which S$17 bil ion wil be drawn from
the national reserves). A key part of the stimulus package involves ramping up a jobs the national reserves). A key part of the stimulus package involves ramping up a jobs
support scheme first announced in February. The government wil now offset up to support scheme first announced in February. The government wil now offset up to
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25% of the first S$4,600 of workers’ monthly wages for a nine-month period (up from 25% of the first S$4,600 of workers’ 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
workers wil be eligible to receive monthly payments of S$1,000 for nine months. workers wil be eligible to receive monthly payments of S$1,000 for nine months.
Some hard-hit sectors wil receive additional support: the government would offset Some hard-hit sectors wil receive additional support: the government would offset
up to 50% of wages in the food services sector and up to 75% of wages in the aviation up to 50% of wages in the food services sector and up to 75% of wages in the aviation
and tourism sectors. A previously announced cash payout to all adult Singaporeans and tourism sectors. A previously announced cash payout to all adult Singaporeans
would be tripled and low-income families wil also receive grocery vouchers. would be tripled and low-income families wil also receive 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 firms and employees hurt by the pandemic. Under the plan, the state would (1) help firms and employees hurt by the pandemic. Under the plan, the state would (1)
pay 80% of wages for employees at firms forced to shut, (2) help self-employed pay 80% of wages for employees at firms forced to shut, (2) help self-employed
people and employees in firms that suffer falling revenue, with payments linked to the people and employees in firms that suffer falling revenue, with payments linked to the
size of the revenue drop, (3) allow employers to postpone their contributions to size of the revenue drop, (3) allow employers to postpone their contributions to
state social and health systems and delay some tax payments if they suffer a 40% drop state social and health systems and delay some tax payments if they suffer a 40% drop
in revenue; (4) allow firms to offset accumulated losses from past years going back to in revenue; (4) allow firms to offset accumulated losses from past years going back to
2014 against corporate income tax, and (5) offer firms bank guarantees of up to 500 2014 against corporate income tax, and (5) offer firms bank guarantees of up to 500
mil ion euros a month.mil ion euros 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 to inject liquidity into local markets, including Announced measures to inject liquidity into local markets, including
intraday overnight supplementary repos to provide liquidity support to clearing banks, intraday overnight supplementary repos to provide liquidity support to clearing banks,
lowering the standing facilities’ borrowing rate by 100 basis points to 200 basis point lowering the standing facilities’ borrowing rate by 100 basis points to 200 basis point
below the benchmark repo rate, and lowering the standing facilities’ lending rate to below the benchmark repo rate, and lowering the standing facilities’ lending rate to
the repo rate from the previous rate of repo plus 100 basis points. the repo rate from the previous 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 emergency policy measures aimed at easing a government bonds as part of additional emergency policy measures aimed at easing a
severe liquidity crunch triggered by the COVID-19. severe 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 lowered borrowing costs for the bank’s low interest rate loan programs and also lowered borrowing costs for the bank’s low interest rate loan programs and
relaxed col ateral rules of its repurchasing operations, to ensure companies can easily relaxed col ateral rules of its repurchasing operations, 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 ion won Announced that it wil buy government bonds worth 1.5 tril ion won
($1.2 bil ion) to bolster liquidity in the bond market and back short-term liquidity in ($1.2 bil ion) to bolster liquidity in the bond market and back short-term liquidity in
banks under increased loan demand due to fallout from COVID-19. banks under increased loan demand due to fallout from COVID-19.

Government of the Republic of Korea
March 3: Announced a 11.7 tril ion won ($9.8 bil ion) stimulus package that includes Announced a 11.7 tril ion won ($9.8 bil ion) stimulus package that includes
funding for medical institutions and quarantine efforts, assistance to small- to funding for medical institutions and quarantine efforts, assistance to small- to
medium-sized businesses struggling to pay wages to their workers, and subsidies for medium-sized businesses struggling to pay wages to their workers, and subsidies for
child care. child care.
