Global Economic Effects of COVID-19

Changes from April 26, 2021 to May 7, 2021

This page shows textual changes in the document between the two versions indicated in the dates above. Textual matter removed in the later version is indicated with ~~red strikethrough~~ and textual matter added in the later version is indicated with blue.

Global Economic Effects of COVID-19
~~April 26~~May 7, 2021 , 2021
In the year since the COVID-19 outbreak was first diagnosed, it has spread to over 200 countries In the year since the COVID-19 outbreak was first diagnosed, it has spread to over 200 countries
and all U.S. states. The pandemic has negatively affected global economic growth beyond and all U.S. states. The pandemic has negatively affected global economic growth beyond
James K. Jackson,
anything experienced in nearly a century. Estimates so far indicate the virus reduced global anything experienced in nearly a century. Estimates so far indicate the virus reduced global
Coordinator
economic growth to an annualized rate of -4.5% to -6.0% in 2020, with a partial recovery of economic growth to an annualized rate of -4.5% to -6.0% in 2020, with a partial recovery of
Specialist in International Specialist in International
2.5% to 5.2% projected for 2021. Global trade is estimated to have fallen by 5.3% in 2020, 2.5% to 5.2% projected for 2021. Global trade is estimated to have fallen by 5.3% in 2020, but is but is
Trade and Finance Trade and Finance
projected to grow by 8.0% in 2021. According to a consensus of forecasts, the economic projected to grow by 8.0% in 2021. According to a consensus of forecasts, the economic

downturn in 2020 was not as negative as initially estimated, due, at least in part, to the fiscal and downturn in 2020 was not as negative as initially estimated, due, at least in part, to the fiscal and
Martin A. Weiss
monetary policies governments adopted in 2020. Major advanced economies, which comprise monetary policies governments adopted in 2020. Major advanced economies, which comprise
Specialist in International Specialist in International
60% of global economic activity, are projected to operate below their potential output level 60% of global economic activity, are projected to operate below their potential output level
Trade and Finance Trade and Finance
through at least 2024. Compared with the synchronized nature of the global economic slowdown through at least 2024. Compared with the synchronized nature of the global economic slowdown

in the first half of 2020, the global economy has shown signs of a two-track recovery that began in the first half of 2020, the global economy has shown signs of a two-track recovery that began
in the third quarter of 2020 with developed economies experiencing a nascent recovery and in the third quarter of 2020 with developed economies experiencing a nascent recovery and
Andres B. Schwarzenberg
economic growth in developing economies lagging behind. A resurgence in infectious cases in economic growth in developing economies lagging behind. A resurgence in infectious cases in
Analyst in International Analyst in International
Europe, the United States, Japan, Brazil, India, and various developing economies Europe, the United States, Japan, Brazil, India, and various developing economies renewed calls renewed calls
Trade and Finance Trade and Finance
for lockdowns and curfews and threatened to weaken or delay a potential sustained economic for lockdowns and curfews and threatened to weaken or delay a potential sustained economic

recovery into mid to late 2021. recovery into mid to late 2021.
Rebecca M. Nelson
Specialist in International Specialist in International
Developed economies are making strides in vaccinating growing shares of their populations, Trade and Finance raising prospects of a recovery in those economies and, in turn, the broader global economy. However, a surge in diagnosed cases in large developing economies and resistance among some Karen M. Sutter populations in developed economies to get vaccinated raise questions about the speed and the Specialist in Asian Trade strength of an economic recovery over the near term. The economic fallout from the pandemic and Finance ~~The economic fallout from the pandemic~~ could risk continued labor dislocations as a could risk continued labor dislocations as a ~~result of~~
~~Trade and Finance~~
res ult of lingering high levels of unemployment not lingering high levels of unemployment not experienced since the Great Depression of the 1930sexperienced since the Great Depression of the 1930s

and high levels of debt among developing economies. Job losses have been concentrated more and high levels of debt among developing economies. Job losses have been concentrated more
~~Karen M. Sutter~~
intensively in the services sector where intensively in the services sector where Michael D. Sutherland workers have been unable to work offsite. The human workers have been unable to work offsite. The human
~~Specialist in Asian Trade~~
costs in terms of lives lost will costs in terms of lives lost will Analyst in International permanently affect global economic growth in addition to the cost permanently affect global economic growth in addition to the cost
~~and Finance~~
of rising levels of poverty, of rising levels of poverty, Trade and Finance lives upended, careers derailed, and increased social unrest. Some lives upended, careers derailed, and increased social unrest. Some

estimates indicate that 95 estimates indicate that 95 million people may have entered into extreme poverty in 2020 with 80 million people may have entered into extreme poverty in 2020 with 80
million more undernourished compared to pre-pandemic levels. In addition, some estimates million more undernourished compared to pre-pandemic levels. In addition, some estimates
~~Michael D. Sutherland~~
indicate that global indicate that global trade could fall by an annual amount of 9.0% or slightly less in 2020 as a trade could fall by an annual amount of 9.0% or slightly less in 2020 as a
~~Analyst in International~~
result of the global economic downturn, exacting an especially heavy economic toll on trade-result of the global economic downturn, exacting an especially heavy economic toll on trade-
~~Trade and Finance~~
dependent developing and emerging economiesdependent developing and emerging economies . . The full economic impact of the pandemic likely The full economic impact of the pandemic likely

~~will~~ will remain unclear until the negative health effects peak. This report provides an overview of the remain unclear until the negative health effects peak. This report provides an overview of the
global economic costs to date and the response by governments and international institutions to global economic costs to date and the response by governments and international institutions to

address these effects. address these effects.
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; on March 11 it announced the viral outbreak was January 2020; on March 11 it announced the viral outbreak was ~~officially~~official y a pandemic, the highest a pandemic, the highest
level of health emergency.1 Since then, the emergency evolved into a globallevel of health emergency.1 Since then, the emergency evolved into a global public health and public health and
economic crisis that affected the $90 economic crisis that affected the $90 ~~trillion~~tril ion global economy beyond anything experienced in global economy beyond anything experienced in
nearly a century. In a variance of John Donne’s poem, “No Man is an Island,” the viral infection nearly a century. In a variance of John Donne’s poem, “No Man is an Island,” the viral infection
spread between and across countries and affected nearly every community, demonstrating the spread between and across countries and affected nearly every community, demonstrating the
highly interconnected nature of the global economy: the virus was detected in over 200 countries highly interconnected nature of the global economy: the virus was detected in over 200 countries
and and ~~all~~ al U.S. states.2 By early March 2020, the focal point of infections shifted from China to U.S. states.2 By early March 2020, the focal point of infections shifted from China to
Europe, Europe, ~~especially~~especial y Italy, but by April, the focus had shifted to the United States, where the Italy, but by April, the focus had shifted to the United States, where the
number of infections had been accelerating. By April 2021, India and Brazilnumber of infections had been accelerating. By April 2021, India and Brazil emerged as viral hot emerged as viral hot
spots with the number of infections cases and deaths reaching record levels in those countries. spots with the number of infections cases and deaths reaching record levels in those countries.
Through various phases of the health crisis, governments adopted unprecedented economic Through various phases of the health crisis, governments adopted unprecedented economic
policies to lock down social activities to contain the spread of the pandemic, inadvertently policies to lock down social activities to contain the spread of the pandemic, inadvertently
creating a global economic recession. In response to the unprecedented drop in economic activity, creating a global economic recession. In response to the unprecedented drop in economic activity,
governments adopted a series of actions governments adopted a series of actions ~~initially~~ initial y comprised of monetary policies aimed at comprised of monetary policies aimed at
stabilizingstabilizing financial markets and ensuring the flow of credit. In the second phase, policy actions financial markets and ensuring the flow of credit. In the second phase, policy actions
shifted to fiscal measures aimed at sustaining economic growth as governments adopted shifted to fiscal measures aimed at sustaining economic growth as governments adopted
quarantines and social distancing measures. In the third phase, government policies shifted to quarantines and social distancing measures. In the third phase, government policies shifted to
developing, purchasing and distributing vaccines.developing, purchasing and distributing vaccines.
The infection has sickened over 142 The infection has sickened over 142 ~~million people globally~~mil ion people global y with over 3.0 with over 3.0 ~~million~~ mil ion fatalities. The fatalities. The
United States reported that by mid-April 2021, nearly 32 United States reported that by mid-April 2021, nearly 32 ~~million~~ mil ion Americans had been diagnosed Americans had been diagnosed
and over 567,000 had died from the virus. At one point, more than 80 countries had closed their and over 567,000 had died from the virus. At one point, more than 80 countries had closed their
borders to arrivals from countries with infections, ordered businesses to close, instructed their borders to arrivals from countries with infections, ordered businesses to close, instructed their
populations to self-quarantine, and closed schools to an estimated 1.5 populations to self-quarantine, and closed schools to an estimated 1.5 ~~billion~~bil ion children.3 On May 5, 2021, the Biden administration announced it would support international discussions to waive intel ectual property restrictions on COVID-19 vaccine production for developing economies.4 Prior to this announcement, developed economies, including Britain, Switzerland, the EU, and the United States, had blocked a proposal by over 80 developing countries at the World Trade Organization to suspend intel ectual property rights restrictions on production of COVID-19 vaccines.5 Governments have attempted to balance often-competing policy objectives between addressing the public health crisis and economic considerations that include, but are not limited to these: 1 Bill Chappell, “COVID-19: COVID-19 Is Now Officially a Pandemic, WHO Says,” ~~children.3~~
~~Governments have attempted to balance often-competing policy objectives between addressing~~
~~the public health crisis and economic considerations that include, but are not limited to these:~~
~~ Confronting ballooning budget deficits weighed against increasing spending to~~
~~support unemployed workers and sustain social safety nets.~~
~~ Providing financial support for national health systems that are under pressure to~~
~~develop vaccines while also funding efforts to care for and safeguard citizens.~~
~~ Implementing monetary and fiscal policies that support credit markets and~~
~~sustain economic activity broadly, while also assisting specific sectors and~~
~~businesses under financial distress.~~
~~ Implementing fiscal policies to stimulate economic activity and support the most~~
~~heavily affected households, weighed against the prospects of rising rates of~~
~~inflation, potentially rising debt servicing costs, and concerns that some~~
~~households in developed economies have at times used transfer payments to~~

~~1 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.
2 “Mapping the Spread of the COVID-19 in the U.S. and Worldwide,” 2 “Mapping the Spread of the COVID-19 in the U.S. and Worldwide,” Washington Post Staff, Washington Post Staff, Washington Post, March , March
4, 2020. https://www.washingtonpost.com/world/2020/01/22/mapping-spread-new-COVID-19/?arc404=true.4, 2020. https://www.washingtonpost.com/world/2020/01/22/mapping-spread-new-COVID-19/?arc404=true.
3 “ 3 “~~The~~T he Day the World Stopped: How Governments Are Still Day the World Stopped: How Governments Are Still ~~Struggling~~ Struggling to Get Ahead of the COVID-19,” to Get Ahead of the COVID-19,” The
~~Economist~~Econom ist, 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.
~~Congressional Research Service~~

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~~Global Economic Effects of COVID-19~~

~~maintain high rates of saving relative to pre-pandemic rates, instead of increasing~~
4 Diamond, Dan, T yler Pager, and Jeff Stein, Biden Commits to Waiving Vaccine Patents, Driving Wedge With Pharmaceutical Companies, The Washington Post, May 5, 2021. 5 Rich, Developing Economies Wrangle Over COVID Patents, Reuters, March 10, 2021. https://www.reuters.com/article/us-health-coronavirus-wto/rich-developing-nations-wrangle-over-covid-vaccine-patents-idUSKBN2B21V9. Congressional Research Service 1 Global Economic Effects of COVID-19  Confronting bal ooning budget deficits weighed against increasing spending to support unemployed workers and sustain social safety nets.  Providing financial support for national health systems that are under pressure to develop vaccines while also funding efforts to care for and safeguard citizens.  Implementing monetary and fiscal policies that support credit markets and sustain economic activity broadly, while also assisting specific sectors and businesses under financial distress.  Implementing fiscal policies to stimulate economic activity and support the most heavily affected households, weighed against the prospects of rising rates of inflation, potential y rising debt servicing costs, and concerns that some households in developed economies have at times used transfer payments to maintain high rates of saving relative to pre-pandemic rates, instead of increasing consumption, as households have faced limited spending opportunities, or a form consumption, as households have faced limited spending opportunities, or a form
of involuntary saving, and concerns over their jobs, incomes, and the course of of involuntary saving, and concerns over their jobs, incomes, and the course of
their economies, or precautionary saving. their economies, or precautionary saving.
 Having central banks and monetary authorities intervene in sovereign debt and  Having central banks and monetary authorities intervene in sovereign debt and
corporate bond markets to stabilize markets and insure liquidity, while also corporate bond markets to stabilize markets and insure liquidity, while also
raising concerns among some analysts that this intervention compromises the raising concerns among some analysts that this intervention compromises the
abilityability of the markets to perform their traditional functions of pricing risk and of the markets to perform their traditional functions of pricing risk and
~~allocating~~al ocating capital. capital.
 Adopting fiscal and monetary policies to address the immediate impact of the  Adopting fiscal and monetary policies to address the immediate impact of the
health crisis compared with the mix of such policies between assisting health crisis compared with the mix of such policies between assisting
households, firms, or state and local governments that may be needed going households, firms, or state and local governments that may be needed going
forward should the health and economic crises persist. forward should the health and economic crises persist.
 Differing national approaches to providing government-funded economic support  Differing national approaches to providing government-funded economic support
to workers that vary between short-term unemployment insurance programs to to workers that vary between short-term unemployment insurance programs to
sustain workers incomes, although not directed at maintaining employment in sustain workers incomes, although not directed at maintaining employment in
their previous jobs, and programs that delay labor market adjustments by their previous jobs, and programs that delay labor market adjustments by
supporting workers in their pre-COVID-19 jobs, identified as job-retention supporting workers in their pre-COVID-19 jobs, identified as job-retention
programs, even as those jobs could disappear once the support ends.programs, even as those jobs could disappear once the support ends.46
Despite a rebound in some key economic indicators from the depths of the pandemic-related Despite a rebound in some key economic indicators from the depths of the pandemic-related
economic recession in early 2020, a growing list of economic indicators makes it clear the economic recession in early 2020, a growing list of economic indicators makes it clear the
COVID-19 pandemic continues to negatively affect global economic growth on a scale not COVID-19 pandemic continues to negatively affect global economic growth on a scale not
experienced since at least the global financial crisis of 2008-2009.experienced since at least the global financial crisis of 2008-2009.57 By early 2021, financial By early 2021, financial
market indices had largely recovered from the losses experienced in March and April 2020, market indices had largely recovered from the losses experienced in March and April 2020,
international oil prices had reached their pre-pandemic levels by late February 2021, pressure on international oil prices had reached their pre-pandemic levels by late February 2021, pressure on
the dollarthe dollar had eased, and labor markets appeared to be stabilizing.had eased, and labor markets appeared to be stabilizing. Over the long run, however, Over the long run, however,
damage to labor markets could be more problematic with a large share of the labor force unable to damage to labor markets could be more problematic with a large share of the labor force unable to
return to pre-pandemic jobs. Similarly, economies could face long-term costs as a result of return to pre-pandemic jobs. Similarly, economies could face long-term costs as a result of
children who were held out of in-person education for a year that could result in lower academic children who were held out of in-person education for a year that could result in lower academic
performance and graduation rates and delayed entry into the labor market. On March 31, 2021, performance and graduation rates and delayed entry into the labor market. On March 31, 2021,
KristalinaKristalina Georgieva, Managing Director of the International Monetary Fund (IMF), warned that Georgieva, Managing Director of the International Monetary Fund (IMF), warned that
6 Job Retention Schemes During the COVID-19 Lockdown and Beyond, Organization for Economic Cooperation and Development, August 3, 2020. 7 Mapping the Spread of the COVID-19. Congressional Research Service 2 Global Economic Effects of COVID-19 an emerging market debt crisis could unfold as the global economy begins recovering and interest an emerging market debt crisis could unfold as the global economy begins recovering and interest
rates rise, which could cause a capital outflow from developing economies.rates rise, which could cause a capital outflow from developing economies.68
The U.S. and European economies experienced the beginnings of a recovery in the third quarter The U.S. and European economies experienced the beginnings of a recovery in the third quarter
of 2020 with the U.S. economy growing by 33.4%, and at an annual rate of 5.0%, accounting for of 2020 with the U.S. economy growing by 33.4%, and at an annual rate of 5.0%, accounting for
an an ~~equally~~equal y sharp decline in growth in the second quarter, and the Eurozone economy growing by sharp decline in growth in the second quarter, and the Eurozone economy growing by
12.5% during the quarter and -7.4% at an annual rate. That recovery, however, was weakened by 12.5% during the quarter and -7.4% at an annual rate. That recovery, however, was weakened by
renewed quarantines and business lockdowns in response to a resurgence of infectious cases and renewed quarantines and business lockdowns in response to a resurgence of infectious cases and
the emergence of more contagious variants of the virus that began in September. the emergence of more contagious variants of the virus that began in September. ~~On January 4,~~
~~2021, the UK announced a spike in new viral infections and the emergence of a new variant of~~
~~the virus, spurring the government to impose a stringent lockdown that closed schools, restricted~~

~~4 Job Retention Schemes During the COVID-19 Lockdown and Beyond, Organization for Economic Cooperation and~~
~~Development, August 3, 2020.~~
~~5 Mapping the Spread of the COVID-19.~~
~~6 Giles, Chris, Prepare for Emerging Markets Debt Crisis, Warns IMF Head, Financial Times, March 31, 2021.~~
~~https://www.ft.com/content/487c30f4-7f21-4787-b519-dde52264d141.~~
~~Congressional Research Service~~

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~~Global Economic Effects of COVID-19~~

The annual U.S. economic growth rate slipped to -3.5% in 2020, but was estimated to have grown at an annualized rate of growth of 6.4% during the first quarter of 2021.9 On January 4, 2021, the UK announced a spike in new viral infections and the emergence of a new variant of the virus, spurring the government to impose a stringent lockdown that closed schools, restricted activities, and deployed the armed forces to assist in testing and vaccinations.activities, and deployed the armed forces to assist in testing and vaccinations.7 10 On March 3, 2021, On March 3, 2021,
~~UK Chancellor~~UK Chancel or of the Exchequer Sunak announced a £65 of the Exchequer Sunak announced a £65 ~~billion~~bil ion stimulus package over two years stimulus package over two years
to revive the UK economy comprised of various business incentives and worker income support to revive the UK economy comprised of various business incentives and worker income support
measures to be followed by tax increases starting in 2023.measures to be followed by tax increases starting in 2023.811 The U.S. The U.S. Congress passed a $1.9 Congress passed a $1.9
~~trillion~~tril ion economic stimulus economic stimulus ~~bill~~bil , designated the American Rescue Plan Act , designated the American Rescue Plan Act (P.L. 117-2), that was (P.L. 117-2), that was
signed by President Biden on March 11, 2021. signed by President Biden on March 11, 2021.
The WHO indicated in early January 2021, that 230 The WHO indicated in early January 2021, that 230 ~~million~~mil ion Europeans were living under Europeans were living under
lockdown restrictions and that 26 lockdown restrictions and that 26 ~~million~~mil ion Europeans had contracted COVID-19 in 2020. Europeans had contracted COVID-19 in 2020.912 On On
April 13, 2021, the WHO estimated that 1 April 13, 2021, the WHO estimated that 1 ~~million~~ mil ion Europeans had died from the disease, nearly Europeans had died from the disease, nearly
twice as many as in the United States. In an attempt to stop the spread of new variant strains of twice as many as in the United States. In an attempt to stop the spread of new variant strains of
the virus, the UK, Ireland, Germany, Denmark, and some northern Italian regions closed schools the virus, the UK, Ireland, Germany, Denmark, and some northern Italian regions closed schools
in January 2021 for several weeks.in January 2021 for several weeks.1013 Reportedly, disputes over vaccine distribution within and Reportedly, disputes over vaccine distribution within and
among European countries and with Britain and the spread of more virulent strains of the among European countries and with Britain and the spread of more virulent strains of the
COVID-19 virus increased public criticism of government leaders in some EU countries and COVID-19 virus increased public criticism of government leaders in some EU countries and
prompted renewed business lockdowns and school closures.prompted renewed business lockdowns and school closures.11
14 On March 31, 2021, French President Macron announced a four-week country-wide business On March 31, 2021, French President Macron announced a four-week country-wide business
lockdown to curb a resurgence in viral cases that were overwhelming French hospitals and lockdown to curb a resurgence in viral cases that were overwhelming French hospitals and
extending by one week a planned two week closure of schools.extending by one week a planned two week closure of schools.1215 The EU also blocked shipments The EU also blocked shipments
to Britainto Britain of the AstraZeneca vaccine produced in Belgium and the Netherlands until of the AstraZeneca vaccine produced in Belgium and the Netherlands until
commitments made to supply the EU had been met, or until other countries showed reciprocity in commitments made to supply the EU had been met, or until other countries showed reciprocity in
~~their distribution of vaccines.13At the same time, 16 European countries, including Germany,~~
~~France, Italy, and Spain, temporarily suspended use of the AstraZeneca vaccine over concerns of~~
~~possible negative side-effects, despite assurances by EU drug regulators that the benefits of the~~
~~vaccine outweighed any risks.14~~
~~India announced on March 25, 2021, that it was temporarily halting exports of COVID-19~~
~~vaccines and prioritizing local vaccinations in response to a resurgence in viral cases.15 In early~~
~~April 2021, India and Brazil were designated global viral infection hot spots due to a resurgence~~