March 17: The National Assembly approved a supplementary budget worth 11.7 The National Assembly approved a supplementary budget worth 11.7
tril ion won ($9.4 bil ion) to help contain COVID-19 and cushion the economic tril ion won ($9.4 bil ion) to help contain COVID-19 and cushion the economic
fallout. The government has indicated that it plans to execute at least 75% of its fallout. 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 won ($40 bil ion) in emergency financing for small Pledged 50 tril ion won ($40 bil ion) in emergency financing for small
businesses and other stimulus measures to help the economy. Some highlights of the businesses and other stimulus measures to help the economy. Some highlights of the
package include 12 tril ion won in low-interest financing for small firms, 5.5 tril ion package include 12 tril ion won in low-interest financing for small firms, 5.5 tril ion
won in loan guarantees, easing loan terms and suspending interest payments for small won in loan guarantees, easing loan terms and suspending interest payments for small
businesses. The Bank of Korea reportedly wil actively provide liquidity support for businesses. The Bank of Korea reportedly wil 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 financial authorities and local banks agreed to set up a South Korea’s financial authorities and local banks agreed to set up a
bond market stabilization fund worth more than 10 tril ion won ($7.9 bil ion) as part bond market stabilization fund worth more than 10 tril ion won ($7.9 bil ion) as part
of the country’s efforts to calm financial markets roiled by the spread of COVID-19. of the country’s efforts to calm financial markets roiled by the spread of COVID-19.
March 24: Announced that it would double the planned economic rescue package Announced that it would double the planned economic rescue package
announced on March 18 to 100 tril ion won ($80 bil ion) to save companies hit by the announced on March 18 to 100 tril ion won ($80 bil ion) to save companies hit by the
COVID-19 and put a floor under crashing stocks and bond markets. It includes 29.1 COVID-19 and put a floor under crashing stocks and bond markets. It includes 29.1
tril ion won in loans to small- and medium-sized companies and 20 tril ion won wil be tril ion won in loans to small- and medium-sized companies and 20 tril ion won wil be
used to buy corporate bonds and commercial paper of companies facing a credit used to buy corporate bonds and commercial paper of companies facing a credit
crunch. As part of the rescue package, the Financial Services Commission wil crunch. As part of the rescue package, the Financial Services Commission wil
establish a 10.7 tril ion won facility set up to stabilize stock markets. It wil also establish a 10.7 tril ion won facility set up to stabilize stock markets. It wil also
commence a bond buying facility in April that wil be funded by 84 institutions, commence a bond buying facility in April that wil be funded by 84 institutions,
including the Bank of Korea, commercial banks and insurers. including the Bank of Korea, commercial banks and insurers.
March 29: Announced that an “emergency disaster relief payment” of up to 1 mil ion Announced that an “emergency disaster relief payment” of up to 1 mil ion
won ($820) would be made to all households (except the top 30% by income), won ($820) would be made to all households (except the top 30% by income),
totaling some 9.1 tril ion won ($7.44 bil ion). It is also preparing another extra budget totaling some 9.1 tril ion won ($7.44 bil ion). It is also preparing another extra budget
worth 7.1 tril ion won ($5.80 bil ion) for parliamentary approval in April, and will worth 7.1 tril ion won ($5.80 bil ion) for parliamentary approval in April, and will
exempt some small and medium-sized companies from paying utility bil s. exempt some small and medium-sized companies 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 regional authorities mitigate the economic impact from COVID-19, and help regional authorities mitigate the economic impact from COVID-19, and
announced a 1 bil ion euro contribution to the health ministry’s budget and 14 bil ion announced a 1 bil ion euro contribution to the health ministry’s budget and 14 bil ion
euros ($15.1 bil ion) in liquidity for small and medium companies (e.g., small euros ($15.1 bil ion) in liquidity for small and medium companies (e.g., small
businesses affected by the outbreak would be exempt from paying taxes for six businesses affected by the outbreak would be exempt from paying taxes for six
months). It also announced that it would open a 400 mil ion euro credit line to aid months). It also announced that it would open a 400 mil ion euro credit line to aid
the tourism industry. the tourism industry.
March 17: Unveiled a package of 200 bil ion euros ($219 bil ion) to mitigate the Unveiled a package of 200 bil ion euros ($219 bil ion) to mitigate the
effects of COVID-19 (117 bil ion euros wil be mobilized by the state, with the rest effects of COVID-19 (117 bil ion euros wil be mobilized 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, loans and aid for vulnerable people, a moratorium on mortgage payments companies, loans and aid for vulnerable people, a moratorium on mortgage payments
and evictions; the government wil also guarantee water, electricity and internet to and evictions; the government wil also guarantee water, electricity and internet to
for people adversely affected. for people adversely 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, and the Statutory Reserve Ratio (SRR) on all rupee deposit 7.25%, respectively, and the Statutory Reserve Ratio (SRR) on all rupee deposit
liabilities of licensed commercial banks was reduced by 1 percentage point to 4% liabilities of licensed commercial 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), its second such reduction in three weeks, in a move 6.00% and 7.00%, respectively), its second such reduction in three weeks, in a move
to support the economy amid the coronavirus pandemic. to support the economy amid the coronavirus 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 shore up credit flows as the epidemic wreaks havoc Swedish companies via banks to shore up credit flows as the epidemic wreaks havoc
on financial markets. on financial markets.
March 16: Announced that it would buy securities for up to an additional 300 bil ion Announced that it would buy securities for up to an additional 300 bil ion
Swedish crowns ($31 bil ion) in 2020 to facilitate credit supply and mitigate the Swedish crowns ($31 bil ion) in 2020 to facilitate credit supply and mitigate 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 ateral banks can use when point), and indicated that it would be flexible with the col ateral banks can use when
they borrow money from the Riksbank, giving lenders more scope to use mortgage they borrow money from the Riksbank, giving lenders more 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 more than 300 bil ion Swedish crowns ($31 Presented a package worth more 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
measures such as the central government assuming the ful cost for sick leave from measures such as the central government assuming the ful cost for sick 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, and allowing companies to put off paying tax and VAT redundancies due to the crisis, and allowing 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 since the Hiked its foreign currency interventions to their highest level since the
Brexit referendum in 2016 in an effort to stem the rise in the franc, which has Brexit referendum in 2016 in an effort to stem the rise in the franc, which has
appreciated as investors sought safe assets while stock markets have plunged during appreciated as investors sought safe assets while stock markets 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 and small businesses. It includes 8 bil ion francs for ($10.5 bil ion) for workers and small businesses. It includes 8 bil ion francs for
“Kurzarbeit,” or short-time work, and 580 mil ion francs in guaranteed bank loans. “Kurzarbeit,” or short-time work, and 580 mil ion 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 workers hit by the widening COVID-19 outbreak. The bulk of the companies and workers hit by the widening COVID-19 outbreak. The bulk of the
cash (20 bil ion francs) wil go into guarantees for bank loans to companies at “very cash (20 bil ion francs) wil go into guarantees for bank loans to companies at “very
modest” interest rates. Firms wil be able to get loans worth up to 10% of their modest” interest rates. Firms wil be able to get loans worth up to 10% of their
revenue, to a maximum of 20 mil ion francs. Amounts of 500,000 francs wil be paid revenue, to a maximum of 20 mil ion francs. Amounts of 500,000 francs wil be paid
out immediately and guaranteed by the government. The government’s short-time out immediately and guaranteed by the government. The government’s short-time
working scheme would also be extended to fixed-term, temporary workers, and working scheme would also be extended to fixed-term, temporary workers, and
trainees. The package fol ows one worth 10 bil ion francs announced on March 13, trainees. The package fol ows one worth 10 bil ion 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 to Announced that it is stepping up its funding plans in response to
government measures to cushion the economic impact of the pandemic, doubling the government measures to cushion the economic impact of the pandemic, doubling the