7 8 Giles, Chris, Prepare for Emerging Markets Debt Crisis, Warns IMF Head, Financial Times, March 31, 2021. https://www.ft.com/content/487c30f4-7f21-4787-b519-dde52264d141. 9 Gross Domestic Product, First Quarter 2021 (Advance Estimate), Bureau of Economic Analysis, April 29, 2021. 10 Parker, George, Bethan Staton, and Sarah Neville, Boris Johnson Warns of Parker, George, Bethan Staton, and Sarah Neville, Boris Johnson Warns of ~~Tougher~~T ougher COVID-19 Restrictions For COVID-19 Restrictions For
England, England, Financial ~~Times~~Tim es, January 5, 2021. https://www.ft.com/content/6abfd02c-e2c6-4ca1-944a-1b962af6dead. , January 5, 2021. https://www.ft.com/content/6abfd02c-e2c6-4ca1-944a-1b962af6dead.
811 Pickard, Jim, Chris Giles, Pickard, Jim, Chris Giles, and Georgeand George Parker, Rishi SunakParker, Rishi Sunak Delivers SpendDelivers Spend Now, Now, ~~Tax~~T ax Later Budget to Kickstart UK Later Budget to Kickstart UK
Economy, Economy, Financial ~~Times~~Tim es, March 3, 2021. https://www.ft.com/content/da66ce9a-6dfc-4a3a-bde7-d4f4faed6c4a. , March 3, 2021. https://www.ft.com/content/da66ce9a-6dfc-4a3a-bde7-d4f4faed6c4a.
912 Clarfelt, Harriet, Pandemic at ‘tipping point’, Says WHO Europe Official, Clarfelt, Harriet, Pandemic at ‘tipping point’, Says WHO Europe Official, Financial Times, January 7, 2021. , January 7, 2021.
https://www.ft.com/content/9b42e8fa-dde1-3663-a4ad-7d6605121866. https://www.ft.com/content/9b42e8fa-dde1-3663-a4ad-7d6605121866.
1013 Hall, Ben, Bethan Staton, Joshua Chaffin, Guy Hall, Ben, Bethan Staton, Joshua Chaffin, Guy Chazan, European Capitals FollowChazan, European Capitals Follow UK With School ClosuresUK With School Closures as as
VirusVirus Surges,Surges, Financial ~~Times~~Tim es, January 7, 2021. https://www.ft.com/content/8121ca0a-4d96-4cf5-b5df-a73adc16a606. , January 7, 2021. https://www.ft.com/content/8121ca0a-4d96-4cf5-b5df-a73adc16a606.
1114 Chazan, Guy, Chazan, Guy, We Are a LaughingWe Are a Laughing Stock’: Covid-19 and Germany’s Political Malaise, Stock’: Covid-19 and Germany’s Political Malaise, Financial Times, April 1, , April 1,
2021. https://www.ft.com/content/bc5a3b02-a90d-4206-a441-1bada29feba2. 2021. https://www.ft.com/content/bc5a3b02-a90d-4206-a441-1bada29feba2.
1215 Mallet, Victor, Macron Extends Lockdown Across France to Combat Covid Mallet, Victor, Macron Extends Lockdown Across France to Combat Covid Surge,Surge, Financial Times, April 1, 2021. , April 1, 2021.
https://www.ft.com/content/731ec423-03dc-405c-9ff4-f8670b953f2d. https://www.ft.com/content/731ec423-03dc-405c-9ff4-f8670b953f2d.
~~13 Fleming, Sam, Michael Peel, and George Parker, EU Warns ‘zero’ Jabs Shipped to UK Until AstraZeneca Meets~~
~~Bloc’s Targets, Financial Times, April 1, 2021. https://www.ft.com/content/28158bed-5f07-4504-9a00-2f3d8f7519df.~~
~~14 Paolo Mancini, Donato, Miles Johnson, Michael Peel, David Keohane, Richard Milne, and Sarah Neville, European~~
~~Capitals Coordinated Suspension of Oxford/AstraZeneca Covid Jab, Financial Times, April 1, 2021.~~
~~https://www.ft.com/content/a046e340-892b-4e68-bfae-4f5c40a5506a.~~
~~15 Findlay, Stephanie, Michael Peel, Donato Paolo Mancini, Andres Schipani and Jasmine Cameron-Chileshe, India~~
~~Blocks Vaccine Exports in Blow to Dozens of Nations Financial Times, March 25, 2021.~~
~~https://www.ft.com/content/5349389c-8313-41e0-9a67-58274e24a019.~~
~~Congressional Research Service~~

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~~Global Economic Effects of COVID-19~~

~~in cases. On April 25, India reported a single-day total of 350,000 new cases.16 Brazil reportedly~~
~~has had over 350,000 viral-related deaths: in some cities in Brazil, COVID-related daily deaths~~
~~have outnumbered daily births.17~~
~~On April 15, 2021, the Director-General of the WTO called on WTO members and vaccine~~
~~manufacturers to increase production, reduce export restrictions, and suspend intellectual property~~
~~rights on COVID-19 vaccines to increase immunizations.18~~Congressional Research Service 3 Global Economic Effects of COVID-19 their distribution of vaccines.16At the same time, 16 European countries, including Germany, France, Italy, and Spain, temporarily suspended use of the AstraZeneca vaccine over concerns of possible negative side-effects, despite assurances by EU drug regulators that the benefits of the vaccine outweighed any risks.17 India announced on March 25, 2021, that it was temporarily halting exports of COVID-19 vaccines and prioritizing local vaccinations in response to a resurgence in viral cases.18 In early April 2021, India and Brazil were designated global viral infection hot spots due to a resurgence in cases. On May 6, India reported a single-day total of 412,000 new cases.19 Brazil reportedly has had over 350,000 viral-related deaths: in some cities in Brazil, COVID-related daily deaths have outnumbered daily births.20 On April 15, 2021, the Director-General of the WTO cal ed on WTO members and vaccine manufacturers to increase production, reduce export restrictions, and suspend intel ectual property rights on COVID-19 vaccines to increase immunizations.21 The WHO also reported that new The WHO also reported that new
COVID-19 cases had nearly doubled around the world over the preceding two months, COVID-19 cases had nearly doubled around the world over the preceding two months,
approaching the highest rates of infection since the start of the pandemic. Reportedly, new case approaching the highest rates of infection since the start of the pandemic. Reportedly, new case
numbers had spiked in every region of the world, with the largest outbreaks occurring in India, numbers had spiked in every region of the world, with the largest outbreaks occurring in India,
Brazil, Poland, Turkey and some other countries.Brazil, Poland, Turkey and some other countries.1922 Also on April 15, 2021, a group of 175 former Also on April 15, 2021, a group of 175 former
world leaders and Nobel laureates world leaders and Nobel laureates ~~called~~cal ed on the United States to suspend on the United States to suspend ~~intellectual~~intel ectual property property
rights for COVID-19 vaccines to facilitate the international production and distribution of rights for COVID-19 vaccines to facilitate the international production and distribution of
vaccines by vaccines by ~~allowing~~al owing developing countries the ability to manufacture their own vaccines. The developing countries the ability to manufacture their own vaccines. The
group warned that, “….inequitable vaccine access would impact the global economy and prevent group warned that, “….inequitable vaccine access would impact the global economy and prevent
it from recovering.”it from recovering.”20
23 On April On April 16, the WHO announced that it would develop one or more COVID-19 technology hubs 16, the WHO announced that it would develop one or more COVID-19 technology hubs
to transfer a “comprehensive technology package and provide appropriate technology to to transfer a “comprehensive technology package and provide appropriate technology to
interested manufacturers” in developing economies.interested manufacturers” in developing economies.2124 Reportedly, the initiative’s goal is to make 16 Fleming, Sam, Michael Peel, and George Parker, EU Warns ‘zero’ Jabs Shipped to UK Until AstraZeneca Meets Bloc’s T argets, Financial Tim es, April 1, 2021. https://www.ft.com/content/28158bed-5f07-4504-9a00-2f3d8f7519df. 17 Paolo Mancini, Donato, Miles Johnson, Michael Peel, David Keohane, Richard Milne, and Sarah Neville, European Capitals Coordinated Suspension of Oxford/AstraZeneca Covid Jab, Financial Tim es, April 1, 2021. https://www.ft.com/content/a046e340-892b-4e68-bfae-4f5c40a5506a. 18 Findlay, Stephanie, Michael Peel, Donato Paolo Mancini, Andres Schipani and Jasmine Cameron-Chileshe, India Blocks Vaccine Exports in Blow to Dozens of Nations Financial Tim es, March 25, 2021. https://www.ft.com/content/5349389c-8313-41e0-9a67-58274e24a019. 19 Slater, Joanna, India Announces Record Number of Deaths and New Cases as Outbreak Rages on, The Washington Post, May 6, 2021; Parker, Claire, Paul Schemm, Sean Sullivan, India Sets Another Daily Coronavirus Case Record: U.S. Pledges ~~Reportedly, the initiative’s goal is to make~~
~~the technology either free of intellectual property constraints in developing economies, or that~~
~~such rights are made available through non-exclusive licenses.~~
~~Japan’s Prime Minister Suga announced on January 5, 2021, that Tokyo and three surrounding~~
~~prefectures would initiate a voluntary “soft” state of emergency on January 8 that stressed~~
~~teleworking, restricting unnecessary travel, and reducing sporting and cultural events.22 On April~~
~~23, 2021, Japan announced new two-week lockdown protocols for Tokyo, Osaka, and two other~~
~~large cities as Japan faced a rise in viral infections. The lockdown will encourage workers to work~~
~~from home, all venues that serve alcohol and supermarkets, but will not include schools.23 On~~
~~March 9, 2021 the government announced that Japan’s GDP grew by 2.8% in the fourth quarter~~
~~of 2020, down from a third quarter rate of 5.3%. On an annualized rate, the economy is projected~~
~~to have declined by 4.8% year over year. A decline in business investment and personal~~

~~16 Parker, Claire, Paul Schemm, Sean Sullivan, India Sets Another Daily Coronavirus Case Record: U.S. Pledges~~ Help, Help,
The Washington Post, April 26, 2021. https://www.washingtonpost.com/world/asia_pacific/india-coronavirus-deaths- April 26, 2021. https://www.washingtonpost.com/world/asia_pacific/india-coronavirus-deaths-
pandemic/2021/04/25/ec0f208a-a51c-11eb-b314-2e993bd83e31_story.html. pandemic/2021/04/25/ec0f208a-a51c-11eb-b314-2e993bd83e31_story.html.
1720 Caverni, Alexandre, Brazil Sees Caverni, Alexandre, Brazil Sees 1,803 COVID-19 Deaths; Chinese Vaccine1,803 COVID-19 Deaths; Chinese Vaccine Found 50.7% Effective Against Variant, Found 50.7% Effective Against Variant,
Reuters, April 11, 2021; Hassan, Jennifer, In Many Brazilian Cities, Deaths Have Overtaken Births, Reuters, April 11, 2021; Hassan, Jennifer, In Many Brazilian Cities, Deaths Have Overtaken Births, The Washington
Post, April 15, 2021. April 15, 2021.
1821 Cunnigham, Erin, New Cunnigham, Erin, New African African ~~WTO~~WT O Head Urges Head Urges Members to Members to ~~Take~~T ake Action on Vaccine Inequity, Action on Vaccine Inequity, The Washington
Post, April 15, 2021. , April 15, 2021.
1922 Cunningham, Erin and Siobhan O’Grady, Cunningham, Erin and Siobhan O’Grady, ~~New Global~~ New Global Coronavirus CasesCoronavirus Cases Nearly DoubleNearly Double ~~in Two~~ in T wo Months, Months, The
Washington Post, April 16, 2021. https://www.washingtonpost.com/world/2021/04/16/global-coronavirus-cases-surge-, April 16, 2021. https://www.washingtonpost.com/world/2021/04/16/global-coronavirus-cases-surge-
who/. who/.
2023 Williams, Aime, Former World Leaders Call Williams, Aime, Former World Leaders Call on Bidenon Biden to Suspendto Suspend Covid-19 VaccineCovid-19 Vaccine Patents, Patents, Financial Times, April , April
15, 2021. https://www.ft.com/content/43fd53f5-2b82-4e41-981c-8544a6ce996b. 15, 2021. https://www.ft.com/content/43fd53f5-2b82-4e41-981c-8544a6ce996b.
2124 World Health Organization, Establishment of a COVID-19 mRNA World Health Organization, Establishment of a COVID-19 mRNA ~~Vaccine Technology Transfer~~ Vaccine T echnology T ransfer Hub to Scale Hub to Scale Up Up
GlobalGlobal Manufacturing, April 16, 2021. Congressional Research Service 4 Global Economic Effects of COVID-19 the technology either free of intel ectual property constraints in developing economies, or that such rights are made available through non-exclusive licenses. Japan’s Prime Minister Suga announced on January 5, 2021, that Tokyo and three surrounding prefectures would initiate a voluntary “soft” state of emergency on January 8 that stressed teleworking, restricting unnecessary travel, and reducing sporting and cultural events.25 On April 23, 2021, Japan announced new two-week lockdown protocols for Tokyo, Osaka, and two other large cities as Japan faced a rise in viral infections. The lockdown wil encourage workers to work from home, al venues that serve alcohol and supermarkets, but wil not include schools.26 On March 9, 2021 the government announced that Japan’s GDP grew by 2.8% in the fourth quarter of 2020, down from a third quarter rate of 5.3%. On an annualized rate, the economy is projected to have declined by 4.8% year over year. A decline in business investment and personal ~~Manufacturing, April 16, 2021.~~
~~22 Harding, Robin and Kana Inagaki, Japan Declares State of Emergency in Tokyo as Coronavirus Cases Surge,~~
Financial Times, January 5, 2021. https://www.ft.com/content/72ceb064-2231-4d17-bd8f-92bd7f99f33c.
~~23 Harding, Robin, Japan to Impose New State of Emergency as COVID-19 Cases Rise, Financial Times, April 23,~~
~~2021. https://www.ft.com/content/a3d3a8bc-6d0e-4b2b-9e09-3310db13222e.~~
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consumption in the fourth quarter led forecasters to downgrade their estimates for fourth quarter consumption in the fourth quarter led forecasters to downgrade their estimates for fourth quarter
2020 and forecasts for first quarter 2021 GDP.2020 and forecasts for first quarter 2021 GDP.24
27 Impact on Workers
In a report prepared for the January 25-29, 2021, World Economic Forum, the International Labor In a report prepared for the January 25-29, 2021, World Economic Forum, the International Labor
Organization (ILO) estimated that 93% of the world’s workers were living under some form of Organization (ILO) estimated that 93% of the world’s workers were living under some form of
workplace restrictions as a result of the global pandemic and that 8.8% of global working hours workplace restrictions as a result of the global pandemic and that 8.8% of global working hours
were lost in 2020 relative to the fourth quarter of 2019, an amount equivalent to 255 were lost in 2020 relative to the fourth quarter of 2019, an amount equivalent to 255 ~~million~~mil ion full- full-
time jobs. The ILO estimated that the loss in working hours was comprised of (1) workers who time jobs. The ILO estimated that the loss in working hours was comprised of (1) workers who
were unemployed, but actively seeking employment, (2) workers who were employed, but had were unemployed, but actively seeking employment, (2) workers who were employed, but had
their working hours reduced, and (3) workers who were unemployed and not actively seeking their working hours reduced, and (3) workers who were unemployed and not actively seeking
employment. Based on this approach, the ILO estimated that unemployment employment. Based on this approach, the ILO estimated that unemployment ~~globally~~ global y was was
equivalent to 0.9% of total working hours lost in 2020, while inactivity and reduced hours equivalent to 0.9% of total working hours lost in 2020, while inactivity and reduced hours
accounted for 7.9% of total working hours lost, as indicated in accounted for 7.9% of total working hours lost, as indicated in Figure 1. Total working hours lost . Total working hours lost
in 2020 compared with 2019 were highest in Europe (14.6%) and the Americas (13.7%), where in 2020 compared with 2019 were highest in Europe (14.6%) and the Americas (13.7%), where
quarantines and lockdowns had been extensive, followed by lower-middle income economies. quarantines and lockdowns had been extensive, followed by lower-middle income economies.
The ILO also estimated that global job losses totaled 114 The ILO also estimated that global job losses totaled 114 ~~million~~ mil ion jobs in 2020 relative to 2019. jobs in 2020 relative to 2019.
The share of lost worker hours due to higher rates of unemployment were highest in Europe The share of lost worker hours due to higher rates of unemployment were highest in Europe
(6.0%), the Americas (2.7%), including the United States, and Arab States (1.7%).(6.0%), the Americas (2.7%), including the United States, and Arab States (1.7%).2528 The ILO also The ILO also
estimated that an increase in global economic activity through part of the fourth quarter was equal estimated that an increase in global economic activity through part of the fourth quarter was equal
to an increase of 130 to an increase of 130 ~~million~~ mil ion full-timefull-time ~~jobs.~~
jobs. 25 Harding, Robin and Kana Inagaki, Japan Declares State of Emergency in T okyo as Coronavirus Cases Surge, Financial Tim es, January 5, 2021. https://www.ft.com/content/72ceb064-2231-4d17-bd8f-92bd7f99f33c. 26 Harding, Robin, Japan to Impose New State of Emergency as COVID-19 Cases Rise, Financial Times, April 23, 2021. https://www.ft.com/content/a3d3a8bc-6d0e-4b2b-9e09-3310db13222e. 27 Obe, Mitsuru, Japan Revises Q4 GDP Growth Down to Annualized 11.7%, Nikkei Asia, March 9, 2021. 28 ILO Monitor: COVID-19 and the World of Work, Seventh Edition, International Labor Organization, January 15, 2021, p. 2. Congressional Research Service 5 Global Economic Effects of COVID-19 Figure 1. Composition of Working-Hours Lost by Region, 2020

Source: ILO Monitor: COVID-19 and the World of Work, International Labor Organization, 2021 International Labor Organization, 2021
A number of economists and others has estimated that pandemic-related disruptions to labor A number of economists and others has estimated that pandemic-related disruptions to labor
markets in developed and developing economies could have long-lasting effects. One group of markets in developed and developing economies could have long-lasting effects. One group of
economists estimated that even after the pandemic recedes and economic activity ramps up, firms economists estimated that even after the pandemic recedes and economic activity ramps up, firms
may not abandon the labor-saving lessons they learned, with fewer jobs created in retail stores, may not abandon the labor-saving lessons they learned, with fewer jobs created in retail stores,

~~24 Obe, Mitsuru, Japan Revises Q4 GDP Growth Down to Annualized 11.7%, Nikkei Asia, March 9, 2021.~~
~~25 ILO Monitor: COVID-19 and the World of Work, Seventh Edition, International Labor Organization, January 15,~~
~~2021, p. 2.~~
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restaurants, auto dealerships, and meat-packing facilities, among other places.restaurants, auto dealerships, and meat-packing facilities, among other places.2629 Other analysts Other analysts
estimated the pandemic could affect the structure of work in three main areas by: estimated the pandemic could affect the structure of work in three main areas by:
1. Creating a permanent presence of telework, which could account for 20% to 25% 1. Creating a permanent presence of telework, which could account for 20% to 25%
of workers in developed economies and 20% in developing economies working of workers in developed economies and 20% in developing economies working
from home three to five times per week, which could reduce demand for public from home three to five times per week, which could reduce demand for public
transportation, restaurants, and retail stores; transportation, restaurants, and retail stores;
2. Increasing the level of e-commerce that could disrupt jobs in travel and leisure, 2. Increasing the level of e-commerce that could disrupt jobs in travel and leisure,
low-wage jobs in brick-and-mortar stores and restaurants, and increase jobs in low-wage jobs in brick-and-mortar stores and restaurants, and increase jobs in
distribution centers. distribution centers.
3. Accelerating the adoption of artificial 3. Accelerating the adoption of artificial ~~intelligence~~ intel igence (AI) and robotics.(AI) and robotics.2730
Analysts with the Pew Research Center surveyed American workers in January 2021 who were Analysts with the Pew Research Center surveyed American workers in January 2021 who were
unemployed and looking for work. The results indicated that half of those surveyed were unemployed and looking for work. The results indicated that half of those surveyed were
pessimistic about finding another job in the near future and two-thirds had considered changing pessimistic about finding another job in the near future and two-thirds had considered changing
their occupations, a sentiment shared across income levels. The other third indicated they had their occupations, a sentiment shared across income levels. The other third indicated they had
already engaged in re-already engaged in re-~~skilling~~skil ing through job retraining programs or educational activities. through job retraining programs or educational activities.2831
In the United States, labor markets are recovering, but the In the United States, labor markets are recovering, but the ~~overall~~ overal rate of unemployment rate of unemployment ~~still~~
stil exceeds the pre-pandemic rate. In testimony before the Senate Banking Committee on February exceeds the pre-pandemic rate. In testimony before the Senate Banking Committee on February
23, 2021, Federal Reserve Chairman Jerome 23, 2021, Federal Reserve Chairman Jerome ~~Powell~~ Powel indicated that although new COVID-19 cases indicated that although new COVID-19 cases
and hospitalizations had and hospitalizations had ~~fallen~~fal en and offered hope for an economic recovery later in 2021, the and offered hope for an economic recovery later in 2021, the
recovery so far remained, “uneven and far from complete, and the path ahead is highly recovery so far remained, “uneven and far from complete, and the path ahead is highly
uncertain.”uncertain.”2932 In addition, In addition, ~~Powell~~ Powel argued that a resurgence in viral cases, hospitalizations, and 29 Autor, David, and Elizabeth Reynolds, The Nature of Work After the COVID Crisis: Too Few Low-Wage Jobs, T he Hamilton Project, Brookings Institution, July 2020, p. 2 30 McKinsey Global Institute, The Future of Work After COVID-19, February 18, 2021. 31 Parker, Kim, Ruth Igielnik, and Rakesh Kochhar Unemployed Americans are Feeling the Emotional Strain of Job Loss; Most Have Considered Changing Occupations, Pew Research Center. February 10, 2021. 32 Powell, Jerome, H., T estimony before the Senate Committee on Banking, Housing, and Urban Affairs, February 23, Congressional Research Service 6 Global Economic Effects of COVID-19 ~~argued that a resurgence in viral cases, hospitalizations, and~~
deaths was “causing great hardship for deaths was “causing great hardship for ~~millions~~mil ions of Americans and is weighing on economic of Americans and is weighing on economic
activity and job creation.”activity and job creation.”
The Federal Reserve also indicated in an accompanying monetary policy report the pandemic The Federal Reserve also indicated in an accompanying monetary policy report the pandemic - -
related economic recession was disproportionately affecting certain groups in the economy: related economic recession was disproportionately affecting certain groups in the economy:
lower-wage and less-educated workers, racial and ethnic minorities, and women.lower-wage and less-educated workers, racial and ethnic minorities, and women.~~30 Powell~~ 33 Powel also also
indicated that published unemployment rates “indicated that published unemployment rates “~~dramatically~~dramatical y understated” the deterioration in the understated” the deterioration in the
U.S. labor market. Instead of the announced unemployment rate of 6.5% in January, 2021, U.S. labor market. Instead of the announced unemployment rate of 6.5% in January, 2021, ~~Powell~~
Powel argued that the actual rate likelyargued that the actual rate likely was closer to 10%, reflecting discouraged workers who have was closer to 10%, reflecting discouraged workers who have
stopped looking for work and, therefore, are not counted as part of the labor force.stopped looking for work and, therefore, are not counted as part of the labor force.3134 He stated, He stated,
however, that, “even those grim statistics understate the decline in labor market conditions for the however, that, “even those grim statistics understate the decline in labor market conditions for the
most economical y~~most economically~~ vulnerable Americans.” vulnerable Americans.”3235
During the During the 5860-week period from mid-March 2020 to -week period from mid-March 2020 to ~~mid-April, 2021, 85.2 million~~early May, 2021, 86.3 mil ion Americans Americans
(half of the 160 (half of the 160 ~~million~~ mil ion civilian work force) had filed for unemployment insurance at some point during the preceding year, as indicated in Table 1.36 On a seasonal y adjusted basis, the number of insured unemployed individuals was 3.7 mil ion on April 24, 2021, down from a peak of 25 mil ion in mid-May, 2020. As indicated in Figure 2, weekly claims have fal en~~civilian work force) had filed for unemployment insurance at some point~~

~~26 Autor, David, and Elizabeth Reynolds, The Nature of Work After the COVID Crisis: Too Few Low-Wage Jobs, The~~
~~Hamilton Project, Brookings Institution, July 2020, p. 2~~
~~27 McKinsey Global Institute, The Future of Work After COVID-19, February 18, 2021.~~
~~28 Parker, Kim, Ruth Igielnik, and Rakesh Kochhar~~ ~~Unemployed Americans are Feeling the Emotional Strain of Job~~
~~Loss; Most Have Considered Changing Occupations, Pew Research Center. February 10, 2021.~~
~~29 Powell, Jerome, H., Testimony before the Senate Committee on Banking, Housing, and Urban Affairs, February 23,~~
~~2021, and Powell, Jerome H., Getting Back to a Strong Labor Market, Speech before The Economic Club of New~~
~~York, February 10, 2021.~~
~~30 Board of Governors of the Federal Reserve System, Monetary Policy Report February 19, 2021, February 19, 2021.~~
~~31 Powell, Jerome H., Getting Back to a Strong Labor Market, p. 4.~~
~~32 Ibid, p. 4.~~
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~~during the preceding year, as indicated in Table 1.33 On a seasonally adjusted basis, the number of~~
~~insured unemployed individuals was 3.67 million on April 10, 2021, down from a peak of 25~~
million in mid-May. As indicated in Figure 2, ~~weekly claims have fallen from the sharp~~ from the sharp increases increases
recorded inrecorded in April and May, 2020. On a week-over-week basis, new claims totaled April and May, 2020. On a week-over-week basis, new claims totaled ~~547~~498,000 in the ,000 in the
week ending week ending ~~April 17~~May 1, 2021, , 2021, ~~falling by 39~~fal ing by 92,000 from the previous week’s total of ,000 from the previous week’s total of ~~586~~590,000, and ,000, and
representing the representing the ~~smallest~~smal est weekly increase in unemployment filings since the start of the weekly increase in unemployment filings since the start of the
pandemic. This number is pandemic. This number is ~~still~~ stil more than twice the average number of weekly claims recorded more than twice the average number of weekly claims recorded
prior to the pandemic of about 200,000. In the week ending April prior to the pandemic of about 200,000. In the week ending April 317, 2021, , 2021, ~~17.4 million~~16.2 mil ion people people
claimed benefits in claimed benefits in ~~all~~ al programs, programs, ~~up 492,000 over~~down 404,000 from the previous week’s total. the previous week’s total.
The insured unemployment rate for the week ending April The insured unemployment rate for the week ending April 1724, 2021, was 2.6%, , 2021, was 2.6%, ~~down 0.1~~
~~percentage point from~~ same as rate for the previous week. As workers have approached the traditional 26-week the previous week. As workers have approached the traditional 26-week
maximum for receiving maximum for receiving standard unemployment benefits they have applied for benefits under the standard unemployment benefits they have applied for benefits under the
extended Pandemic Emergency Unemployment Compensation (PEUC) program or the Pandemic extended Pandemic Emergency Unemployment Compensation (PEUC) program or the Pandemic
Unemployment Assistance (PUA) program.Unemployment Assistance (PUA) program.3437 Between Between ~~March 27~~April 10, 2021, 2021, and April and April 3 17, 2021, claims , 2021, claims
under the PEUC program under the PEUC program ~~increased by 474,700 to 5.6 million~~decreased by 221,600 to 4.9 mil ion, while claims under the PUA , while claims under the PUA
program program ~~increased by 265,000 to 7.3 million~~decreased by 112,500 to 6.9 mil ion. Benefits were extended by P.L. 116-260, signed by . Benefits were extended by P.L. 116-260, signed by
~~President Trump on December 27, 2020. Benefits were further extended through September 6,~~
~~2021 by the American Rescue Plan Act of 2021, P.L. 117-2, signed by President Biden on March~~
~~11, 2021.~~

33President Trump on 2021, and Powell, Jerome H., Getting Back to a Strong Labor Market, Speech before T he Economic Club of New York, February 10, 2021. 33 Board of Governors of the Federal Reserve System, Monetary Policy Report February 19, 2021, February 19, 2021. 34 Powell, Jerome H., Getting Back to a Strong Labor Market, p. 4. 35 Ibid, p. 4. 36 Unemployment Insurance Weekly Claims, Department of Labor, , Department of Labor, ~~April 22~~May 6, 2021. https://www.dol.gov/;, 2021. https://www.dol.gov/; Romm, Romm, ~~Tony~~T ony
and Jeff Stein, 2.4 Million Americans Filedand Jeff Stein, 2.4 Million Americans Filed ~~Jobless~~ Jobless Claims Last Week, Bringing Nine Week Claims Last Week, Bringing Nine Week ~~Total~~T otal to 38.6 Million, to 38.6 Million,
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/
3437 Both programs were authorized under P.L. 116-136, March 27, 2020, the Coronavirus Aid, Relief, and Economic Both programs were authorized under P.L. 116-136, March 27, 2020, the Coronavirus Aid, Relief, and Economic
Security (CARES)Security (CARES) Act, with benefits ending by DecemberAct, with benefits ending by December 31, 2020. 31, 2020. ~~The~~T he PUA program provided 39 weeks of PUA program provided 39 weeks of
unemployment assistance, including $600 weekly benefits (expired in Augustunemployment assistance, including $600 weekly benefits (expired in August 2020), under certain conditions, for 2020), under certain conditions, for
workers who had exhausted regularworkers who had exhausted regular unemployment benefits, were not eligibleunemployment benefits, were not eligible for regular benefits, or were not eligible for regular benefits, or were not eligible
for benefits underfor benefits under the PEUC program. On December 27, 2020, President the PEUC program. On December 27, 2020, President ~~Trump~~T rump signed the Consolidated signed the Consolidated
Appropriations Act of 2021 (P.L. 116-260), extending PUA benefits for 11 weeks. Appropriations Act of 2021 (P.L. 116-260), extending PUA benefits for 11 weeks. ~~The~~T he PEUC program provided 13 PEUC program provided 13
weeksweeks of additional benefits to individualsof additional benefits to individuals who had exhausted standard unemployment assistance and met other who had exhausted standard unemployment assistance and met other
eligibilityeligibility requirements. Benefits wererequirements. Benefits were further extended through September 6, 2021 by the American Rescuefurther extended through September 6, 2021 by the American Rescue Plan Act Plan Act
of 2021, P.L. 117-2, signed by President Biden on March 11, 2021of 2021, P.L. 117-2, signed by President Biden on March 11, 2021 . DOL, . DOL, ~~Unemployment~~Unem ploym ent Insurance Program Letter
No. 14-21, March 15, 2021; DOL, , March 15, 2021; DOL, ~~Unemployment~~Unem ployment Insurance Program Letter No. 16 -20, February 25, 2021. , February 25, 2021.
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December 27, 2020. Benefits were further extended through September 6, 2021 by the American Rescue Plan Act of 2021, P.L. 117-2, signed by President Biden on March 11, 2021. Figure 2. Initial U.S. Weekly Claims for Unemployment Insurance, 2020 and 2021
In In ~~millions~~mil ions of individual claims of individual claims

Source: Department of Labor. Created by CRS. Department of Labor. Created by CRS.
~~On May 8, 2020~~At the beginning of the pandemic-related economic recession, the Bureau of Labor Statistics (BLS) reported , the Bureau of Labor Statistics (BLS) reported on May 8, 2020, that 20 mil ion~~that 20 million~~ Americans lost Americans lost
their jobs in Apriltheir jobs in April 2020 as a consequence of business lockdowns, pushing the total number of 2020 as a consequence of business lockdowns, pushing the total number of
unemployed Americans to 23 unemployed Americans to 23 ~~million,35~~ mil ion,38 out of a total civilianout of a total civilian labor force of 158 labor force of 158 ~~million~~mil ion. The . The
increase pushed the national increase pushed the national unemployment rate to 14.7% (with some caveats), the highest since unemployment rate to 14.7% (with some caveats), the highest since
the Great Depression of the 1930s.the Great Depression of the 1930s.3639 In contrast, on April 2, 2021, BLS reported that: nonfarm In contrast, on April 2, 2021, BLS reported that: nonfarm
employment rose by 916,000 in March, up from the previous month’s increase of 468,000; the employment rose by 916,000 in March, up from the previous month’s increase of 468,000; the
total number of unemployed Americans was 9.7 total number of unemployed Americans was 9.7 ~~million~~mil ion, down from the previous month’s total of , down from the previous month’s total of
~~10 million;37~~10 mil ion;40 and the and the unemployment rate dropped to 6.0%, again with some caveats.unemployment rate dropped to 6.0%, again with some caveats.38 41
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~~
~~5,237~~
~~-1,378~~
~~15,819~~
~~10.9~~
~~22,026~~
~~18-Apr-20~~
~~4,442~~
~~-795~~
~~18,011~~
~~12.4~~
~~26,468~~
~~25-Apr-20~~
~~3,867~~
~~-575~~
~~22,377~~
~~15.4~~
~~30,335~~

~~35 This~~ 38 T his total did not include 10.9 million workers who were working total did not include 10.9 million workers who were working part time not by choice and 9.9 million individuals part time not by choice and 9.9 million individuals
who werewho were seeking employment. seeking employment.
3639 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/.
~~37 This~~40 T his total does not include 5.8 million workers who were total does not include 5.8 million workers who were working part time not by choice and 6.9 million individuals working part time not by choice and 6.9 million individuals
who werewho were seeking employment. seeking employment.
3841 The Employment Situation-March 2021, Bureau of Labor Statistics, April 2, 2021, https://www.bls.gov/., Bureau of Labor Statistics, April 2, 2021, https://www.bls.gov/. BLS BLS
indicated that some individualsindicated that some individuals had been misclassifiedhad been misclassified in previous months. Instead of being classifiedin previous months. Instead of being classified as unemployed, as unemployed,
they were misclassifiedthey were misclassified as as employed, but absent from work dueemployed, but absent from work due to coronavirus-related businessto coronavirus-related business closures. If such closures. If such
individualsindividuals had been classifiedhad been classified as unemployed, the unemployment rate would have been 5 percentage points higher in as unemployed, the unemployment rate would have been 5 percentage points higher in
April. April.
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Insured
Change from
Insured
Unemployment
Week Ending
Initial Claims
Prior Week
Unemployment
Rate
Total Claims
11-Apr-20 5,237 -1,378 15,819 10.9 22,026 18-Apr-20 4,442 -795 18,011 12.4 26,468 25-Apr-20 3,867 -575 22,377 15.4 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 20-Jun-20
1,482 1,482
-58 -58
19,290 19,290
13.2 13.2
47,252 47,252
27-Jun-20 27-Jun-20
1,408 1,408
-74 -74
17,760 17,760
12.2 12.2
48,660 48,660
4-Jul-20 4-Jul-20
1,310 1,310
-98 -98
17,304 17,304
11.8 11.8
49,970 49,970
11-Jul-20 11-Jul-20
1,308 1,308
-2 -2
16,151 16,151
11.1 11.1
51,278 51,278
18-Jul-20 18-Jul-20
1,422 1,422
114 114
16,951 16,951
11.6 11.6
52,700 52,700
25-Jul-20 25-Jul-20
1,435 1,435
13 13
16,090 16,090
11.0 11.0
54,135 54,135
1-Aug-20 1-Aug-20
1,191 1,191
-244 -244
15,480 15,480
10.6 10.6
55,326 55,326
8-Aug-20 8-Aug-20
971 971
-220 -220
14,759 14,759
10.1 10.1
56,297 56,297
15-Aug-20 15-Aug-20
1,104 1,104
133 133
14,492 14,492
9.9 9.9
57,401 57,401
22-Aug-20 22-Aug-20
1,011 1,011
-98 -98
13,254 13,254
9.1 9.1
58,412 58,412
29-Aug-20 29-Aug-20
884 884
-127 -127
13,544 13,544
9.3 9.3
59,296 59,296
5-Sep-20 5-Sep-20
893 893
9 9
12,747 12,747
8.7 8.7
60,189 60,189
12-Sep-20 12-Sep-20
866 866
-27 -27
12,747 12,747
8.7 8.7
61,055 61,055
19-Sep-20 19-Sep-20
873 873
7 7
11,979 11,979
8.2 8.2
61,928 61,928
26-Sep-20 26-Sep-20
849 849
-24 -24
10,594 10,594
7.2 7.2
62,777 62,777
3-Oct-20 3-Oct-20
767 767
-82 -82
9,398 9,398
6.4 6.4
63,544 63,544
10-Oct-20 10-Oct-20
842 842
75 75
8,472 8,472
5.8 5.8
64,386 64,386
17-Oct-20 17-Oct-20
791 791
-45 -45
7,823 7,823
5.3 5.3
65,183 65,183
24-Oct-20 24-Oct-20
758 758
-39 -39
7,222 7,222
4.9 4.9
65,941 65,941
31-Oct-20 31-Oct-20
757 757
-1 -1
6,801 6,801
4.6 4.6
66,698 66,698
7-Nov-20 7-Nov-20
711 711
-46 -46
6,370 6,370
4.3 4.3
67,409 67,409
14-Nov-20 14-Nov-20
748 748
37 37
6,089 6,089
4.2 4.2
68,157 68,157
21-Nov-20 21-Nov-20
787 787
39 39
5,527 5,527
3.8 3.8
68,944 68,944
28-Nov-20 28-Nov-20
716 716
-71 -71
5,781 5,781
3.9 3.9
69,660 69,660
5-Dec-20 5-Dec-20
853 853
134 134
5,614 5,614
3.8 3.8
70,513 70,513
12-Dec-20 12-Dec-20
873 873
20 20
5,433 5,433
3.7 3.7
71,386 71,386 Congressional Research Service 9 Global Economic Effects of COVID-19 Insured Change from Insured Unemployment Week Ending Initial Claims Prior Week Unemployment Rate Total Claims
19-Dec-20 19-Dec-20
803 803
-70 -70
5,311 5,311
3.6 3.6
72,189 72,189
26-Dec-20 26-Dec-20
763 763
-40 -40
5,180 5,180
3.5 3.5
72,952 72,952
2-Jan-21 2-Jan-21
781 781
18 18
5,240 5,240
3.7 3.7
73,733 73,733
~~Congressional Research Service~~

9

~~Global Economic Effects of COVID-19~~

~~Insured~~
~~Change from~~
~~Insured~~
~~Unemployment~~
~~Week Ending~~
~~Initial Claims~~
~~Prior Week~~
~~Unemployment~~
~~Rate~~
~~Total Claims~~
9-Jan-21 9-Jan-21
904 904
123 123
5,061 5,061
3.6 3.6
74,637 74,637
16-Jan-21 16-Jan-21
886 886
-18 -18
4,878 4,878
3.4 3.4
75,523 75,523
23-Jan 21 23-Jan 21
836 836
-50 -50
4,791 4,791
3.4 3.4
76,359 76,359
30-Jan-21 30-Jan-21
837 837
1 1
4,655 4,655
3.3 3.3
77,196 77,196
6-Feb-21 6-Feb-21
863 863
26 26
4,592 4,592
3.2 3.2
78,059 78,059
13-Feb-21 13-Feb-21
847 847
-16 -16
4,469 4,469
3.1 3.1
78,906 78,906
20-Feb-21 20-Feb-21
747 747
-100 -100
4,383 4,383
3.1 3.1
79,653 79,653
27-Feb-21 27-Feb-21
761 761
14 14
4,157 4,157
2.9 2.9
80,414 80,414
6-March-21 6-March-21
734 734
-27 -27
4,123 4,123
2.9 2.9
81,148 81,148
13-March-21 13-March-21
765 765
31 31
3,841 3,841
2.7 2.7
81,913 81,913
20-March-21 20-March-21
658 658
-107 -107
3,750 3,750
2.6 2.6
82,571 82,571
27-March-21 27-March-21
729 729
71 71
3,717 3,717
2.6 2.6
83,300 83,300
3-April-21 3-April-21
742 742
13 13
3,708 3,708
2.7 2.7
84,042 84,042
10-April-21 10-April-21
586 586
-156 -156
3, 3,~~674~~651
2.6 2.6
84,628 84,628
17-April-21 17-April-21
~~547~~
~~-39~~