volume of outstanding short-term money market instruments. The Federal Finance volume of outstanding short-term money market instruments. The Federal Finance
Administration (FFA) wil increase the outstanding volume of short-term money Administration (FFA) wil increase the outstanding volume of short-term money
market instruments, from around 6 bil ion francs ($6.24 bil ion) to 12 bil ion francs, market instruments, from around 6 bil ion francs ($6.24 bil ion) to 12 bil ion francs,
and wil once again step up sales of its own Confederation bond holdings. and wil once again step up sales 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 small and medium sized companies T$200 bil ion ($6.6 bil ion) of financing to support small and medium 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 ($2 bil ion) package to help cushion the Approved a T$60 bil ion ($2 bil ion) package to help cushion the
impact of the COVID-19 outbreak on its export-reliant economy, including loans for impact of the COVID-19 outbreak on its export-reliant economy, including loans for
small businesses, subsidies for hard-hit tour agencies, tax cuts for tour bus drivers, small businesses, subsidies for hard-hit tour agencies, 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 ($1.33 bil ion) from the Announced that an additional T$40 bil ion ($1.33 bil ion) from the
Employment Stabilization Fund and the Tourism Development Fund would be Employment Stabilization Fund and the Tourism Development 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 ion in financing, and did not rule out further economic industry access T$50 bil ion 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, as the island’s bourse continues to fall on COVID-19 worries. the market, as the island’s bourse continues to fall 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 pressure on the Thai economy. COVID-19 exerted further pressure on the Thai economy.
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March 22: Together with the Ministry of Finance and the Securities and Exchange Together with the Ministry of Finance and the Securities and Exchange
Commission, announced three measures to address liquidity concerns and ensure the Commission, announced three measures to address liquidity concerns and ensure the
functioning of local financial markets: (1) setting up a special facility that allows functioning of local financial markets: (1) setting up a special facility that allows
commercial banks that purchase units in high-quality money market funds or daily commercial banks that purchase units in high-quality money market funds or daily
fixed-income funds to use them as col ateral for liquidity support (initial estimate is 1 fixed-income funds to use them as col ateral for liquidity support (initial estimate is 1
tril ion baht); (2) creation of a 70-100 bil ion baht “Corporate Bond Stabilization tril ion 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 over maturing corporate bonds, and (3) Bank of Thailand wil continue to rol over maturing corporate bonds, and (3) Bank of Thailand wil 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 package worth an estimated 400 bil ion baht ($12.74 Approved a stimulus package worth an estimated 400 bil ion baht ($12.74
bil ion) to help alleviate the impact of the COVID-19 outbreak. It includes 150 bil ion bil ion) to help alleviate the impact of the COVID-19 outbreak. It includes 150 bil ion
baht of soft loans, a 20 bil ion baht fund to help firms and workers affected, and tax baht of soft loans, a 20 bil ion baht fund to help firms and workers affected, and tax
benefits and support for utilities costs. benefits and support for utilities costs.
March 24: Approved a package of stimulus measures worth at least 117 bil ion baht Approved a package of stimulus measures 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
measures include cash handouts worth 45 bil ion baht for 3 mil ion workers outside measures include cash handouts worth 45 bil ion baht for 3 mil ion workers outside
the social security system; soft loans worth 60 bil ion baht; and tax breaks. Separately, the social security system; soft loans worth 60 bil ion baht; and tax breaks. Separately,
small firms wil be offered 10 bil ion baht of loans and business tax payments wil be small firms wil be offered 10 bil ion baht of loans and business tax payments wil be
delayed. delayed.
March 30: Announced that it is preparing a third stimulus package, worth more than Announced that it is preparing a third stimulus package, worth more than
500 bil ion baht ($15.3 bil ion), to alleviate the impact of the coronavirus crisis. 500 bil ion baht ($15.3 bil ion), to alleviate the impact of the coronavirus crisis.