~~85,173~~566 -20 3,652 2.6 85,194 24-April-21 590 24 3,690 2.6 85,784 1-May-21 498 -92 86,282
Source: Department of Labor, CRS calculations. Department of Labor, CRS calculations.
Impact on Output
According to the AprilAccording to the April 2021 2021 World Economic Outlook prepared by the International Monetary prepared by the International Monetary
Fund (IMF), the global economy is projected to experience a stronger recovery in 2021 and 2022 Fund (IMF), the global economy is projected to experience a stronger recovery in 2021 and 2022
than indicated in previous forecasts, with global growth projected to increase at a rate of 6% in than indicated in previous forecasts, with global growth projected to increase at a rate of 6% in
2021 and 4.4% in 2022.2021 and 4.4% in 2022.3942 The IMF also concluded the global economic recovery would occur at The IMF also concluded the global economic recovery would occur at
different speeds across and within individual countries, reflecting differences in the pace of different speeds across and within individual countries, reflecting differences in the pace of
vaccinations, the extent of policy support, and various structural conditions, such as the role of vaccinations, the extent of policy support, and various structural conditions, such as the role of
tourism in the economy. Within countries, the employment and earnings of youth, women, and tourism in the economy. Within countries, the employment and earnings of youth, women, and
the relativelythe relatively lower-lower-~~skilled~~skil ed workers has been affected the most. workers has been affected the most.
In addition to the asynchronous recovery, the IMF also concluded that fiscal and financial support In addition to the asynchronous recovery, the IMF also concluded that fiscal and financial support
provided by central banks may have unintended consequences by supporting equity valuations provided by central banks may have unintended consequences by supporting equity valuations
that are misaligned with their model-estimated fundamentals and by increasing financial risks that are misaligned with their model-estimated fundamentals and by increasing financial risks
~~overall~~ overal that could become problematic should interest rates start rising.that could become problematic should interest rates start rising.4043 These risks could 42 World Economic Outlook, International Monetary Fund, April, 2021, p. xiii. 43 Global Financial Stability Report, International Monetary Fund, April, 2021, p. x. Congressional Research Service 10 Global Economic Effects of COVID-19 ~~These risks could~~
increase for non-financial firms and households that had high levels of debt relative to income increase for non-financial firms and households that had high levels of debt relative to income
prior to the pandemic crisis should interest rates rise. Accommodative monetary and fiscal prior to the pandemic crisis should interest rates rise. Accommodative monetary and fiscal
policies intended to limitpolicies intended to limit the economic impact of the crisis may have aided non-financial firms the economic impact of the crisis may have aided non-financial firms
and households, but such support may also have come at the expense of higher debt levels for and households, but such support may also have come at the expense of higher debt levels for
most countries and the prospect of a lower rate of economic growth in the future.most countries and the prospect of a lower rate of economic growth in the future.41

~~39 World Economic Outlook, International Monetary Fund, April, 2021, p. xiii.~~
~~40 Global Financial Stability Report, International Monetary Fund, April, 2021, p. x.~~
~~41 Ibid, p. 36.~~
~~Congressional Research Service~~

10

~~Global Economic Effects of COVID-19~~
44
The staggered economic recovery is projected to widen gaps in living standards between The staggered economic recovery is projected to widen gaps in living standards between
developing countries and others. Such differences in living standards are estimated to reflect developing countries and others. Such differences in living standards are estimated to reflect
differences in cumulative per capital income with losses in 2020 to 2022 projected to be differences in cumulative per capital income with losses in 2020 to 2022 projected to be
equivalent to 20% of 2019 global GDP, or about $18 equivalent to 20% of 2019 global GDP, or about $18 ~~trillion.~~ tril ion. The heaviest losses are estimated to The heaviest losses are estimated to
~~fall~~ fal disproportionately on low-income and emerging market economies. In addition, the IMF disproportionately on low-income and emerging market economies. In addition, the IMF
estimated that 95 estimated that 95 ~~million~~ mil ion people may have entered into extreme poverty in 2020 with 80 people may have entered into extreme poverty in 2020 with 80 ~~million~~mil ion
more people being undernourished compared to pre-pandemic levels, as (1) per capita incomes more people being undernourished compared to pre-pandemic levels, as (1) per capita incomes
would remain below the pre-pandemic levels for several years, adversely affecting productivity; would remain below the pre-pandemic levels for several years, adversely affecting productivity;
(2) the demands placed on national health systems to address the pandemic could hinder the (2) the demands placed on national health systems to address the pandemic could hinder the
treatment of other diseases; (3) business bankruptcies could reduce productivity; and (4) rising treatment of other diseases; (3) business bankruptcies could reduce productivity; and (4) rising
debt levels could crowd out potential borrowing and investment.debt levels could crowd out potential borrowing and investment.42
45 The IMF urged G-20 leaders to maintain monetary and fiscal policies to lessen the economic The IMF urged G-20 leaders to maintain monetary and fiscal policies to lessen the economic
impact of the global recession, In particular, the IMF recommended a combination of impact of the global recession, In particular, the IMF recommended a combination of
accommodative monetary policies characterized by low interest rates and central bank programs accommodative monetary policies characterized by low interest rates and central bank programs
to facilitate credit availability,to facilitate credit availability, a continuation of fiscal support for individuals and firms, and a continuation of fiscal support for individuals and firms, and
engagement in a synchronized infrastructure investment program to promote growth. According engagement in a synchronized infrastructure investment program to promote growth. According
to an IMF analysis, to an IMF analysis, ~~all~~ al other things being equal, an increase in infrastructure spending by G-20 other things being equal, an increase in infrastructure spending by G-20
countries of one-half percent of their GDP in 2021 and 1% in 2022 through 2025 would increase countries of one-half percent of their GDP in 2021 and 1% in 2022 through 2025 would increase
global GDP by 2% in 2025, compared with under 1.2% growth for an unsynchronized approach.global GDP by 2% in 2025, compared with under 1.2% growth for an unsynchronized approach.4346
In contrast to remarks by Federal Reserve Chairman Jerome In contrast to remarks by Federal Reserve Chairman Jerome ~~Powell~~ Powel in early December 2020 that in early December 2020 that
the outlook was “extraordinarily uncertain,” and that, “….significant the outlook was “extraordinarily uncertain,” and that, “….significant ~~challenges~~chal enges and uncertainties and uncertainties
remain,”remain,”4447 his assessment on March 23, 2021 before the House Financial Services Committee was his assessment on March 23, 2021 before the House Financial Services Committee was
more upbeat.more upbeat.4548 He stated that, “The recovery has progressed more quickly than He stated that, “The recovery has progressed more quickly than ~~generally~~general y
expected and looks to be strengthening.” He cautioned, however, that, “…. the sectors of the expected and looks to be strengthening.” He cautioned, however, that, “…. the sectors of the
economy most adversely affected by the resurgence of the virus, and by greater social distancing, economy most adversely affected by the resurgence of the virus, and by greater social distancing,
remain weak, and the unemployment rate—remain weak, and the unemployment rate—~~still~~ stil elevated at 6.2 percent—underestimates the elevated at 6.2 percent—underestimates the
~~shortfall~~shortfal , particularly as labor market participation remains notably below pre-pandemic levels.” , particularly as labor market participation remains notably below pre-pandemic levels.”
At the same hearing, Treasury Secretary Janet At the same hearing, Treasury Secretary Janet ~~Yellen~~Yel en stated: stated:
We are meeting at a hopeful moment for the economy – but still a daunting one. While We are meeting at a hopeful moment for the economy – but still a daunting one. While
we’re seeing signs of recovery, we should be clear-eyed about the hole we’re digging out we’re seeing signs of recovery, we should be clear-eyed about the hole we’re digging out
of: The country is still down nearly 10 million jobs from its pre-pandemic peak.of: The country is still down nearly 10 million jobs from its pre-pandemic peak.
One-in-ten homeowners with a mortgage are behind on their payments, and almost one-in- One-in-ten homeowners with a mortgage are behind on their payments, and almost one-in-
five renters are behind on their rent. There are 22 million people who say they don’t have five renters are behind on their rent. There are 22 million people who say they don’t have
enough food to eat. One-in-ten adults is hungry in America.enough food to eat. One-in-ten adults is hungry in America.
~~We know that when the foundations of someone’s life fall apart – when they lose the roof~~
~~over their head or the ability to eat dinner every night – the pain can weigh on them for~~
~~years. Their earning potential is permanently lowered. I worried about this happening on a~~
~~mass scale.46~~

42 44 Ibid, p. 36. 45 G-20 Surveillance Note, International Monetary Fund, November, 2020, p. 6. , International Monetary Fund, November, 2020, p. 6.
4346 Ibid., p. 10. Ibid., p. 10.
4447 Powell, Jerome H., Powell, Jerome H., Coronavirus Aid, Relief, and Economic Security Act, December 1 and 2, 2020. , December 1 and 2, 2020.
https://www.federalreserve.gov/newsevents/testimony/powell20201201a.htm. https://www.federalreserve.gov/newsevents/testimony/powell20201201a.htm.
4548 Powell, Jerome H., Statement before the Financial Services Committee, House of Representatives, March 23, 2021, Powell, Jerome H., Statement before the Financial Services Committee, House of Representatives, March 23, 2021,
~~46 Yellen, Janet, L., Testimony before the Financial Services Committee, House of Representatives March 23, 2021, p.~~
1.
~~Congressional Research Service~~

11

~~Global Economic Effects of COVID-19~~
Congressional Research Service 11 Global Economic Effects of COVID-19 We know that when the foundations of someone’s life fall apart – when they lose the roof over their head or the ability to eat dinner every night – the pain can weigh on them for years. Their earning potential is permanently lowered. I worried about this happening on a mass scale.49
On December 2, IMF Managing Director Kristalina Georgieva indicated the global financial On December 2, IMF Managing Director Kristalina Georgieva indicated the global financial
system had been resilient enough to withstand the impact of the global pandemic, but she urged system had been resilient enough to withstand the impact of the global pandemic, but she urged
policymakers to “act quickly” to return economic growth to its re-pandemic levels and avoid policymakers to “act quickly” to return economic growth to its re-pandemic levels and avoid
widespread financial distress.widespread financial distress.4750 The Director reportedly also urged policymakers to take “urgent, The Director reportedly also urged policymakers to take “urgent,
coordinated steps” to deliver investment in digitalcoordinated steps” to deliver investment in digital technology, infrastructure and the environment. technology, infrastructure and the environment.
She also indicated the IMF had projected that the loss of global economic output between 2020 She also indicated the IMF had projected that the loss of global economic output between 2020
and 2025 as a consequence of the pandemic would total $28 and 2025 as a consequence of the pandemic would total $28 ~~trillion~~tril ion and that 120 and that 120 ~~million~~ mil ion jobs jobs
would be lost permanently in the tourism industry alone. The pandemic-related economic would be lost permanently in the tourism industry alone. The pandemic-related economic
recession has raised concerns over the growing debt problems in developing economies, where recession has raised concerns over the growing debt problems in developing economies, where
the IMF projected that as much as 40% of banks assets were in danger of becoming distressed. the IMF projected that as much as 40% of banks assets were in danger of becoming distressed.
To date, the global pandemic has affected a broad swath of international economic and trade To date, the global pandemic has affected a broad swath of international economic and trade
activities, from services activities, from services ~~generally~~general y to tourism and hospitality, medical supplies and other global to tourism and hospitality, medical supplies and other global
value chains, consumer electronics, and financial markets to energy, transportation, food, and a value chains, consumer electronics, and financial markets to energy, transportation, food, and a
range of social activities, to name a few. In addition, the health crisis has disproportionately range of social activities, to name a few. In addition, the health crisis has disproportionately
negatively affected developing economies that are constrained by limited financial resources and negatively affected developing economies that are constrained by limited financial resources and
where health systems can quickly become overloaded. The IMF estimated in April 2021 the where health systems can quickly become overloaded. The IMF estimated in April 2021 the
economic economic ~~fallout~~fal out from the pandemic could push 95 from the pandemic could push 95 ~~million~~mil ion people in Sub-Saharan Africa and people in Sub-Saharan Africa and
South Asia into extreme poverty, reversing a decades-long trend.South Asia into extreme poverty, reversing a decades-long trend.4851 However, the IMF also However, the IMF also
concluded that spending on social programs to limit the impact of the pandemic could reduce the concluded that spending on social programs to limit the impact of the pandemic could reduce the
number of people number of people ~~falling~~ fal ing into extreme poverty to 80 to 90 into extreme poverty to 80 to 90 ~~million~~mil ion. .
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 three quarters of 2020 are speculative. Forecasts have been updated several times during the first three quarters of 2020
to incorporate additional data, to incorporate additional data, ~~initially~~ initial y reflecting worsening global and national economic growth reflecting worsening global and national economic growth
estimates, but also reflecting more positive data in the third quarter. estimates, but also reflecting more positive data in the third quarter.
Efforts to reduce social interaction to contain the spread of the virus disrupted the daily lives of Efforts to reduce social interaction to contain the spread of the virus disrupted the daily lives of
most Americans and added to the economic costs. Increased rates of unemployment raised the most Americans and added to the economic costs. Increased rates of unemployment raised the
prospects of social unrest in developed economies where lost incomes and health insurance prospects of social unrest in developed economies where lost incomes and health insurance
threaten living standards and in developing economies where populations reportedly are threaten living standards and in developing economies where populations reportedly are
concerned over access to basic necessities and the prospects of rising levels of poverty.concerned over access to basic necessities and the prospects of rising levels of poverty.4952 U.N. U.N.
Secretary General Antonio Guterres argued in a video conference before the U.N. Security Secretary General Antonio Guterres argued in a video conference before the U.N. Security
Council on AprilCouncil on April ~~10, 2020, that~~
~~[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~~
~~greatly undermine our ability to fight the disease.50~~

47 10, 2020, that 49 Yellen, Janet, L., T estimony before the Financial Services Committee, House of Representatives March 23, 2021, p. 1. 50 Wheatley, Jonathan, IMF Chief Warns Against Complacency on Global Wheatley, Jonathan, IMF Chief Warns Against Complacency on Global Economy, Economy, Financial Times, December 2, , December 2,
2020. https://www.ft.com/content/fda34b47-33d2-457e-a0b6-45be6001920d. 2020. https://www.ft.com/content/fda34b47-33d2-457e-a0b6-45be6001920d.
4851 Fiscal Monitor, International Monetary Fund, April 2021, p. 31. , International Monetary Fund, April 2021, p. 31.
4952 Sly, Liz, “ Sly, Liz, “ Stirrings of Unrest Around the World CouldStirrings of Unrest Around the World Could ~~Portend Turmoil~~ Portend T urmoil as Economies Collapse,” as Economies Collapse,” Washington Post,
April 19, 2020; Ingraham, Christopher, “Coronavirus Recession CouldApril 19, 2020; Ingraham, Christopher, “Coronavirus Recession Could Plunge Plunge ~~Tens~~T ens of Millions Into Poverty, New of Millions Into Poverty, New
Report Warns,” Report Warns,” Washington Post, April 20, 2020. https://www.washingtonpost.com/business/2020/04/20/coronavirus-, April 20, 2020. https://www.washingtonpost.com/business/2020/04/20/coronavirus-
recession-could-plunge-tens-millions-into-poverty-new-report-warns/. recession-could-plunge-tens-millions-into-poverty-new-report-warns/.
~~50 Secretary-General’s Remarks to the Security Council on the COVID-19 Pandemic, 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-~~
~~19-pandemic-delivered.~~
~~Congressional Research Service~~

12

~~Global Economic Effects of COVID-19~~
Congressional Research Service 12 Global Economic Effects of COVID-19 [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 greatly undermine our ability to fight the disease.53
Financial Markets
Policymakers and financial and commodity market participants had Policymakers and financial and commodity market participants had ~~generally~~general y estimated that a estimated that a
global economic recovery would take hold in the third quarter of 2020. A resurgence in infectious global economic recovery would take hold in the third quarter of 2020. A resurgence in infectious
cases in developed and developing countries starting in September, however, shifted more of the cases in developed and developing countries starting in September, however, shifted more of the
projected recovery to 2021. Various indicators in the third quarter suggested the worst of the projected recovery to 2021. Various indicators in the third quarter suggested the worst of the
economic crisis had passed, although the extent and strength of any global economic recovery economic crisis had passed, although the extent and strength of any global economic recovery
remained difficult to predict. Estimates indicated that China’s economy grew by 4.9% in the third remained difficult to predict. Estimates indicated that China’s economy grew by 4.9% in the third
quarter, driven by an increase in industrial production and consumer demand, marking it as one of quarter, driven by an increase in industrial production and consumer demand, marking it as one of
the few economies likely to post an the few economies likely to post an ~~overall~~ overal positive rate of growth for 2020.positive rate of growth for 2020.5154 At the same time, At the same time,
an economic recovery an economic recovery ~~stalled~~stal ed in Europe and the United States. The emergence of more infectious in Europe and the United States. The emergence of more infectious
strains of the COVID-19 virus pushed governments to re-impose lockdowns and curtail social strains of the COVID-19 virus pushed governments to re-impose lockdowns and curtail social
and economic activity during the fourth quarter. Updated forecasts indicate the pandemic could and economic activity during the fourth quarter. Updated forecasts indicate the pandemic could
negativelynegatively affect global economic growth in 2020 less negatively than had been forecasted in the affect global economic growth in 2020 less negatively than had been forecasted in the
spring, but that the effects could last longer with a slower rate of growth in 2021 and 2022.spring, but that the effects could last longer with a slower rate of growth in 2021 and 2022.
As one indicator of the economic impact of the pandemic, the Dow Jones Industrial Average As one indicator of the economic impact of the pandemic, the Dow Jones Industrial Average
Index (DJIA), along with other market indices, rose nearly three percentage points on Monday, Index (DJIA), along with other market indices, rose nearly three percentage points on Monday,
November 9, 2020, reportedly on news that a COVID-19 vaccine had been developed.November 9, 2020, reportedly on news that a COVID-19 vaccine had been developed.5255 During During
the period November 3 through 24, the DJIA rose over 9%. On November 24, 2020, the DJIA, the period November 3 through 24, the DJIA rose over 9%. On November 24, 2020, the DJIA,
along with global equities markets, increased by 1.5%, and reached an index milestone of 30,000 along with global equities markets, increased by 1.5%, and reached an index milestone of 30,000
for the first time and surpassed the previous high value recorded on February 14, 2020, prior to for the first time and surpassed the previous high value recorded on February 14, 2020, prior to
the pandemic-related economic shutdown. Reportedly, the rise in market indices reflected a the pandemic-related economic shutdown. Reportedly, the rise in market indices reflected a
positive assessment by investors of announcements of effective vaccines against COVID-19, positive assessment by investors of announcements of effective vaccines against COVID-19,
political developments in the United States, potential additional fiscal measures by governments political developments in the United States, potential additional fiscal measures by governments
to stimulate economic activity, and prospects of stronger economic growth in 2021.to stimulate economic activity, and prospects of stronger economic growth in 2021.5356
Prospects of a vaccine Prospects of a vaccine ~~initially~~ initial y signaled an eventual end to the business lockdowns and social signaled an eventual end to the business lockdowns and social
restrictions and reduced demands on policymakers to implement additionalrestrictions and reduced demands on policymakers to implement additional fiscal and monetary fiscal and monetary
policies. Until a vaccine can be broadly distributed, however, policymakers may have to weigh policies. Until a vaccine can be broadly distributed, however, policymakers may have to weigh
continuing efforts that balance the competing requirements of households, firms, and state and continuing efforts that balance the competing requirements of households, firms, and state and
local governments. Also, the impact of the currently available vaccines on new strains of the local governments. Also, the impact of the currently available vaccines on new strains of the
COVID-19 virus are being evaluated.COVID-19 virus are being evaluated.5457 Various U.S. states reversed course in late June to impose Various U.S. states reversed course in late June to impose
or re-impose social distancing guidelines and close businesses that had begun opening as a result or re-impose social distancing guidelines and close businesses that had begun opening as a result
~~of a rise in new confirmed cases of COVID-19, raising the prospect of a delayed recovery. A~~
~~prolonged recovery could also increase the financial strains on small and medium-sized firms that~~
~~face liquidity constraints and the prospects of insolvency.55~~
~~Differences in policy approaches between countries initially slowed a coordinated response. This~~
~~lack of response may have inflicted longer-term damage to the global economy by impairing~~

~~51 Hale, Thomas, Tom~~ 53 Secretary-General’s Remarks to the Security Council on the COVID-19 Pandemic, 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-19-pandemic-delivered. 54 Hale, T homas, T om Mitchell, Christian Shepherd, and Emma Zhou, “Chinese Economy Expands 4.9% in Mitchell, Christian Shepherd, and Emma Zhou, “Chinese Economy Expands 4.9% in ~~Third~~T hird
Quarter,” Quarter,” Financial ~~Times~~Tim es, October 19, 2020. https://www.ft.com/content/22108ddd-3280-4013-bcd8-1adc9e6ae13d. , October 19, 2020. https://www.ft.com/content/22108ddd-3280-4013-bcd8-1adc9e6ae13d.
~~52 Telford, Taylor~~55 T elford, T aylor, and Hamza Shaban, “, and Hamza Shaban, “ Dow ClimbsDow Climbs More More ~~Than~~T han 800 Points as Vaccine News, 800 Points as Vaccine News, ~~Biden~~ Biden Victory Rev Up Victory Rev Up
Markets,” Markets,” Washington Post, November 9, 2020. https://www.washingtonpost.com/business/2020/11/09/stocks-, November 9, 2020. https://www.washingtonpost.com/business/2020/11/09/stocks-
markets-biden-trump-coronavirus/. markets-biden-trump-coronavirus/.
5356 Smith, Colby, Camilla Smith, Colby, Camilla Hodgson, and HudsonHodgson, and Hudson Lockett ~~Lockett~~, US Stocks Set Record High, US Stocks Set Record High as Investors Look to New as Investors Look to New
Administration, Administration, Financial ~~Times~~Tim es, November 24, 2020. https://www.ft.com/content/433048a5-c489-4ddd-aebd-, November 24, 2020. https://www.ft.com/content/433048a5-c489-4ddd-aebd-
d56fb8f3edfc. d56fb8f3edfc.
5457 Didion, Didion, ~~Timothy~~T imothy, COVID-19 Vaccine Likely to be Effective Against New, COVID-19 Vaccine Likely to be Effective Against New ~~Virus~~ Virus Strain, Experts Say, Strain, Experts Say, ABC News, ,
December 26, 2020. https://abc7news.com/covid-uk-new-strain-of-vaccine-effectiveness-stain/8988644/. December 26, 2020. https://abc7news.com/covid-uk-new-strain-of-vaccine-effectiveness-stain/8988644/.
~~55 Global Financial Stability Report, International Monetary Fund, October 2020, p. 1.~~
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Congressional Research Service 13 Global Economic Effects of COVID-19 of a rise in new confirmed cases of COVID-19, raising the prospect of a delayed recovery. A prolonged recovery could also increase the financial strains on smal and medium-sized firms that face liquidity constraints and the prospects of insolvency.58 Differences in policy approaches between countries initial y slowed a coordinated response. This lack of response may have inflicted longer-term damage to the global economy by impairing international political, trade, and economic relations, particularly between countries that international political, trade, and economic relations, particularly between countries that
promoted nationalism and those that argued for a coordinated international response to the promoted nationalism and those that argued for a coordinated international response to the
pandemic. Policy differences also strained relations between developed and developing pandemic. Policy differences also strained relations between developed and developing
economies and between northern and southern members of the Eurozone, economies and between northern and southern members of the Eurozone, ~~challenging alliances~~chal enging al iances
and conventional concepts of national security, and raising questions about the future of global and conventional concepts of national security, and raising questions about the future of global
leadership.leadership.
In some countries, the pandemic elevated the importance of public health as a national security In some countries, the pandemic elevated the importance of public health as a national security
issue and as a national economic priority on a par with traditional national security concerns such 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.as terrorism, cyberattacks, and proliferation of weapons of mass destruction.5659 The pandemic- The pandemic-
related economic and human costs could have long-term repercussions for economies through the 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 businesses. Fiscal and 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 economic activity may monetary measures implemented to prevent a financial crisis and sustain economic activity may
have inadvertently worsened income and wealth disparities that were being affected by the have inadvertently worsened income and wealth disparities that were being affected by the
disproportionate impact of quarantines and lockdowns on services sector workers. Within some disproportionate impact of quarantines and lockdowns on services sector workers. Within some
countries, the economic countries, the economic ~~fallout~~fal out may have widened racial and socio-economic cleavages and may have widened racial and socio-economic cleavages and
increased social unrest. In speaking about these costs for Americans, Federal Reserve Chairman increased social unrest. In speaking about these costs for Americans, Federal Reserve Chairman
~~Powell~~ Powel said on May 19, 2020, said on May 19, 2020,
Since the pandemic arrived in force just two months ago, more than 20 million people have Since the pandemic arrived in force just two months ago, more than 20 million people have
lost their jobs, reversing nearly 10 years of job gains. This precipitous drop in economic lost their jobs, reversing nearly 10 years of job gains. This precipitous drop in economic
activity has caused a level of pain that is hard to capture in words, as lives are upended activity has caused a level of pain that is hard to capture in words, as lives are upended
amid great uncertainty about the future.amid great uncertainty about the future.5760
BEA BEA reported that U.S. GDP reported that U.S. GDP ~~fell~~ fel by 9.0% in the second quarter of 2020 compared with the by 9.0% in the second quarter of 2020 compared with the
previous quarter, or at an annualized rate of -31%, the largest quarterly decline in U.S. GDP previous quarter, or at an annualized rate of -31%, the largest quarterly decline in U.S. GDP
recorded over the past 70 years.recorded over the past 70 years.5861 Additional data, however, indicated that U.S. GDP grew by Additional data, however, indicated that U.S. GDP grew by
7.5% in the third quarter, or at an annualized rate of 33%, based primarily on gains in personal 7.5% in the third quarter, or at an annualized rate of 33%, based primarily on gains in personal
consumption, reflecting an increase in income and continued government income support.consumption, reflecting an increase in income and continued government income support.5962
Fourth quarter 2020 data indicate the U.S. economy grew by 1.0% over the third quarter, or at an Fourth quarter 2020 data indicate the U.S. economy grew by 1.0% over the third quarter, or at an
annualized rate of 4.0%. On a year-over-year basis, U.S. real GDP is estimated to have declined annualized rate of 4.0%. On a year-over-year basis, U.S. real GDP is estimated to have declined
by 3.5% in 2020 compared with 2019.by 3.5% in 2020 compared with 2019.60
~~In its December 2, 2020, Beige Book analysis, the Federal Reserve (Fed) reported that economic~~
~~activity had increased modestly in each of the 12 Federal Reserve districts during the third~~
~~quarter, although economic activity remained below average levels. Four of the Districts reported~~
~~little or no growth, while five indicated that economic activity remained below pre-pandemic~~
~~levels for at least some sectors. The manufacturing, distribution and logistics, residential housing,~~
~~and homebuilding sectors reported positive increases in economic activity. Businesses, however,~~

5663 58 Global Financial Stability Report, International Monetary Fund, October 2020, p. 1. 59 Harris, Shane and Missy Ryan, Harris, Shane and Missy Ryan, ToT o Prepare for the Next Pandemic, the U.S. Needs Prepare for the Next Pandemic, the U.S. Needs to Change its National Security to Change its National Security
Priorities, Experts Say, Priorities, Experts Say, 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.
5760 Powell, Jerome H. Powell, Jerome H. Coronavirus and CARES Act, ~~Testimony~~T estimony before the Committee on Banking, Housing and Urban before the Committee on Banking, Housing and Urban
Affairs, U.S.Affairs, U.S. Senate, May 19, 2020. Senate, May 19, 2020.
5861 Gross Domestic Product, 2nd Quarter 2020 (Advance Estimate) and Annual Update, Bureau of Economic Analysis, , Bureau of Economic Analysis,
JulyJuly 30, 2020. https://www.bea.gov/news/2020/gross-domestic-product30, 2020. https://www.bea.gov/news/2020/gross-domestic-product -2nd-quarter-2020-advance-estimate-and--2nd-quarter-2020-advance-estimate-and-
annual-update. annual-update.
5962 Gross Domestic Product, Third Quarter 2020 (Advance Estimate), Bureau of Economic Analysis, October 29, 2020. Bureau of Economic Analysis, October 29, 2020.
6063 Gross Domestic Product, Fourth Quarter and Year 2020 (Advance Estimate), Bureau of Economic Analysis, January Bureau of Economic Analysis, January
28, 2021. 28, 2021.
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In its December 2, 2020, Beige Book analysis, the Federal Reserve (Fed) reported that economic activity had increased modestly in each of the 12 Federal Reserve districts during the third quarter, although economic activity remained below average levels. Four of the Districts reported little or no growth, while five indicated that economic activity remained below pre-pandemic levels for at least some sectors. The manufacturing, distribution and logistics, residential housing, and homebuilding sectors reported positive increases in economic activity. Businesses, however, raised concerns over renewed infections, actual and prospective restrictions, and expiring raised concerns over renewed infections, actual and prospective restrictions, and expiring
unemployment benefits and evictions or foreclosures.unemployment benefits and evictions or foreclosures.61
64 Similarly, in its February 2021 Beige Book, the Federal Reserve determined that economic Similarly, in its February 2021 Beige Book, the Federal Reserve determined that economic
activity activity ~~overall~~ overal had increased modestly from January to mid-February and that most businesses had increased modestly from January to mid-February and that most businesses
expected an economic recovery by summer. Of the 12 districts, 10 experienced modest increases expected an economic recovery by summer. Of the 12 districts, 10 experienced modest increases
in economic growth, while the New York District recorded mixed performance and the St. Louis in economic growth, while the New York District recorded mixed performance and the St. Louis
District recorded little change in economic activity during the period.District recorded little change in economic activity during the period.6265 The April The April 14, 2021 Beige 14, 2021 Beige
Book analysis also reported the economy had begun recovering in the February to April period. Book analysis also reported the economy had begun recovering in the February to April period.
This recovery reflected growth in consumer spending as a result of the easing of pandemic-related This recovery reflected growth in consumer spending as a result of the easing of pandemic-related
restrictions in numerous jurisdictions, increased vaccinations, and recent stimulus payments, restrictions in numerous jurisdictions, increased vaccinations, and recent stimulus payments,
among other factors.among other factors.6366 Half the Federal Reserve Districts reported an increase in manufacturing Half the Federal Reserve Districts reported an increase in manufacturing
production, despite shortages of microchips in some sectors. The largest gains in activity by production, despite shortages of microchips in some sectors. The largest gains in activity by
industry also included construction, leisure, and hospitality sectors. industry also included construction, leisure, and hospitality sectors.
Country Responses
In Europe, governments attempted a phased reopening of businesses over the summer. In Europe, governments attempted a phased reopening of businesses over the summer.6467 As a As a
result of these efforts, the Eurozone experienced a 12.5% increase in GDP in the third quarter of result of these efforts, the Eurozone experienced a 12.5% increase in GDP in the third quarter of
2020. Initial estimates indicate the EU economic rate of growth nearly 2020. Initial estimates indicate the EU economic rate of growth nearly ~~stalled~~stal ed in the fourth in the fourth
quarter, quarter, ~~falling~~fal ing by 0.5% due to a resumption of lockdown measures. After several months of data by 0.5% due to a resumption of lockdown measures. After several months of data
indicating an economic rebound had begun in the Eurozone, surveys of business activity in indicating an economic rebound had begun in the Eurozone, surveys of business activity in
August indicated the recovery had slowed amid an increase in new COVID-19 cases after August indicated the recovery had slowed amid an increase in new COVID-19 cases after
countries had begun re-imposing new quarantines and lockdowns in various parts of the Euro countries had begun re-imposing new quarantines and lockdowns in various parts of the Euro
area, although most lockdowns did not include schools or some manufacturing firms.area, although most lockdowns did not include schools or some manufacturing firms.6568 Such Such
lockdowns became more widespread in September and October as infections cases began rising lockdowns became more widespread in September and October as infections cases began rising
in Germany, France, the United Kingdom, the Czech Republic, the Netherlands, Spain, and in Germany, France, the United Kingdom, the Czech Republic, the Netherlands, Spain, and
Poland.Poland.6669 By mid-October, Greece and Belgium also had begun implementing By mid-October, Greece and Belgium also had begun implementing ~~business~~
~~lockdowns and social distancing measures. Germany reportedly closed bars, restaurants, and most~~
~~public entertainment, France closed bars and restaurants and imposed travel restrictions, and on~~
~~October 31, UK Prime Minister Boris Johnson announced a month-long lockdown across the~~
~~UK.67~~

61 business 64 The Beige Book: Summary of Commentary on Current Economic Conditions by Federal Reserve District,, the Federal the Federal
Reserve System, December 2, 2020. https://www.federalreserve.gov/monetarypolicy/beige-book-default.htm. Reserve System, December 2, 2020. https://www.federalreserve.gov/monetarypolicy/beige-book-default.htm.
6265 The Beige Book: Summary of Commentary on Current Economic Conditions by Federal Reserve District,, the Federal the Federal
Reserve System, March 3, 2021. https://www.federalreserve.gov/monetarypolicy/beige-book-default.htm. Reserve System, March 3, 2021. https://www.federalreserve.gov/monetarypolicy/beige-book-default.htm.
6366 The Beige Book: Summary of Commentary on Current Economic Conditions by Federal Reserve District,, the Federal the Federal
Reserve System, April 14, 2021. https://www.federalreserve.gov/monetarypolicy/beige-book-default.htm. Reserve System, April 14, 2021. https://www.federalreserve.gov/monetarypolicy/beige-book-default.htm.
6467 Stott, Michael, Coronavirus Set to Push 29m Latin Americans Into Poverty, 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~~T hreatens Livelihoods of 59m European Workers, Livelihoods of 59m European Workers, Financial ~~Times~~Tim es, 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~~Tim es, 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.
6568 Arnold, Martin, Eurozone Economic Rebound is Arnold, Martin, Eurozone Economic Rebound is Losing Steam, SurveysLosing Steam, Surveys Suggest,Suggest, Financial Times, August, August 21, 2020. 21, 2020.
https://www.ft.com/content/cc4fa3df-40e7-4e19-be9f-9d01efb74f69. Chazan, Guy and Anna Gross,https://www.ft.com/content/cc4fa3df-40e7-4e19-be9f-9d01efb74f69. Chazan, Guy and Anna Gross, Europe Battles to Europe Battles to
Contain SurgeContain Surge in Coronavirus Cases.in Coronavirus Cases. Financial ~~Times~~Tim es, July, July 29, 2020. https://www.ft.com/content/bcddc297-b7f2-444d-29, 2020. https://www.ft.com/content/bcddc297-b7f2-444d-
908f-54e8ce6f4f98. 908f-54e8ce6f4f98.
6669 Lockdown 2.0: Europe Imposes Painful Curbs Lockdown 2.0: Europe Imposes Painful Curbs as as Infections Surge, Infections Surge, Financial Times, October 16, 2020. , October 16, 2020.
~~https://www.ft.com/content/b1a7d1e8-4bb9-41cf-be5b-2f7f04bdb9bb.~~
~~67 Peel, Michael, European Countries Impose Shutdowns as Covid-19 Cases Rise, Financial Times, October 30, 2020.~~
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~~Global Economic Effects of COVID-19~~

Congressional Research Service 15 Global Economic Effects of COVID-19 lockdowns and social distancing measures. Germany reportedly closed bars, restaurants, and most public entertainment, France closed bars and restaurants and imposed travel restrictions, and on October 31, UK Prime Minister Boris Johnson announced a month-long lockdown across the UK.70 The European Commission’s (EC) February 2021 forecast projected that EU economic growth in The European Commission’s (EC) February 2021 forecast projected that EU economic growth in
2020 could have contracted by 7.4% and may 2020 could have contracted by 7.4% and may ~~partially~~partial y recover in 2021 with a projected rate of recover in 2021 with a projected rate of
growth of 4.1%.growth of 4.1%.6871 The EC forecast indicated a The EC forecast indicated a ~~smaller~~smal er drop in gross domestic product (GDP) in drop in gross domestic product (GDP) in
2020 among European economies than it had forecasted in its summer report, as a result of a third 2020 among European economies than it had forecasted in its summer report, as a result of a third
quarter rebound in growth before an anticipated slow-down in the fourth quarter as a result of the quarter rebound in growth before an anticipated slow-down in the fourth quarter as a result of the
resumption of business lockdowns. The autumn forecast was published prior to the announcement resumption of business lockdowns. The autumn forecast was published prior to the announcement
of potential COVID-19 vaccines and incorporated assumptions of lockdowns extending into of potential COVID-19 vaccines and incorporated assumptions of lockdowns extending into
2021. The forecast also concluded that the speed of an economic recovery in 2021 likely would 2021. The forecast also concluded that the speed of an economic recovery in 2021 likely would
vary across the EU members, reflecting differences in the severity of the pandemic and the extent vary across the EU members, reflecting differences in the severity of the pandemic and the extent
of containment measures, but also differences in economic structures and policy responses.of containment measures, but also differences in economic structures and policy responses.69
72 Fourth quarter data indicate that economic growth in the EU decreased by 0.7% from the third Fourth quarter data indicate that economic growth in the EU decreased by 0.7% from the third
quarter of 2020, but was down by 4.8% compared with the same quarter in 2019.quarter of 2020, but was down by 4.8% compared with the same quarter in 2019.7073 The decline in The decline in
economic activity primarily reflected a drop in consumer spending of 3.0% from the previous economic activity primarily reflected a drop in consumer spending of 3.0% from the previous
quarter. Fourth quarter data also indicated the UK economy grew by 1.3%, compared with a rate quarter. Fourth quarter data also indicated the UK economy grew by 1.3%, compared with a rate
of growth of 16.9% in the third quarter and a decline of 19.5% in the second quarter, the largest of growth of 16.9% in the third quarter and a decline of 19.5% in the second quarter, the largest
quarterly decline on record. Eurostat, the statistical office of the European Commission, released quarterly decline on record. Eurostat, the statistical office of the European Commission, released
data indicating the Eurozone experienced price inflation in the fourth quarter of about 0.2%.data indicating the Eurozone experienced price inflation in the fourth quarter of about 0.2%.
After protracted talks, European leaders agreed on July 21 to a new €750 After protracted talks, European leaders agreed on July 21 to a new €750 ~~billion~~ bil ion (about $859 (about $859
~~billion)~~ bil ion) pandemic economic assistance package to support European economies. Draft budget pandemic economic assistance package to support European economies. Draft budget
estimates submitted by Eurozone governments in the estimates submitted by Eurozone governments in the ~~fall~~ fal of 2020 indicated the countries could of 2020 indicated the countries could
experience a combined budget deficit of nearly €1 experience a combined budget deficit of nearly €1 ~~trillion,~~ tril ion, or equivalent to about 9% of their or equivalent to about 9% of their
annual GDP.annual GDP.7174 The rise in budget deficits reflects the growing cost to governments of supporting The rise in budget deficits reflects the growing cost to governments of supporting
their economies to sustain economic activity and a marked change in attitudes toward budget their economies to sustain economic activity and a marked change in attitudes toward budget
deficits also reflected in statements by the IMF and World Bank. Second quarter data also deficits also reflected in statements by the IMF and World Bank. Second quarter data also
indicated that employment among EU countries indicated that employment among EU countries ~~fell~~ fel by 2.6%, or 5.5 by 2.6%, or 5.5 ~~million~~mil ion jobs in 2020. The jobs in 2020. The
jobs data, however, do not include roughly 45 jobs data, however, do not include roughly 45 ~~million~~ mil ion people, or a third of the workforce in people, or a third of the workforce in
Germany, France, Britain, Italy, and Spain, that were covered by employment protection Germany, France, Britain, Italy, and Spain, that were covered by employment protection
programs.programs.72
75 Similarly, Japan reported that its economy contracted by 8.2% in the second quarter of 2020, Similarly, Japan reported that its economy contracted by 8.2% in the second quarter of 2020,
compared with the previous quarter, or at an annual rate of 32%.compared with the previous quarter, or at an annual rate of 32%.7376 In the third quarter, however, https://www.ft.com/content/b1a7d1e8-4bb9-41cf-be5b-2f7f04bdb9bb. 70 Peel, Michael, European Countries Impose Shutdowns as Covid-19 Cases Rise, Financial Times, October 30, 2020. ~~In the third quarter, however,~~
~~the economy grew at a positive rate of 5.3%, while the economy grew by a rate of 2.8% in the~~
~~fourth quarter on a quarter over quarter basis. On an annual basis, however, Japan’s economic~~
~~growth rate fell to 4.8%, the first negative annual rate of growth experienced since 2009.~~
~~On September 10, 2020, European Central Bank (ECB) President Christine Lagarde indicated the~~
~~Eurozone economy could contract by 8% in 2020, but the rate of growth was projected to~~