March 31: Agreed to triple the number of workers receiving cash handouts to nine Agreed to triple the number of workers receiving cash handouts to nine
mil ion to help ease the impact of the spreading coronavirus. It had previously planned mil ion to help ease the impact of the spreading coronavirus. It had previously planned
to provide cash handouts of 15,000 baht ($458) each to 3 mil ion workers, taking the to provide cash handouts of 15,000 baht ($458) each to 3 mil ion workers, taking the
total to 45 bil ion baht ($1.38 bil ion). Now its total handout wil reach 135 bil ion total to 45 bil ion baht ($1.38 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 allow customers to defer loan payments for three months as part of a dividends and allow customers to defer loan payments for three months as part of a
package to ease the social and economic effects of the coronavirus. package to ease the social and economic effects of the coronavirus.

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

Government of Turkey
March 18: Unveiled a 100 bil ion-lira ($15.4 bil ion) plan to help businesses affected Unveiled a 100 bil ion-lira ($15.4 bil ion) plan to help businesses affected
by the COVID-19 pandemic. It includes measures from tax cuts and payment by the COVID-19 pandemic. It includes measures from tax cuts and payment
deferrals for businesses to an increase in minimum pension payouts. deferrals for businesses to an increase in minimum pension payouts.
Ukraine
March 19: The government published a new law that wil exempt taxpayers from The government published a new law that wil 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
moratorium on tax audits from March 18 to May 31, and suspended some tax-related moratorium on tax audits from March 18 to May 31, and suspended some tax-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 to support the local currency, which Sold dol ars in the interbank market 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 banks to defer all discretionary payments, such as dividends “directed” commercial banks to defer all discretionary 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 dirham ($27 bil ion) stimulus package to deal Announced a 100 bil ion dirham ($27 bil ion) 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
certificates of deposit by 75 basis points and wil also ease regulatory limits on loans. certificates of deposit by 75 basis points and wil also ease regulatory limits on loans.
April 5: Announced new measures to guarantee liquidity in the banking system in the Announced new measures to guarantee liquidity in the banking system in the
face of the pandemic, boosting its stimulus to a total of 256 bil ion dirhams ($70 face of the pandemic, boosting its stimulus to a total of 256 bil ion dirhams ($70
bil ion) from a previously announced 100 bil ion dirhams ($27 bil ion) package. It also bil ion) from a previously announced 100 bil ion dirhams ($27 bil ion) package. It also
halved banks’ reserve requirements for demand deposits to 7% from 14%, which wil halved banks’ reserve requirements for demand deposits to 7% from 14%, which wil
inject about 61 bil ion dirhams of liquidity to support banks’ lending and liquidity inject about 61 bil ion 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 customers until the end of the year, and said principal and interest payments for customers until the end of the year, and said
banks participating in the scheme can benefit from a capital buffer relief of 50 bil ion banks participating in the scheme can benefit from a capital buffer relief of 50 bil ion
dirhams until December 2021, among other measures. dirhams until December 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
Airlines to help it deal with the impact of COVID-19 on its business. Airlines to help it deal with the impact of COVID-19 on its business.
April 5: Announced that it would reinforce its stockpile of strategic goods and waive Announced that it would reinforce its stockpile of strategic goods and waive
residency visa fines for the rest of the year in response to the viral outbreak. residency visa fines for the rest of the year in response 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 small and midsize businesses, and reduced revived a program to support lending to small and midsize businesses, and reduced
bank capital requirements to further boost credit. bank capital requirements 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, added 200 bil ion pounds ($232 bil ion) impact of COVID-19 on the British economy, added 200 bil ion pounds ($232 bil ion)
to its asset purchase program (including sovereign and private debt), increased its to its asset purchase program (including sovereign and private debt), increased its
banks’ borrowing allowance under the Term Funding Scheme for Small and Medium banks’ borrowing allowance under the Term Funding Scheme for Small and Medium
Enterprises from 5% to 10% of participants’ stock of real economy lending, and Enterprises from 5% to 10% of participants’ stock of real economy lending, and
cancelled its 2020 stress test of the 8 major UK banks. cancelled its 2020 stress test of the 8 major 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 ion pounds ($24.7 bil ion), part of a previously announced program to at least 20 bil ion pounds ($24.7 bil ion), part of a previously announced
stimulus package to help the economy. It wil begin ramping up its corporate bond stimulus package to help the economy. It wil begin ramping up its corporate bond
purchases through a series of reverse auctions starting on April 7, holding three a purchases through a series of reverse auctions starting on April 7, holding three a
week, and it wil be able to buy 20 mil ion pounds of any single bond—double the week, and it wil be able to buy 20 mil ion pounds of any single bond—double the
previous amount. previous amount.
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UK Government
March 11: Announced a stimulus package totaling 30 bil ion pounds ($39 bil ion). It Announced a stimulus package totaling 30 bil ion pounds ($39 bil ion). It
wil include 7 bil ion pounds ($8.6 bil ion) available to support the labor market, 5 wil include 7 bil ion pounds ($8.6 bil ion) available to support the labor market, 5
bil ion pounds ($6.1 bil ion) to help the health-care system, and 18 bil ion pounds ($22 bil ion pounds ($6.1 bil ion) to help the health-care system, and 18 bil ion pounds ($22
bil ion) to support the UK economy, bringing the total fiscal stimulus to 30 bil ion bil ion) to support the UK economy, bringing the total fiscal stimulus to 30 bil ion
pounds ($39 bil ion). (Among the specific measures, there wil be a tax cut for pounds ($39 bil ion). (Among the specific measures, there wil be a tax cut for
retailers, cash grants to small businesses, a mandate to provide sick pay for people retailers, cash grants to small businesses, a mandate to provide sick pay for people
who need to self-isolate, subsidies to cover the costs of sick pay for small businesses, who need to self-isolate, subsidies to cover the costs of sick pay for small businesses,
and expanded access to government benefits for the self-employed and unemployed.) and expanded access to government benefits for the self-employed 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 businesses that need economy; it includes 330 bil ion pounds of guaranteed loans for businesses that need
cash to pay rent or suppliers, 20 bil ion pounds of tax cuts and grants for businesses cash to pay rent or suppliers, 20 bil ion pounds of tax cuts and grants for businesses
in 2020, a three-month mortgage payment holiday for borrowers affected by the in 2020, a three-month mortgage payment holiday for borrowers affected by the
virus, and a one-year “business rates” holiday for businesses in the retail, leisure, and virus, and a one-year “business rates” holiday for businesses in the retail, leisure, and
hospitality industry. hospitality industry.
March 28: Wil ease regulations for affected businesses, including simplifying the Wil ease regulations for affected businesses, including simplifying the
insolvency system to keep companies trading, easing administrative requirements and insolvency system to keep companies trading, easing administrative requirements and
barriers to the import of personal protective equipment, and helping new companies barriers 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 banks to eliminate, cut, or delay interest Ordered commercial banks to eliminate, cut, or delay interest
payments on loans to companies facing losses due to the coronavirus outbreak. payments on loans to companies facing losses 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 worth 27 tril ion dong ($1.16 bil ion) to help Announced measures worth 27 tril ion dong ($1.16 bil ion) to help
businesses cope with the coronavirus epidemic and help the economy stick to its businesses cope with the coronavirus epidemic 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 lease fees. The government will also speed up state spending on reduction in land lease fees. The government will also speed up state spending on
infrastructure projects. infrastructure projects.