https://www.ft.com/content/a89f89ba-08be-44e2-8d21-3e9ada605e17; Packard, Jim, Boris Johnson Announces Second https://www.ft.com/content/a89f89ba-08be-44e2-8d21-3e9ada605e17; Packard, Jim, Boris Johnson Announces Second
Lockdown for England, Lockdown for England, Financial ~~Times~~Tim es, October 31, 2020, https://www.ft.com/content/8c2ede22-9dcf-4d31-81ef-, October 31, 2020, https://www.ft.com/content/8c2ede22-9dcf-4d31-81ef-
82ae4ee76e10. 82ae4ee76e10.
6871 European Economic Forecast Winter 2020, European Commission, February 2021. , European Commission, February 2021.
6972 Ibid., p. 2. Ibid., p. 2.
7073 Newsrelease, Eurostat, February 2, 2020. Eurostat, February 2, 2020.
7174 Arnold, Martin and Sam Arnold, Martin and Sam Fleming, Eurozone BudgetFleming, Eurozone Budget Deficits RiseDeficits Rise Nearly Nearly ~~Tenfold~~T enfold to Counter Pandemic, to Counter Pandemic, Financial
~~Times~~Tim es, October 19, 2020. https://www.ft.com/content/5579361f-5aac-4cd3-9e93-190fffdc0baf. , October 19, 2020. https://www.ft.com/content/5579361f-5aac-4cd3-9e93-190fffdc0baf.
7275 Ben Hall, Ben, Delphine Strauss, Ben Hall, Ben, Delphine Strauss, and Daniel Dombey, Millions of European Jobsand Daniel Dombey, Millions of European Jobs at Risk When Furloughat Risk When Furlough Support Support
Ends, Ends, Financial ~~Times~~Tim es, August August 14, 2020. https://www.ft.com/content/0f01a9ed-5b15-4e2d-921c-6eed7a80d0bd. 14, 2020. https://www.ft.com/content/0f01a9ed-5b15-4e2d-921c-6eed7a80d0bd.
7376 Quarterly Estimates of GDP for April - June 2020 (First Preliminary Estimates), Cabinet Office, August Cabinet Office, August 17, 2020. 17, 2020.
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~~partially recover in 2021 by growing at an annual rate of 5.0%.74~~the economy grew at a positive rate of 5.3%, while the economy grew by a rate of 2.8% in the fourth quarter on a quarter over quarter basis. On an annual basis, however, Japan’s economic growth rate fel to 4.8%, the first negative annual rate of growth experienced since 2009. On September 10, 2020, European Central Bank (ECB) President Christine Lagarde indicated the Eurozone economy could contract by 8% in 2020, but the rate of growth was projected to partial y recover in 2021 by growing at an annual rate of 5.0%.77 In the early stages of the In the early stages of the
pandemic, foreign investors pulled an estimated $26 pandemic, foreign investors pulled an estimated $26 ~~billion~~ bil ion out of developing Asian economies out of developing Asian economies
not including more than $16 not including more than $16 ~~billion~~ bil ion out of India, increasing concerns about a major economic out of India, increasing concerns about a major economic
recession in Asia. Some estimates indicate that 29 recession in Asia. Some estimates indicate that 29 ~~million~~ mil ion people in Latin America could people in Latin America could ~~fall~~ fal into into
poverty, reversing a decade of efforts to narrow income inequality. Some analysts also expressed poverty, reversing a decade of efforts to narrow income inequality. Some analysts also expressed
concern that Africa, after escaping the initial spread of infections, could face a sharp increase in concern that Africa, after escaping the initial spread of infections, could face a sharp increase in
rates of infection outside South Africa, Egypt, Nigeria, Algeria, and Ghana, where most of the rates of infection outside South Africa, Egypt, Nigeria, Algeria, and Ghana, where most of the
~~initial~~ initial infections had occurred.infections had occurred.75
78 In October 2020, the Bank of Canada indicated that Canada’s quarterly rate of growth declined by In October 2020, the Bank of Canada indicated that Canada’s quarterly rate of growth declined by
13.0% in the second quarter of 2020, but by 4.4% in the third quarter as business and other 13.0% in the second quarter of 2020, but by 4.4% in the third quarter as business and other
restrictions were relaxed and by a rebound in home sales. The Bank also estimated that growth restrictions were relaxed and by a rebound in home sales. The Bank also estimated that growth
for 2020 would decline at an annual rate of 4.3% in 2020, but could increase by about 3.8% in for 2020 would decline at an annual rate of 4.3% in 2020, but could increase by about 3.8% in
2021. On December 1, the Canadian government adopted a C$1 2021. On December 1, the Canadian government adopted a C$1 ~~trillion~~ tril ion spending package to spending package to
support economic growth, reportedly the largest such fiscal stimulus package adopted in the post-support economic growth, reportedly the largest such fiscal stimulus package adopted in the post-
World War II period.World War II period.7679 The package provided relief to provinces and territories to improve The package provided relief to provinces and territories to improve
infection in long-term care facilities, industries hard hit by the pandemic, such as tourism, travel infection in long-term care facilities, industries hard hit by the pandemic, such as tourism, travel
and arts, and provide loans to eligibleand arts, and provide loans to eligible businesses and to lower and middle income families. businesses and to lower and middle income families.
In April In April 2021, India reported that in the second quarter its GDP growth rate 2021, India reported that in the second quarter its GDP growth rate ~~fell~~ fel by 25.8% by 25.8%
compared with the first quarter, raising concerns that the country could experience its most severe compared with the first quarter, raising concerns that the country could experience its most severe
economic contraction on record.economic contraction on record.7780 Subsequent forecasts indicate that India’s economy grew by Subsequent forecasts indicate that India’s economy grew by
23.7% in the third quarter of 2020, reportedly reflecting higher levels of consumer activity, and 23.7% in the third quarter of 2020, reportedly reflecting higher levels of consumer activity, and
by 7.9% in the fourth quarter.by 7.9% in the fourth quarter.7881 On an annual basis, India’s economy reportedly grew at a rate of On an annual basis, India’s economy reportedly grew at a rate of
-3.5%. On November 12, India’s finance minister announced a new package of fiscal measures -3.5%. On November 12, India’s finance minister announced a new package of fiscal measures
totaling $35 totaling $35 ~~billion~~ bil ion to increase consumer spending and to assist manufacturing, agriculture, and to increase consumer spending and to assist manufacturing, agriculture, and
exports. The move followed an announcement by India’s cabinet that it had approved a spending exports. The move followed an announcement by India’s cabinet that it had approved a spending
package of $27 package of $27 ~~billion~~ bil ion to provide incentives over five years to manufacturing firms, including to provide incentives over five years to manufacturing firms, including
automobiles, auto parts, pharmaceuticals, textiles, and food products.automobiles, auto parts, pharmaceuticals, textiles, and food products.7982
As a consequence of the resurgence in cases and renewed lockdowns in economies, the IMF As a consequence of the resurgence in cases and renewed lockdowns in economies, the IMF
argued that advanced economies needed to sustain fiscal support for consumers and businesses as argued that advanced economies needed to sustain fiscal support for consumers and businesses as
the most effective means of stimulating their economies. The IMF argued this support was the most effective means of stimulating their economies. The IMF argued this support was
~~necessary because the global economy was experiencing what economists term a Keynesian~~
~~liquidity trap, named after economist John Maynard Keynes. In theoretical terms, a liquidity trap~~
~~exists when central banks’ key interest rates are so low they have little impact through traditional~~
~~means to affect business and consumer activity. According to the IMF, in 60% of the global~~
~~economy, central banks have pushed key interest rates below 1% and in one-fifth of the global~~
~~economy, interest rates are below zero. In these circumstances, adjusting fiscal policy, or~~

74 77 Remarks by ECB President Christine Lagarde, Remarks by ECB President Christine Lagarde, press conference, September 10, 2020.press conference, September 10, 2020.
75 78 Pilling, David, Pilling, David, ~~The~~ T he Pandemic is Getting Worse: Africa Prepares for Surge Pandemic is Getting Worse: Africa Prepares for Surge in Infections, in Infections, Financial Times, July 20, , July 20,
2020. https://www.ft.com/content/1b3274ce-de3b-411d-8544-a024e64c3542. 2020. https://www.ft.com/content/1b3274ce-de3b-411d-8544-a024e64c3542.
7679 Canada Unveils Largest Economic Relief Package Since Canada Unveils Largest Economic Relief Package Since WW2, BBC News,WW2, BBC News, December 1, 2020. December 1, 2020.
https://www.bbc.com/news/world-us-canada-55139229. https://www.bbc.com/news/world-us-canada-55139229.
7780 Slater, Joanna, India’s Economy Contracts by Nearly 24%, It’s Sharpest Drop On Record, Slater, Joanna, India’s Economy Contracts by Nearly 24%, It’s Sharpest Drop On Record, Washington Post, August , August
31, 2020. https://www.washingtonpost.com/world/asia_pacific/indias-economy-contracts-by-nearly-24-percent-amid-31, 2020. https://www.washingtonpost.com/world/asia_pacific/indias-economy-contracts-by-nearly-24-percent-amid-
pandemic/2020/08/31/92318fbe-eb70-11ea-bd08-1b10132b458f_story.html?hpid=hp_world-rightpandemic/2020/08/31/92318fbe-eb70-11ea-bd08-1b10132b458f_story.html?hpid=hp_world-right -4-0_world-latest--4-0_world-latest-
feed%3Ahomepage%2Fstory-ans. feed%3Ahomepage%2Fstory-ans.
7881 RBI Bulletin – November 2020, Reserve Bank of India, November 2020. , Reserve Bank of India, November 2020.
7982 Sharma, Ashok, India Announces $35 Billion Economic Stimulus Sharma, Ashok, India Announces $35 Billion Economic Stimulus Package, Package, ABCNews,, November 12, 2020. November 12, 2020.
https://abcnews.go.com/International/wireStory/india-announces-35-billion-economic-stimulus-package-74165709. https://abcnews.go.com/International/wireStory/india-announces-35-billion-economic-stimulus-package-74165709.
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necessary because the global economy was experiencing what economists term a Keynesian liquidity trap, named after economist John Maynard Keynes. In theoretical terms, a liquidity trap exists when central banks’ key interest rates are so low they have little impact through traditional means to affect business and consumer activity. According to the IMF, in 60% of the global economy, central banks have pushed key interest rates below 1% and in one-fifth of the global economy, interest rates are below zero. In these circumstances, adjusting fiscal policy, or government taxing and spending, is more effective in raising the rate of economic growth.government taxing and spending, is more effective in raising the rate of economic growth.8083 The The
IMF concluded that, “Fiscal policy must play a leading role in the recovery.” IMF concluded that, “Fiscal policy must play a leading role in the recovery.”
Economic Policy Responses
After a delayed response, central banks and monetary authorities in developed and emerging 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 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 national governments have adopted an array of fiscal policy initiatives to stimulate their
economies. The Bank for International Settlements (BIS) characterized the pandemic as fully economies. The Bank for International Settlements (BIS) 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 the evolving nature of the health global financial crisis of 2008-2009. In addition, the BIS argues the evolving nature of the health
crisis is causing the financial crisis to evolve as crisis is causing the financial crisis to evolve as ~~well~~wel , changing from a liquidity, changing from a liquidity crisis in the initial crisis in the initial
stages to a solvency crisis that could worsen if the economic recovery is delayed. As a result of 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 that future 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 century.”economic historians may describe the pandemic as, “the defining moment of the 21st century.”81
84 Industry Measures
During 2020, governments adopted a range of measures at both the national and international During 2020, governments adopted a range of measures at both the national and international
level to address the health and economic consequences of the COVID-19 pandemic, as indicated level to address the health and economic consequences of the COVID-19 pandemic, as indicated
in in Table 1..8285 These measure include incentives to increase domestic production of vaccines and These measure include incentives to increase domestic production of vaccines and
personal protective equipment (PPE) and direct state intervention through nationalization or personal protective equipment (PPE) and direct state intervention through nationalization or
through directives to increase output at facilities that currently produced PPE materials or to through directives to increase output at facilities that currently produced PPE materials or to
initiateinitiate production at other facilities. In some cases, policy changes include enhanced foreign production at other facilities. In some cases, policy changes include enhanced foreign
investment screening of foreign investment for “public interest” reasons that may remain after the investment screening of foreign investment for “public interest” reasons that may remain after the
pandemic crisis.pandemic crisis.83
86 The shift in approach toward the national security dimensions of foreign investment, The shift in approach toward the national security dimensions of foreign investment, ~~especially~~especial y
by developed economies, has tended to blur the distinction between foreign investment, trade, and by developed economies, has tended to blur the distinction between foreign investment, trade, and
national security and reflects the evolving nature of the concept of national security relative to national security and reflects the evolving nature of the concept of national security relative to
foreign investment. Conceivably, changes in technology and the global economy have made it foreign investment. Conceivably, changes in technology and the global economy have made it
more difficult to assess the economic costs and benefits of changes in foreign investment policies more difficult to assess the economic costs and benefits of changes in foreign investment policies
taken on national security grounds. 83 Gopinath, Gita, Global Liquidity T rap Requires a Big Fiscal ~~taken on national security grounds.~~
~~Table 2. Investment Policy Instruments Adopted at the National and International~~
~~level to Address the COVID-19 Pandemic~~
~~Investment policy areas~~
~~Policy measures~~
~~Policy actions at the national level~~
~~Investment facilitation~~
~~Alleviate administrative burdens and bureaucratic~~
~~obstacles for firms.~~

~~Use of online tools and e-platforms.~~

~~80 Gopinath, Gita, Global Liquidity Trap Requires a Big Fiscal~~ Response, Response, Financial Times, November 3, 2020, , November 3, 2020,
https://www.ft.com/content/2e1c0555-d65b-48d1-9af3-825d187eec58. https://www.ft.com/content/2e1c0555-d65b-48d1-9af3-825d187eec58.
8184 Annual Economic Report 2020, Bank for International Settlements, June 2020, p. ix. , Bank for International Settlements, June 2020, p. ix.
8285 Countries include Countries include Australia, Canada,Australia, Canada, the European Union, France, Germany, Hungary, Italy, the European Union, France, Germany, Hungary, Italy, ~~India~~I ndia, Japan, Poland, , Japan, Poland,
and Spain, among others. and Spain, among others. World ~~Investment~~Investm ent Report 2020, United Nations Conference on , United Nations Conference on ~~Trade~~T rade and Development 2020, and Development 2020,
p. 93. p. 93.
8386 World Investment Report 2020, United Nations Conference on , United Nations Conference on ~~Trade~~T rade and Development, June 16, 2020, p. 96. and Development, June 16, 2020, p. 96.
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~~Investment policy areas~~
~~Policy measures~~Table 2. Investment Policy Instruments Adopted at the National and International level to Address the COVID-19 Pandemic Investment policy areas Policy measures Policy actions at the national level Investment facilitation Al eviate administrative burdens and bureaucratic obstacles for firms. Use of online tools and e-platforms.
Investment retention and aftercare by investment Investment retention and aftercare by investment
COVID-19-related information services. COVID-19-related information services.
promotion agencies (IPAs) promotion agencies (IPAs)

Administrative Administrative and operational support during the and operational support during the
crisis. crisis.

Move to online services. Move to online services.
Investment incentives Investment incentives
Financial or fiscal incentives to produce COVID-19- Financial or fiscal incentives to produce COVID-19-
related medicalrelated medical equipment. equipment.

Incentives for conversion of production lines. Incentives for conversion of production lines.

Incentives for enhancement of contracted economic Incentives for enhancement of contracted economic
activities. activities.
State participation in crisis-affected State participation in crisis-affected industries industries
Acquisition of equity in companies, Acquisition of equity in companies, including including
nationalization. nationalization.
Local Local ~~small~~ smal and mediumand medium ~~enterprises~~ enterprises (SMEs) and supply (SMEs) and supply
Financial or fiscal support for domestic suppliers Financial or fiscal support for domestic suppliers (such (such
chains chains
as SMEs). as SMEs).
National security and public health National security and public health
Application and potential reinforcement Application and potential reinforcement of FDI of FDI
screening in pandemic-relevant industries. screening in pandemic-relevant industries.
Other State intervention in the health industry Other State intervention in the health industry
Mandatory production. Mandatory production.

Export bans. Export bans.

Import facilitation. Import facilitation.
~~Intellectual~~Intel ectual property (IP) property (IP)
General General authorization of non-voluntary licensing,authorization of non-voluntary licensing, to to
speed up research and development (R&D). speed up research and development (R&D).

IP holder-specific non-voluntary licensing, IP holder-specific non-voluntary licensing, to enable to enable
importsimports of medication. of medication.
Policy actions at the international level
International support measures International support measures for investmentfor investment
International pledges in support of cross-border International pledges in support of cross-border
investment. investment.
IIAs IIAs
Reform International Investment Agreements Reform International Investment Agreements (IIAs) to (IIAs) to
support public health policiessupport public health policies and to minimizeand to minimize investor–investor–
State dispute risks. State dispute risks.
~~Intellectual~~Intel ectual property (IP) property (IP)
General General authorization of non-voluntary licensing,authorization of non-voluntary licensing, to to
speed up research and development (R&D). speed up research and development (R&D).
Source: World Investment Report 2020, United Nations Conference on Trade and Development,, United Nations Conference on Trade and Development, June 16, 2020, June 16, 2020,
p. 89. p. 89.
Fiscal Measures
As indicated in As indicated in Table 2, central governments adopted various fiscal measures to provide financial , central governments adopted various fiscal measures to provide financial
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
Congressional Research Service 19 link to page 26 link to page 26 link to page 26 Global Economic Effects of COVID-19 vary by country.87~~vary by country.84~~ These measures broadly include tax cuts and tax deferrals for individuals and These measures broadly include tax cuts and tax deferrals for individuals and
businesses, wage and income supplements to individuals, including expanding unemployment businesses, wage and income supplements to individuals, including expanding unemployment
insurance, and other payments to businesses. The U.S. Congress also approved historic fiscal insurance, and other payments to businesses. The U.S. Congress also 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

~~84 Ibid.~~
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~~link to page 25 link to page 25 link to page 25~~ ~~Global Economic Effects of COVID-19~~

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.85
88 In developed economies, however, as governments adopted fiscal packages to assist households, In developed economies, however, as governments adopted fiscal packages to assist households,
consumers sharply increased their savings as they faced limited spending opportunities, or a form consumers sharply increased their savings as they faced limited spending opportunities, or a form
of involuntary saving, and concerns over lost jobs, incomes, and the course of their economies, or of involuntary saving, and concerns over lost jobs, incomes, and the course of their economies, or
precautionary saving. (For additional countries and measures, see precautionary saving. (For additional countries and measures, see Appendix A of this report.) of this report.)
International organizations also took steps to provide loans and other financial assistance to International organizations also took steps to provide loans and other financial assistance to
countries in need. These and other actions have been labeled “unprecedented,” a term that has countries in need. These and other actions have been labeled “unprecedented,” a term that has
been used frequently to describe the pandemic and the policy responses. been used frequently to describe the pandemic and the policy responses.
Table 3. Elements of Announced Fiscal Measures to Address COVID-19

Advanced 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~~ 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 Targeted
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
~~transfersa~~transfersa
Other Other
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
labor labor
income income
~~supportb~~supportb
Wage Wage
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
subsidies subsidies
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 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
~~supportc~~supportc
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 Targeted

x x
x x
x x
x x

x x

x x
x x

x x
x x
transfers transfers
Source: Annual Economic Report 2020, Bank for International Settlements,, Bank for International Settlements, June 2020, p. 24, based on data June 2020, p. 24, based on data
~~collected~~col ected by the International Monetary Fund and the Organization for Economic Cooperation and by the International Monetary Fund and the Organization for Economic Cooperation and
Development. Development.
Notes:
87 Ibid. 88 Ibid., p. 25. Congressional Research Service 20 Global Economic Effects of COVID-19 a. Includes cash and in-kind transfers to affected households. a. Includes cash and in-kind transfers to affected households.
b. Extended unemployment and sickb. Extended unemployment and sick leave benefits. leave benefits.
c. Non-budgetary measuresc. Non-budgetary measures such as equity injections,such as equity injections, asset purchases, loans and debt assumptions or asset purchases, loans and debt assumptions or
government guarantees and contingent liabilities, government guarantees and contingent liabilities, US: United States; JP: Japan; DE: Germany; FR: France; IT: 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: Italy; ES: Spain; GB: Great Britain; BR: Brazil; CN: China; ID: Indonesia; IN: India; KR: South Korea; MX:
Mexico; RU: Russia; ZA:Mexico; RU: Russia; ZA: South Africa. ~~South Africa.~~

~~85 Ibid., p. 25.~~
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~~Global Economic Effects of COVID-19~~

Fiscal Deficits
As one measure of the global fiscal and monetary responses, the IMF estimated that government As one measure of the global fiscal and monetary responses, the IMF estimated that government
spending and revenue measures to sustain economic activity adopted through mid-March 2021 spending and revenue measures to sustain economic activity adopted through mid-March 2021
amounted to $16 amounted to $16 ~~trillion.86~~tril ion.89 The IMF also updated its estimate of the increase in borrowing by The IMF also updated its estimate of the increase in borrowing by
governments governments ~~globally~~global y to rise from 3.9% of global gross domestic product (GDP) in 2019 to to rise from 3.9% of global gross domestic product (GDP) in 2019 to
10.8% in 2020, as indicated in 10.8% in 2020, as indicated in Figure 3. Other estimates indicate that central banks have . Other estimates indicate that central banks have
committed $17 committed $17 ~~trillion~~tril ion to support their economies to counter pandemic to support their economies to counter pandemic -related economic effects.-related economic effects.87
90 Figure 3. IMF Projected Government Fiscal Deficits Relative to GDP
In percentage shares of Gross Domestic Product In percentage shares of Gross Domestic Product

Source: Fiscal Monitor, International Monetary Fund, April International Monetary Fund, April 2021. Created by CRS. 2021. Created by CRS.
Notes: Data for 2021 and 2022 are estimates. Data for 2021 and 2022 are estimates.
Among developed economies, the fiscal deficit to GDP ratio is projected to rise from 2.9% in Among developed economies, the fiscal deficit to GDP ratio is projected to rise from 2.9% in
2019 to 11.7% in 2020; the ratio for the United States is projected to rise from 5.7% to 15.8%, 2019 to 11.7% in 2020; the ratio for the United States is projected to rise from 5.7% to 15.8%,
respectively, the highest ratio for any country or region.respectively, the highest ratio for any country or region.8891 For most areas and countries, the IMF For most areas and countries, the IMF
forecasts that debt to GDP rations forecasts that debt to GDP rations ~~will fall~~ wil fal some in 2021, but fall more some in 2021, but fall more ~~substantially~~substantial y as percentage as percentage
shares of GDP in 2022 as the economic recovery is projected to take hold. Some economists and shares of GDP in 2022 as the economic recovery is projected to take hold. Some economists and
others have raised concerns that fiscal deficits financed through borrowing in a lowothers have raised concerns that fiscal deficits financed through borrowing in a low -interest rate -interest rate
environment could environment could ~~substantially~~substantial y increase the debt servicing costs on government budgets under increase the debt servicing costs on government budgets under
certain conditions, particularly if national economic growth rates rise, which tend to push up certain conditions, particularly if national economic growth rates rise, which tend to push up
~~central banks’ interest rates, and if the accumulated debt is refinanced at those higher rates,~~
~~thereby increasing debt servicing costs.89~~