Zimbabwe
Reserve Bank of Zimbabwe
March 26: Cut its main lending rate to 25% from 35% and set a fixed exchange rate Cut its main lending rate to 25% from 35% and set a fixed exchange rate
(at 25 Zimbabwe dol ars to the U.S. dol ar) as part of measures to support the (at 25 Zimbabwe dol ars to the U.S. dol ar) as part of measures to support the
economy. It indicated that it had suspended the managed floating exchange rate economy. It indicated that it had suspended the managed floating exchange rate
system to provide for greater certainty in the pricing of goods and services in the system to provide for greater certainty in the pricing of goods and services 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 electronic and cash foreign currencies in domestic transactions, Zimbabweans to use electronic and cash foreign currencies in domestic 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 in loans made $50 bil ion in loans
International
available to deal with the COVID-19 through its rapid-disbursing emergency financing available to deal with the COVID-19 through its rapid-disbursing emergency financing
Institutions’
facilities, including $10 bil ion of zero-interest loans to the poorest IMF member facilities, including $10 bil ion of zero-interest loans to the poorest IMF member
Responses
countries. On March 16, the IMF announced that it “stands ready to mobilize its $1 countries. On March 16, the IMF announced that it “stands ready to mobilize its $1
tril ion lending capacity to help our membership" and that it has “40 ongoing tril ion lending capacity to help our membership" and that it has “40 ongoing
arrangements—both disbursing and precautionary—with combined commitments of arrangements—both disbursing and precautionary—with combined commitments of
about $200 bil ion,” some of which could be used for this crisis, and that it is aiming about $200 bil ion,” some of which could be used for this crisis, and that it is aiming
to boost its debt relief fund to $1 bil ion from its current level of $400 mil ion. to boost its debt relief fund to $1 bil ion from its current level of $400 mil ion.
March 3: The The World Bank announced an initial package of up to $12 bil ion in announced an initial package of up to $12 bil ion 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. Specifically, it comprises up to $2.7 bil ion new financing from IBRD, $1.3 outbreak. Specifically, it comprises up to $2.7 bil ion new financing from IBRD, $1.3
bil ion from IDA, complemented by reprioritization of $2 bil ion of the Bank’s existing bil ion from IDA, complemented by reprioritization of $2 bil ion of the Bank’s existing
portfolio, and $6 bil ion from IFC, as well as policy advice and technical assistance ($8 portfolio, and $6 bil ion from IFC, as well as policy advice and technical assistance ($8
bil ion is new funding and the remaining $4 bil ion is redirected from current lines of bil ion is new funding and the remaining $4 bil ion is redirected 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 ion in resources that can be programmed to countries requesting has up to $2 bil ion in resources that can be programmed to countries requesting
support for disease monitoring, testing and public health services, and that it could support for disease monitoring, testing and public health services, and that it could
work with countries that have undisbursed loan balances to redirect resources to work with countries that have undisbursed loan balances to redirect resources to
pandemic-response efforts. pandemic-response efforts.
March 13: The The European Bank for Reconstruction and Development
(EBRD) unveiled an emergency €1 bil ion “Solidarity Package” of measures to help unveiled an emergency €1 bil ion “Solidarity Package” of measures 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 emergency program, the EBRD wil set up a “resilience framework” to provide the emergency program, the EBRD wil set up a “resilience framework” 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, comprising emergency liquidity, working capital and temporary credit difficulties, comprising emergency liquidity, 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 National Bank , and the Swiss National Bank
agreed to lower the pricing on the standing US dol ar liquidity swap arrangements by agreed to lower the pricing on the standing US dol ar liquidity swap arrangements by
25 basis points, so that the new rate wil be the US dol ar overnight index swap (OIS) 25 basis points, so that the new rate wil be the US dol ar overnight index swap (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 schemes to banks based bil ion euro financing package consists of dedicated guarantee schemes to banks based
on existing program for immediate deployment (20 bil ion euros), liquidity lines to on existing program for immediate 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 securities purchasing programs to allow banks to transfer euros), and asset-backed securities purchasing programs to allow banks to transfer
risk on portfolios of SME loans (10 bil ion euros). risk 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 ion to setting-up a special “Strategic Preparedness and Response Facility” of $730 mil ion to
mitigate the negative health and socio-economic impact of the COVID-19 pandemic. mitigate the negative health and socio-economic impact of the COVID-19 pandemic.
It wil include $280 mil ion from the Bank and Islamic Solidarity Fund for It wil include $280 mil ion from the Bank and Islamic Solidarity Fund for
Development (ISFD) for sovereign projects and programs, $300 mil ion from Development (ISFD) for sovereign projects and programs, $300 mil ion from
International Islamic Trade finance Corporation (ITFC) for trade finance and $150 International Islamic Trade finance Corporation (ITFC) for trade finance and $150
mil ion from the Islamic Corporation for the Insurance of Investment and Export mil ion from 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 ion to the eight countries granted a nonreimbursable financial package worth $8 mil ion to the eight countries
of the Central American Integration System in order to combat the widening of the Central American Integration System in order to combat the widening
economic fallout from the COVID-19 (Guatemala, El Salvador, Honduras, Nicaragua, economic fallout from the COVID-19 (Guatemala, El Salvador, Honduras, Nicaragua,
Costa Rica, Panama, Belize, and the Dominican Republic wil each receive $1 mil ion). Costa Rica, Panama, Belize, and the Dominican Republic wil each receive $1 mil ion).
March 18: The The Asian Development Bank (ADB) announced a $6.5 bil ion initial announced a $6.5 bil ion initial
package to address the immediate needs of its developing member countries (DMCs) package to address the immediate needs of its developing member 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 responses to the approximately $3.6 bil ion in sovereign operations for a range of responses to the
health and economic consequences of the pandemic, $1.6 bil ion in non-sovereign health and economic consequences of the pandemic, $1.6 bil ion in non-sovereign
operations for micro, small, and medium-sized enterprises, domestic and regional operations for micro, small, and medium-sized enterprises, domestic and regional
trade, and firms directly impacted, about $1 bil ion in concessional resources through trade, and firms directly impacted, about $1 bil ion in concessional resources through
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reallocations from ongoing projects and assessing possible needs for contingencies, reallocations from ongoing projects and assessing possible needs for contingencies,
and $40 mil ion in technical assistance and quick-disbursing grants. (Since February and $40 mil ion in technical assistance and quick-disbursing grants. (Since February
2020, ADB has provided more than $225 mil ion to meet urgent needs of both 2020, ADB has provided more than $225 mil ion to meet 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. These new facilities wil support the strains in global U.S. dol ar funding markets. These new facilities wil 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, the Banco Central do Brasil, the Bank of Korea, the Banco de Bank of Australia, the Banco Central do Brasil, the Bank of Korea, the Banco de
Mexico, the Monetary Authority of Singapore, and the Sveriges Riksbank, and $30 Mexico, the Monetary Authority of Singapore, and the Sveriges Riksbank, and $30
bil ion each for the Danmarks Nationalbank, the Norges Bank, and the Reserve Bank bil ion each for the Danmarks Nationalbank, the Norges Bank, and the Reserve Bank
of New Zealand. of New Zealand.
March 19: The Board of Directors of the The Board of Directors of the New Development Bank approved approved
RMB 7 bil ion ($1 bil ion) Emergency Assistance Program Loan to the People’s RMB 7 bil ion ($1 bil ion) Emergency Assistance Program Loan to the People’s
Republic of China. The Program wil help finance urgent and unexpected public health Republic of China. The Program wil 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 measures that has opened an additional $2.5 bil ion line of credit to support the measures that
member countries are taking to mitigate the effects of COVID-19. On March 3, it member countries are taking to mitigate the effects of COVID-19. On March 3, it
approved a credit line worth $300 mil ion to manage emergencies related to COVID-approved a credit line worth $300 mil ion to manage emergencies related to COVID-
19 and the possibility of granting technical help of up to $5 mil ion for initiatives 19 and the possibility of granting technical help of up to $5 mil ion 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, economic measures, and into the global economy, as part of targeted fiscal policy, economic measures, and
guarantee schemes to counteract the social, economic and financial impacts” of guarantee schemes to counteract the social, economic and financial impacts” of
COVID-19. COVID-19.
Source: Congressional Research Service based on information from news articles and press releases. Congressional Research Service 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

Acknowledgments
The authors would like to thank and acknowledge the expert assistance provided by Amber Wilhelm, The authors would like to thank and acknowledge the expert assistance provided by Amber Wilhelm,
Visual Information Specialist, CRS, in the preparation of this report. Visual Information Specialist, CRS, in the preparation of this report.

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
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under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
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