86 89 Fiscal Monitor, International Monetary Fund, April 2021. p. 1. International Monetary Fund, April 2021. p. 1.
8790 Wigglesworth, Robin, Long Live Jay Powell, the New Wigglesworth, Robin, Long Live Jay Powell, the New Monarch of the Bond Market, 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.
8891 Fiscal Monitor, ~~Table 1.1.~~
~~89 Hagaman, Chase, Fiscal, Monetary, and Economic Challenges of the Post-Pandemic Economy, The Concord~~
~~Coalition, February 18, 2021, Edelberg, Wendy, and Louise Sheiner,~~ ~~The Macroeconomic Implications of Biden’s $1.9~~
~~Trillion Fiscal Package,~~ ~~The Hamilton Project, Brookings Institution, January 28, 2021.~~
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~~Global Economic Effects of COVID-19~~
T able 1.1. Congressional Research Service 21 Global Economic Effects of COVID-19 central banks’ interest rates, and if the accumulated debt is refinanced at those higher rates, thereby increasing debt servicing costs.92
According to the IMF, France, Germany, Italy, Japan, and the United Kingdom have each According to the IMF, France, Germany, Italy, Japan, and the United Kingdom have each
announced public sector support measures that total more than 10% of their annual GDP.announced public sector support measures that total more than 10% of their annual GDP.9093 For For
developing economies, the fiscal deficit to GDP ratio is projected to rise from 4.9% in 2019 to developing economies, the fiscal deficit to GDP ratio is projected to rise from 4.9% in 2019 to
9.8% in 2021, significantly increasing their debt burden and raising prospects of defaults or debt 9.8% in 2021, significantly increasing their debt burden and raising prospects of defaults or debt
rescheduling.rescheduling.9194 According to some estimates, the most According to some estimates, the most ~~fiscally~~fiscal y vulnerable countries are Argentina, vulnerable countries are Argentina,
Venezuela, Lebanon, Jordan, Iran, Zambia, Zimbabwe, and South Africa.Venezuela, Lebanon, Jordan, Iran, Zambia, Zimbabwe, and South Africa.9295 The IMF concluded The IMF concluded
that among low-income developing countries high debt levels could near-term debt vulnerabilities that among low-income developing countries high debt levels could near-term debt vulnerabilities
remain high.remain high.93
96 The IMF has argued there is a growing disconnect between the pricing of risk in financial markets The IMF has 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 based on and projected economic prospects, because investors apparently expect a quick recovery based on
continued and unprecedented central bank intervention. However, a perceived or real shift in 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 risk central bank intervention in financial markets could negatively affect investors’ concept of risk
and, in turn, negatively affect asset markets and the economic recovery.and, in turn, negatively affect asset markets and the economic recovery.9497 In addition to central In addition to central
banks’ actions, the IMF concludes that a number of preexisting vulnerabilities could affect the banks’ actions, the IMF concludes that a number of preexisting vulnerabilities could affect the
timing and the rate of the economic recovery. These vulnerabilities include corporate and timing and the rate of the economic recovery. These vulnerabilities include corporate and
household debt levels in developed and some emerging market economies that could become household debt levels in developed and some emerging market 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.9598
Worker Assistance Programs
As part of their fiscal policy measures, governments in advanced economies either enhanced As part of their fiscal policy measures, governments in advanced economies either enhanced
existing worker support programs, or adopted new programs. As indicated in existing worker support programs, or adopted new programs. As indicated in Table 34, the OECD , the OECD
categorized the various job retention programs into six major groups, which the OECD estimated categorized the various job retention programs into six major groups, which the OECD estimated
had supported 50 had supported 50 ~~million~~mil ion workers in developed economies. The programs consisted of short-term workers in developed economies. The programs consisted of short-term
support that subsidized hours not worked, or wage subsidies that also subsidized hours worked. support that subsidized hours not worked, or wage subsidies that also subsidized hours worked.
Some countries also eased qualification requirements to facilitate workers or businesses gaining Some countries also eased qualification requirements to facilitate workers or businesses gaining
access to support funds. access to support funds.
Programs to assist workers varied across countries, but they Programs to assist workers varied across countries, but they ~~generally~~general y comprised subsidies to comprised subsidies to
support workers for work hours lost or extended wage subsidies to maintain pre-pandemic support workers for work hours lost or extended wage subsidies to maintain pre-pandemic
employment levels. Other programs assisted individual firms in retaining workers with the employment levels. Other programs assisted individual firms in retaining workers with the
objective of facilitating a quick return to full activity once pandemic-related restrictions are objective of facilitating a quick return to full activity once pandemic-related restrictions are
~~lifted.96 In some cases, benefits were increased by extending the length of time benefits are~~
~~available and benefits were extended to workers in non-standard jobs such as temporary and self-~~

90 92 Hagaman, Chase, Fiscal, Monetary, and Economic Challenges of the Post-Pandemic Economy, T he Concord Coalition, February 18, 2021, Edelberg, Wendy, and Louise Sheiner, The Macroeconom ic Im plications of Biden’s $1.9 Trillion Fiscal Package, T he Hamilton Project, Brookings Institution, January 28, 2021. 93 Global Financial Stability Report Update. International Monetary Fund, April 2021, p. 3. . International Monetary Fund, April 2021, p. 3.
9194 Ibid, Ibid, p. 3 p. 3
9295 Wheatley, Jonathan, Wheatley, Jonathan, ~~Tommy~~T ommy Stubbington, Michael Stott, Andrew England, and Joseph Cotterill, Debt Relief: Stubbington, Michael Stott, Andrew England, and Joseph Cotterill, Debt Relief: Which Which
Countries Are Most Vulnerable?Countries Are Most Vulnerable? Financial ~~Times~~Tim es, 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.
9396 Global Financial Stability Report, April 2021,April 2021, p. 8 p. 8
9497 Global Financial Stability Report Update. International Monetary Fund, December 2020, p. 4. . International Monetary Fund, December 2020, p. 4.
9598 Ibid., pp. 6-7. Congressional Research Service 22 Global Economic Effects of COVID-19 lifted.99 In some cases, benefits were increased by extending the length of time benefits are available and benefits were extended to workers in non-standard jobs such as temporary and self- ~~Ibid., pp. 6-7.~~
~~96 Job Retention Schemes During the COVID-19 Lockdown and Beyond, Organization for Economic Cooperation and~~
~~Development, October 7, 2020, p. 2.~~
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~~Global Economic Effects of COVID-19~~

employed workers. New programs adopted by some OECD members were designed to assist employed workers. New programs adopted by some OECD members were designed to assist
some temporary and non-standard workers quickly gain access to support funds.some temporary and non-standard workers quickly gain access to support funds.97
100 Beyond the pandemic, the OECD encouraged governments to: Beyond the pandemic, the OECD encouraged governments to:
 Increase the contribution of firms to the cost of hours not worked to strengthen  Increase the contribution of firms to the cost of hours not worked to strengthen
incentives to use subsidies for jobs that incentives to use subsidies for jobs that ~~will~~ wil be viable after the pandemic crisis;be viable after the pandemic crisis;
 Set time limits on the extent of job support programs, although with the ability to  Set time limits on the extent of job support programs, although with the ability to
adjust the limits depending on circumstances; adjust the limits depending on circumstances;
 More closely align short-time work and unemployment benefits;  More closely align short-time work and unemployment benefits;
 Provide assistance for job searches and career guidance, and promote training. Provide assistance for job searches and career guidance, and promote training.98

101

Table 4. Developed Economy Worker Support Programs During COVID-19
Increased
access for
Preexisting
workers in
short-time
Increased
Increased
non-
New short-
New wage
work
access and
benefit
standard
time work
subsidy
scheme
coverage
generosity
jobs
scheme
scheme

Australia Australia
x x

Austria Austria
x x
x x
x x

Belgium Belgium
x x
x x
x x

Canada Canada
x x
x x

Chile Chile
x x
x x
x x
x x

Czech Republic Czech Republic
x x
x x
x x

Denmark Denmark
x x
x x
x x

Estonia Estonia
x x

Finland Finland
x x
x x
x x
x x

France France
x x
x x
x x
x x

Germany Germany
x x
x x
x x
x x

Greece Greece
x x

Hungary Hungary
x x

Iceland Iceland
x x

Ireland Ireland
x x
x x

Italy Italy
x x
x x
x x

Japan Japan
x x
x x
x x
x x

Korea Korea
x x
x x
x x

~~Latvia~~
x

~~97 Ibid, pp. 5-6.~~
~~98 Ibid,~~ 99 Job Retention Schemes During the COVID-19 Lockdown and Beyond, Organization for Economic Cooperation and Development, October 7, 2020, p. 2. 100 Ibid, pp. 5-6. 101 Ibid, pp. 2-3. pp. 2-3.
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Increased
access for
Preexisting
workers in
short-time
Increased
Increased
non-
New short-
New wage
work
access and
benefit
standard
time work
subsidy
scheme
coverage
generosity
jobs
scheme
scheme

Latvia x Lithuania Lithuania
x x

Luxembourg Luxembourg
x x
x x
x x

Netherlands Netherlands
x x
x x

New Zealand New Zealand
x x

Norway Norway
x x
x x
x x

Poland Poland
x x

Portugal Portugal
x x
x x
x x

Slovak Republic Slovak Republic
x x
x x
x x

Slovenia Slovenia
x x

Spain Spain
x x
x x
x x
x x

Sweden Sweden
x x
x x
x x

Switzerland Switzerland
x x
x x
x x

Turkey Turkey
x x
x x
x x

United Kingdom United Kingdom

x x

United States United States
x x
x x
x x

Source: Job Retention Schemes During the COVID-19 Lockdown and Beyond, Organization for Economic , Organization for Economic
Cooperation and Development,Cooperation and Development, October 12, 2020, p. 7. October 12, 2020, p. 7.
Monetary and Prudential Measures
Among central banks, the Federal Reserve initiatedAmong central banks, the Federal Reserve initiated extraordinary steps not experienced since the extraordinary steps not experienced since the
2008-2009 global financial crisis to address the economic effects of COVID-19. Simultaneously, 2008-2009 global financial crisis to address the economic effects of COVID-19. Simultaneously,
as indicated in as indicated in Table 45, various central banks and monetary authorities adopted an array of , various central banks and monetary authorities adopted an array of
measures to address the potential economic effects of the pandemic, including lowering interest measures to address the potential economic effects of the pandemic, including lowering interest
rates and reserve requirements, announcing new lending and financing facilities, asset purchases, rates and reserve requirements, announcing new lending and financing facilities, asset purchases,
foreign exchange swaps, prudential measures, and relaxed capital buffers and, in some cases, foreign exchange swaps, prudential measures, and relaxed capital buffers and, in some cases,
countercyclical capital buffers,countercyclical capital buffers,99102 adopted after the 2008-2009 financial crisis, adopted after the 2008-2009 financial crisis, ~~potentially~~potential y freeing freeing
up an estimated $5 up an estimated $5 ~~trillion~~ tril ion in funds.in funds.~~100~~
103 Central banks not only Central banks not only ~~filled~~ fil ed the role of lender of last resort through large purchases of 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.cases engaging in activities that previously had been considered off-limits.~~101~~104 As a result of these 102 ~~As a result of these~~
~~activities, the BIS argued that central banks effectively managed the initial liquidity crisis, the~~

99 Countercyclical capital buffers require Countercyclical capital buffers require banks to increase their capital buffers duringbanks to increase their capital buffers during periods of rapid growth in assets periods of rapid growth in assets
(when they are making a lot of loans), to ensure they have sufficient capital to absorb losses(when they are making a lot of loans), to ensure they have sufficient capital to absorb losses ~~during~~ during a recession. 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/.
~~100~~103 Arnold, Martin, “Regulators Free up $500bn Capital for Lenders to Fight Virus Arnold, Martin, “Regulators Free up $500bn Capital for Lenders to Fight Virus Storm,” 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.
~~101~~104 For a review of monetary policies of the Federal Reserve, the ECB, the Bank of Japan, and the Bank of England, For a review of monetary policies of the Federal Reserve, the ECB, the Bank of Japan, and the Bank of England,
~~see: Haas, Jacob, Christopher J. Neely, William B. Emmons, Responses of International Central Banks to the COVID-~~
~~19 Crisis, Federal Reserve Bank of St. Louis Review, Fourth Quarter 2020.~~
Congressional Research Service Congressional Research Service

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link to page 31 link to page 31 link to page 31 link to page 31 ~~link to page 31~~ Global Economic Effects of COVID-19

activities, the BIS argued 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 being navigated in some cases and could become more and recovery, are being navigated in some cases and could become more ~~challenging~~chal enging should the should the
pandemic-related economic crisis be prolonged. Capital buffers were raised after the financial pandemic-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. Some crisis to assist banks in absorbing losses and staying solvent during financial crises. Some
governments have directed banks to freeze dividend payments and halt pay bonuses. The governments have directed banks to freeze dividend payments and halt pay bonuses. The
Financial Stability Board (FSB) argued in its July 15, 2020, report to the G-20 Finance Ministers Financial Stability Board (FSB) argued in its July 15, 2020, report to the G-20 Finance Ministers
and Governors that the actions taken to date to support the functioning of the global financial and Governors that the actions taken to date to support the functioning of the global financial
system appeared to have effectively worked to contain the financial and economic impact of the system appeared to have effectively worked to contain the financial and economic impact of the
pandemic so far, although the crisis is not over.pandemic so far, although the crisis is not over.~~102~~105
Table 5. Selected Central Bank and Prudential Measures to Address COVID-19

Advanced economies
Emerging market economies
Type of Type of
Measures Measures
U U
E E
J J
G G
C C
A A
C C
B B
C C
I I
I I
K K
M M
T T
Z Z
tool tool
S S
A A
P P
B B
A A
U U
H H
R R
N N
D D
N N
R R
X X
H H
A A
Interest Interest
Policy rate Policy rate
x x

x x
x x
x x

x x
x x
x x
x x
x x
x x
x x
x x
rate rate
cut cut
Lending Lending
Gen. Gen.
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
liquidity liquidity
~~provisiona~~provisiona
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
Governme Governme
x x
x x
x x
x x
x x
x x

x x
x x
x x

x x
x x
purchase purchase
nt bonds nt bonds
s/ sales s/ sales
Commercia Commercia
x x
x x
x x
x x
x x

x x

l paper l paper
Corporate Corporate
x x
x x
x x
x x
x x

x x

x x

bonds bonds
Other Other

x x
x x

x x

private private
~~securitiesb~~securitiesb
FX swap/ FX swap/
USD swap USD swap

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

x x
x x

interven- interven-
line line
tion tion
FX FX

x x
x x

x x
x x
x x
x x

interven- interven-
tion tion
Pruden- Pruden-
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
tial rules tial rules
require- require-
and and
ments ments
Regula- Regula-
tions tions
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
require- require-
ments ments
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~~

x
x
x
x
x
x
x
x
x
x
x
x
x
x
~~functioningc~~

~~102~~ see: Haas, Jacob, Christopher J. Neely, William B. Emmons, Responses of International Central Banks to the COVID -19 Crisis, Federal Reserve Bank of St. Louis Review, Fourth Quarter 2020. 105 COVID-19 Pandemic: Financial Stability Implications and Policy Measures Taken: Report Submitted to the G-20
Finance Ministers and Governors, Financial Stability Board, July, Financial Stability Board, July 15, 2020. 15, 2020.
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link to page 31 Global Economic Effects of COVID-19 Advanced economies Emerging market economies Type of Measures U E J G C A C B C I I K M T Z tool S A P B A U H R N D N R X H A Market x x x x x x x x x x x x x x functioningc ~~Global Economic Effects of COVID-19~~

Source: Annual Economic Report 2020, Bank for International Settlements,, Bank for International Settlements, June 2020, p. 23. June 2020, p. 23.
Notes: :
a. Repo and reversea. Repo and reverse repo operations, standing facilities,repo operations, standing facilities, modified discount window and lowermodified discount window and lower reserve reserve
requirement requirement ratio. ratio.
b. Asset- and mortgage-backed securities, b. Asset- and mortgage-backed securities, covered bonds and exchange-traded funds. covered bonds and exchange-traded funds.
c. c. ~~Shortselling~~ Shortsel ing bans and circuit breakers.bans and circuit breakers. US: United States; EA: Euro Area; JP: Japan; GB: Great Britain; CA: 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; Canada; AU: Australia; CH: Switzerland; BR: Brazil; CN: China; ID: Indonesia; IN: India; KR: South Korea;
MX: Mexico; TH: Thailand; ZA: South Africa. MX: Mexico; TH: Thailand; ZA: South Africa.
Economic Forecasts
Global Growth
Although prospects have brightened for renewed rates of growth, the economic situation remains Although prospects have brightened for renewed rates of growth, the economic situation remains
highly fluid highly fluid ~~globally~~global y and for most countries and regions. Uncertainty about the length and depth and for most countries and regions. Uncertainty about the length and depth
of the health crisis-related economic effects continue to drive perceptions of risk and volatility in of the health crisis-related economic effects continue to drive perceptions of risk and volatility in
financial markets and corporate decision-making. In addition, uncertainties concerning the global financial markets and corporate decision-making. In addition, uncertainties concerning the global
pandemic and the effectiveness of public policies intended to contain its spread and prevent a pandemic and the effectiveness of public policies intended to contain its spread and prevent a
subsequent rounds of infections have added to market volatility. At various times, corporations subsequent rounds of infections have added to market volatility. At various times, corporations
postponed investment decisions, laid off workers who previously had been furloughed, and in postponed investment decisions, laid off workers who previously had been furloughed, and in
some cases filed for bankruptcy. some cases filed for bankruptcy.
In the early months of the economic recession, the economic situation was compounded by a In the early months of the economic recession, the economic situation was compounded by a
historic drop in the price of crude oil. Since then, oil prices have recovered from the low of nearly historic drop in the price of crude oil. Since then, oil prices have recovered from the low of nearly
$20 per barrel in April 2020. Through the end of 2020, oil prices moved in the range of $40 to $20 per barrel in April 2020. Through the end of 2020, oil prices moved in the range of $40 to
$45 per barrel, in part reflecting the decline in$45 per barrel, in part reflecting the decline in global economic activity. By early January 2021, global economic activity. By early January 2021,
the international price of Brent crude oil crossed the $65 per barrel threshold not reached since the international price of Brent crude oil crossed the $65 per barrel threshold not reached since
the economic crisis began.the economic crisis began.
On April On April 29, 2020, Federal Reserve Chairman Jerome 29, 2020, Federal Reserve Chairman Jerome ~~Powell~~ Powel stated that the Federal Reserve stated that the Federal Reserve
would use its “full range of tools” to support economic activity as the U.S. economic growth rate would use its “full range of tools” to support economic activity as the U.S. economic growth rate
dropped by 33.0% at an annual rate in the second quarter of 2020. In assessing the state of the dropped by 33.0% at an annual rate in the second quarter of 2020. In assessing the state of the
U.S. economy, the Federal Open Market Committee released a statement indicating that, “The U.S. economy, the Federal Open Market Committee released a statement indicating that, “The
ongoing public health crisis ongoing public health crisis ~~will~~ wil weigh heavily on economic activity, employment, and inflation weigh heavily on economic activity, employment, and inflation
in the near term, and poses considerable risks to the economic outlook over the medium term.”in the near term, and poses considerable risks to the economic outlook over the medium term.”~~103~~106
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 a number of issues, including the lingering impact of growing trade recovery as a result of a number of issues, including the lingering impact of growing trade
protectionism; trade disputes among major trading partners; protectionism; trade disputes among major trading partners; ~~falling~~fal ing commodity and energy prices; commodity and energy prices;
and economic uncertainties in Europe over the impact of the UKand economic uncertainties in Europe over the impact of the UK withdrawal from the European withdrawal from the European
Union. Union. ~~Individually~~Individual y, each of these issues presented a solvable , each of these issues presented a solvable ~~challenge~~chal enge for the global economy. for the global economy.
Collectively, however, the issues weakened the global economy and reduced the available policy Collectively, however, the issues weakened the global economy and reduced the available policy
~~flexibility of many national leaders, especially~~ 106 Federal Reserve Issues FOMC Statement, Board of Governors of the Federal Reserve System, April 29, 2020. https://www.federalreserve.gov/newsevents/pressreleases/monetary20200429a.htm. Congressional Research Service 26 Global Economic Effects of COVID-19 flexibility of many national leaders, especial y among the leading developed economies. While among the leading developed economies. While
the level of economic effects has become clearer, the response to the pandemic the level of economic effects has become clearer, the response to the pandemic ~~potentially~~potential y has has
had a significant and enduring impact on the way businesses organize their work forces, on global had a significant and enduring impact on the way businesses organize their work forces, on global
supply chains, and how governments respond to a global health crisis.supply chains, and how governments respond to a global health crisis.~~104~~107 As a result of the rapidly ~~As a result of the rapidly~~

~~103 Federal Reserve Issues FOMC Statement, Board of Governors of the Federal Reserve System, April 29, 2020.~~
~~https://www.federalreserve.gov/newsevents/pressreleases/monetary20200429a.htm.~~
~~104 Rowland, Christopher and Peter Whoriskey, “U.S. Health System is Showing Why It’s Not Ready for a COVID-19~~
~~Pandemic,” Washington Post, March 4, 2020. https://www.washingtonpost.com/business/economy/the-us-health-~~
~~Congressional Research Service~~

26

~~Global Economic Effects of COVID-19~~

spreading virus and its compounding effects on global and national rates of economic growth, spreading virus and its compounding effects on global and national rates of economic growth,
forecasting the impact of the virus has been forecasting the impact of the virus has been ~~especially challenging~~especial y chal enging. .
The International Monetary Fund (IMF), the Organization for Economic Cooperation and The International Monetary Fund (IMF), the Organization for Economic Cooperation and
Development (OECD), and The World Bank Development (OECD), and The World Bank ~~all~~ al revised their forecasts downward between late revised their forecasts downward between late
2019 and mid-2020, reflecting the rapidly deteriorating state of the global economy and a marked 2019 and mid-2020, reflecting the rapidly deteriorating state of the global economy and a marked
decline in projected rates of growth. Between October 2019 and January 2021, for instance, the decline in projected rates of growth. Between October 2019 and January 2021, for instance, the
IMF lowered its global economic growth forecast for 2020 from a positive 3.4% to a negative IMF lowered its global economic growth forecast for 2020 from a positive 3.4% to a negative
3.5%. In its June 2020 forecast, the OECD forecasted the effects of a single and double wave of 3.5%. In its June 2020 forecast, the OECD forecasted the effects of a single and double wave of
infections, with the projections for a single wave reflected in infections, with the projections for a single wave reflected in Table 56. By late 2020 and early . By late 2020 and early
2021, most forecasts were revised upward to reflect assessments the recession would be less 2021, most forecasts were revised upward to reflect assessments the recession would be less
severe than had been forecasted for 2021, as indicated in severe than had been forecasted for 2021, as indicated in Figure 4. The OECD projected in The OECD projected in
March 2021 that global GDP could decline by 3.4% in 2020, compared with an earlier forecast of March 2021 that global GDP could decline by 3.4% in 2020, compared with an earlier forecast of
-4.2%, and would experience a stronger recovery in 2021 of 5.6% instead of an earlier forecast of -4.2%, and would experience a stronger recovery in 2021 of 5.6% instead of an earlier forecast of
4.2%.4.2%.~~105~~108 Between January 2020 and January 2021, the World Bank also lowered its forecast of Between January 2020 and January 2021, the World Bank also lowered its forecast of
global growth from 2.5% to a negative 4.3%. In most forecasts, advanced economies were global growth from 2.5% to a negative 4.3%. In most forecasts, advanced economies were
projected to experience the steepest declines in economic growth from 2019 to mid-June 2020. projected to experience the steepest declines in economic growth from 2019 to mid-June 2020.
Table 6. Major Economic Forecasts
Percentage changes at annual rates Percentage changes at annual rates
World
Advanced economies Developing economies
United States

2020 2021 2020 2021
2020 2020
2021 2021
2020 2020
2021 2021
2020 2020
2021 2021
International Monetary Fund
October 2019 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%
2.1% 2.1%
1.7% 1.7%
April April 2020 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
June 2020 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
October 2020 October 2020
–4.4 –4.4
5.2 5.2
–5.8 –5.8
3.9 3.9
–3.3 –3.3
6.0 6.0
–4.3 –4.3
3.1 3.1
January 2021 January 2021
-3.5 -3.5
5.5 5.5
-4.9 -4.9
4.3 4.3
-2.4 -2.4
6.3 6.3
-3.4 -3.4
5.1 5.1
Organization for Economic Cooperation and Development
Nov 2019 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
March 2020 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
June 2020 single 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
June 2020 double 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
Sept. 2020 Sept. 2020
-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
~~Dec. 2020~~
~~-4.2~~
~~4.2~~
~~-5.5~~
~~3,2~~
~~-3.0~~
~~5.1~~
~~-3.7~~
~~3.2~~
~~March 2021~~
~~-3.4~~
~~5.6~~
NA
NA
NA
NA
~~-3.5~~
~~6.5~~
~~World Bank~~
~~January 2020~~
~~2.5~~
~~2.6~~
~~1.4~~
~~1.5~~
~~4.1~~
~~4.3~~
~~1.8~~
~~1.7~~

107 Rowland, Christopher and Peter Whoriskey, “U.S. Health System is Showing Why It’s Not Ready for a COVID-19 Pandemic,” Washington Post, March 4, 2020. https://www.washingtonpost.com/business/economy/the-us-health-system-is-showing-why-its-not-ready-for-a-COVID-19-pandemic/2020/03/04/7c307bb4-5d61-11ea-b29b-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.
~~105~~108 OECD Economic Outlook, Interim Report March 2021 , Organization for Economic Cooperation and Development, , Organization for Economic Cooperation and Development,
March, 2021. March, 2021.
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Global Economic Effects of COVID-19

World
Advanced economies Developing economies
United States

2020 2021 2020 2021
2020 2020
2021 2021
2020 2020
2021 2021
2020 2020
2021 2021
Dec. 2020 -4.2 4.2 -5.5 3,2 -3.0 5.1 -3.7 3.2 March 2021 -3.4 5.6 NA NA NA NA -3.5 6.5 World Bank January 2020 2.5 2.6 1.4 1.5 4.1 4.3 1.8 1.7 June 2020 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
January 2021 January 2021
-4.3 -4.3
4.0 4.0
-5.4 -5.4
3.3 3.3
-2.6 -2.6
5.0 5.0
-3.6 -3.6
3.5 3.5
Source: World Economic Outlook,, various issues,various issues, International Monetary Fund; International Monetary Fund; OECD Economic Outlook, various various
issues,issues, Organization for Economic Cooperation and Development;Organization for Economic Cooperation and Development; Global Economic Prospects,, various issues, various issues,
WorldWorld Bank. Bank.
Figure 4. Major Economic Forecasts by Region

Source: OECD Economic Outlook, March 2021, Organization for Economic Cooperation and Development. , Organization for Economic Cooperation and Development.
March 2021; March 2021; World Economic Outlook, Update, International Monetary Fund, January 26, 2021; International Monetary Fund, January 26, 2021; Global Economic
Prospects,, ~~World~~ World Bank Group, January 2021, Created by CRS. Bank Group, January 2021, Created by CRS.
Notes: The OECD estimated The OECD estimated rates of growth as a result of two scenarios,rates of growth as a result of two scenarios, indicated as OECD1 and OECD2. indicated as OECD1 and OECD2.
The first scenario assumesThe first scenario assumes there is a singlethere is a single wave of infections from COVID-19, while the second scenario wave of infections from COVID-19, while the second scenario
estimatesestimates the effect of a two-wave scenario. the effect of a two-wave scenario.
The OECD Forecast
The Organization for Economic Cooperation and Development (OECD) released an updated The Organization for Economic Cooperation and Development (OECD) released an updated
forecast in April 2021 that projects global economic growth would decline by 3.4% in 2020, forecast in April 2021 that projects global economic growth would decline by 3.4% in 2020,
compared with a June 2020 forecast of a 6.9% decline under a single-wave scenario in 2020 and a compared with a June 2020 forecast of a 6.9% decline under a single-wave scenario in 2020 and a
Congressional Research Service 28 Global Economic Effects of COVID-19 7.6% decline under a second wave scenario.7.6% decline under a second wave scenario.~~106~~109 In the updated forecast, developed economies In the updated forecast, developed economies
were projected to experience a decline in GDP of 3.2% in 2020, compared with a projected rate of were projected to experience a decline in GDP of 3.2% in 2020, compared with a projected rate of
positive growth of 6.2% in 2021. The forecast reflects the OECD’s continued high level of positive growth of 6.2% in 2021. The forecast reflects the OECD’s continued high level of
uncertainty about the course of the global economy over the remainder of 2020, because the uncertainty about the course of the global economy over the remainder of 2020, because the

~~106 OECD Economic Outlook, Interim Report: Coronavirus (COVID-19): Living With Uncertainty, Organization for~~
~~Economic Cooperation and Development, September 2020.~~
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28

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pandemic is “a global public health crisis without precedent in living memory.” The OECD also pandemic is “a global public health crisis without precedent in living memory.” The OECD also
concluded that an economic recovery would take place over the next two years, but “the recovery concluded that an economic recovery would take place over the next two years, but “the recovery
would be uneven across countries, would be uneven across countries, ~~potentially~~potential y leading to lasting changes in the world leading to lasting changes in the world
economy.”economy.”~~107~~110 In addition, the OECD argued that the pandemic is fragmenting the global economy In addition, the OECD argued that the pandemic is fragmenting the global economy
through a growing number of trade and investment restrictions and diverging policy approaches through a growing number of trade and investment restrictions and diverging policy approaches
that are being implemented on a country-by-country basis. that are being implemented on a country-by-country basis.
As a consequence of the slowdown in economic activity in the fourth quarter of 2020 and As a consequence of the slowdown in economic activity in the fourth quarter of 2020 and
projected slow, but partial recovery in 2021, the OECD estimated there would be long-lasting projected slow, but partial recovery in 2021, the OECD estimated there would be long-lasting
effects on the global economy, including effects on the global economy, including
 Output is projected to remain around 5% below pre-crisis expectations in many  Output is projected to remain around 5% below pre-crisis expectations in many
countries in 2022, raising the specter of substantial permanent costs, countries in 2022, raising the specter of substantial permanent costs,
disproportionately affecting vulnerable populations. disproportionately affecting vulnerable populations.
  ~~Smaller~~Smal er firms and entrepreneurs are more likely to go out of business. firms and entrepreneurs are more likely to go out of business.
 Many low wage earners have lost their jobs and are only covered by  Many low wage earners have lost their jobs and are only covered by
unemployment insurance, at best, with poor prospects of finding new jobs soon. unemployment insurance, at best, with poor prospects of finding new jobs soon.
 People living in poverty and  People living in poverty and ~~usually less well~~ usual y less wel covered by social safety nets covered by social safety nets
experienced a deterioration in their living standards. experienced a deterioration in their living standards.
 Children and youth from less  Children and youth from less ~~well~~wel -off backgrounds, and less qualified adult -off backgrounds, and less qualified adult
workers have struggled to learn and work from home, with workers have struggled to learn and work from home, with ~~potentially~~potential y long long
lasting damage.lasting damage.~~108~~111
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 estimates in its June 2020 outlook that it determined were 2020, the OECD produced two estimates in its June 2020 outlook that it determined were
““~~equally~~equal y likely likely scenarios:” one that assumed containment measures that existed at the time would scenarios:” one that assumed containment measures that existed at the time would
be successful in curtailing infections, and another that assumed there would be a second wave of be successful in curtailing infections, and another that assumed there would be a second wave of
rapid contagion.rapid contagion.~~109~~112 Under both scenarios, the OECD estimated the global economic recovery Under both scenarios, the OECD estimated the global economic recovery
would be slow and gradual.would be slow and gradual.~~110~~113 The OECD also estimated that the average unemployment rate The OECD also estimated that the average unemployment rate
among OECD countries could rise to 9.2% under a single wave scenario and 10.0% under the among OECD countries could rise to 9.2% under a single wave scenario and 10.0% under the
second wave scenario. Through the third and fourth quarters of 2020, however, most OECD second wave scenario. Through the third and fourth quarters of 2020, however, most OECD
countries had not experienced extended periods of high rates of unemployment, in part due to countries had not experienced extended periods of high rates of unemployment, in part due to
nationalnational income and wage maintenance programs, as indicated in income and wage maintenance programs, as indicated in Figure 5. The main exceptions . The main exceptions
were the United States and Canada, where unemployment rates spiked starting at the end of the 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. By first quarter and into the second quarter of 2020. By ~~January~~February 2021, most OECD economies had 2021, most OECD economies had
unemployment rates in the 7.0% to 9.0% range with some exceptions: Japan (2.9%) and Germany unemployment rates in the 7.0% to 9.0% range with some exceptions: Japan (2.9%) and Germany
(4.(4.65%) had rates below the OECD average of 6.%) had rates below the OECD average of 6.87%, while Colombia (14.3%), Spain (16.%, while Colombia (14.3%), Spain (16.01%), and %), and
Italy (Italy (~~9.0~~10.2%) had rates that were higher than the OECD average. In a major difference between %) had rates that were higher than the OECD average. In a major difference between
~~U.S. and EU data, EU workers absent from work due to temporary layoff are counted as~~
~~employed, whereas, in the United States, they are counted as unemployed.~~

~~107~~ 109 OECD Economic Outlook, Interim Report: Coronavirus (COVID-19): Living With Uncertainty, Organization for Economic Cooperation and Development, September 2020. 110 OECD Economic Outlook, Interim Report March 2021, Organization for Economic Cooperation and Development. , Organization for Economic Cooperation and Development.
March 2021, p. 4. http://www.oecd.org/economic-outlook/#resources. March 2021, p. 4. http://www.oecd.org/economic-outlook/#resources.
~~108~~111 Ibid, Ibid, p. 8. p. 8.
~~109~~112 Ibid, Ibid, p. 13. p. 13.
~~110~~113 OECD Economic Outlook, June 2020, Organization for Economic Cooperation and Development. June 2020, p. 23. , Organization for Economic Cooperation and Development. June 2020, p. 23.
http://www.oecd.org/economic-outlook/#resources. http://www.oecd.org/economic-outlook/#resources.
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U.S. and EU data, EU workers absent from work due to temporary layoff are counted as employed, whereas, in the United States, they are counted as unemployed. Figure 5. Unemployment Rates Among Major OECD Countries
In percentage terms In percentage terms

Source: OECD Dataset: Short-termOECD Dataset: Short-term Labor Market Statistics, Organization for Economic Cooperation and Labor Market Statistics, Organization for Economic Cooperation and
Development.Development. Created by CRS. Created by CRS.
Global trade was projected to contract by 9.5% or 11.4% in 2020 under the single or second wave Global trade was projected to contract by 9.5% or 11.4% in 2020 under the single or second wave
scenarios, respectively. The OECD projections in scenarios, respectively. The OECD projections in Table 7 reflect the single wave scenario. reflect the single wave scenario.~~111~~114
According to this scenario, global economic growth was projected to According to this scenario, global economic growth was projected to ~~fall~~ fal by 6.0% in 2020, but by 6.0% in 2020, but
rise by 5.2% in 2021. In contrast, the OECD’s second wave scenario projected a global economic rise by 5.2% in 2021. In contrast, the OECD’s second wave scenario projected 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. until 2022.
The OECD March 2021 forecast projects that economic growth among developed economies The OECD March 2021 forecast projects that economic growth among developed economies
would be particularly weak in Europe, where the growth rate was projected to would be particularly weak in Europe, where the growth rate was projected to ~~fall~~ fal by 3.4% in by 3.4% in
2020, compared with the March 2020 forecast of an increase of 0.8% in 2020 and by 1.2% in 2020, compared with the March 2020 forecast of an increase of 0.8% in 2020 and by 1.2% in
2021. Similarly,2021. Similarly, U.S. economic growth was projected to contract in 2020 by 3.5%, but rebound U.S. economic growth was projected to contract in 2020 by 3.5%, but rebound
by 6.5% in 2021. The UK is projected to experience a contraction in GDP growth in 2020 of by 6.5% in 2021. The UK is projected to experience a contraction in GDP growth in 2020 of
9.9%, slightly less than the earlier forecast of a decline of 10.1%. World trade was also projected 9.9%, slightly less than the earlier forecast of a decline of 10.1%. World trade was also projected
to decline by 10.3% in 2020, before rising by 3.9% in 2021 and 4.4% in 2022. to decline by 10.3% in 2020, before rising by 3.9% in 2021 and 4.4% in 2022.

~~111~~ 114 Ibid., p. 13. Ibid., p. 13.
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Table 7. OECD, IMF and World Bank Economic Forecasts
Percentage change in Real GDP Growth Percentage change in Real GDP Growth
OECD Mar. 2021
IMF Apr. 2021
World Bank Jan.

Projections

Projections

2021 Projections
2020 2020
2021 2021
2022 2022
2020 2020
2021 2021
2022 2022

2019 2019
2020 2020
2021 2021

World World
-3.4% -3.4%
5.6% 5.6%
4.0% 4.0%
World World
–3.5 –3.5
5.5 5.5
4.2 4.2
World World
2.3 2.3
-4.3 -4.3
4.0 4.0
Adv. Economies Adv. Economies
-3.2 -3.2
6.2 6.2
4.1 4.1
Adv. Economies Adv. Economies
–4.9 –4.9
4.3 4.3
3.1 3.1
Adv. Economies Adv. Economies
1.6 1.6
-5.4 -5.4
3.3 3.3
Australia Australia
-2.5 -2.5
4.5 4.5
3.1 3.1
United States United States
–3.4 –3.4
5.1 5.1
2.5 2.5
United States United States
2.2 2.2
-3.6 -3.6
3.5 3.5
Canada Canada
-5.4 -5.4
4.7 4.7
4.0 4.0
Euro Area Euro Area
–7.2 –7.2
4.2 4.2
3.6 3.6
Euro Area Euro Area
1.3 1.3
-7.4 -7.4
3.6 3.6
Euro area Euro area
-6.8 -6.8
3.9 3.9
3.8 3.8
Germany Germany
–5.4 –5.4
3.5 3.5
3.1 3.1
Japan Japan
0.3 0.3
-5.3 -5.3
2.5 2.5
Germany Germany
-5.3 -5.3
3.0 3.0
3.7 3.7
France France
–9.0 –9.0
5.5 5.5
4.1 4.1
Emerging Emerging
3.6 3.6
-2.6 -2.6
5.0 5.0
France France
-8.2 -8.2
5.9 5.9
3.8 3.8
Italy Italy
–9.2 –9.2
3.0 3.0
3.6 3.6
E. Asia E. Asia
5.8 5.8
0.9 0.9
7.4 7.4
Italy Italy
-8.9 -8.9
4.1 4.1
4.0 4.0
Spain Spain
–11.1 –11.1
5.9 5.9
4.7 4.7
China China
6.1 6.1
2.0 2.0
7.9 7.9
Spain Spain
-11 -11
5.7 5.7
4.8 4.8
Japan Japan
–5.1 –5.1
3.1 3.1
2.4 2.4
Indonesia Indonesia
5.0 5.0
-2.2 -2.2
4.4 4.4
Japan Japan
-4.8 -4.8
2.7 2.7
1.8 1.8
United Kingdom United Kingdom
–10.0 –10.0
4.5 4.5
5.0 5.0
Thailand Thailand
2.4 2.4
-6.5 -6.5
4.0 4.0
Korea Korea
-1.0 -1.0
3.3 3.3
3.1 3.1
Canada Canada
–5.5 –5.5
3.6 3.6
4.1 4.1
Cen. Asia Cen. Asia
2.3 2.3
-2.9 -2.9
3.3 3.3
Mexico Mexico
-8.5 -8.5
4.5 4.5
3.0 3.0
China China
2.3 2.3
8.1 8.1
5.6 5.6
Russia Russia
1.3 1.3
-4.0 -4.0
2.6 2.6
Turkey Turkey
1.8 1.8
5.9 5.9
3.0 3.0
India India
–8.0 –8.0
11.5 11.5
6.8 6.8
Turkey Turkey
0.9 0.9
0.5 0.5
4.5 4.5
United United
-9.9 -9.9
5.1 5.1
4.7 4.7
–3.6 –3.6
3.0 3.0
3.9 3.9
4.5 4.5
-3.4 -3.4
3.5 3.5
Kingdom Kingdom
Russia Russia
Poland Poland
United States United States
-3.5 -3.5
6.5 6.5
4.0 4.0
Latin America Latin America
–7.4 –7.4
4.1 4.1
2.9 2.9
Brazil Brazil
1.4 1.4
-4.5 -4.5
3.0 3.0
Argentina Argentina
-10.5 -10.5
4.6 4.6
2.1 2.1
Brazil Brazil
–4.5 –4.5
3.6 3.6
2.6 2.6
Mexico Mexico
-0.1 -0.1
-9.0 -9.0
3.7 3.7
Brazil Brazil
-4.4 -4.4
3.7 3.7
2.7 2.7
Mexico Mexico
–8.5 –8.5
4.3 4.3
2.5 2.5
Argentina Argentina
-2.1 -2.1
-10.6 -10.6
4.9 4.9
China China
2.3 2.3
7.8 7.8
4.9 4.9
Mid. East Mid. East
–3.2 –3.2
3.0 3.0
4.2 4.2
Mid. East Mid. East
0.1 0.1
-5.0 -5.0
2.1 2.1
India India
-7.4 -7.4
12.6 12.6
5.4 5.4
Saudi Arabia Saudi Arabia
–3.9 –3.9
2.6 2.6
4.0 4.0
Saudi Arabia Saudi Arabia
0.3 0.3
-5.4 -5.4
2.0 2.0
Indonesia Indonesia
-2.1 -2.1
4.9 4.9
5.4 5.4
Africa Africa
–2.6 –2.6
3.2 3.2
3.9 3.9
Iran Iran
-6.8 -6.8
-3.7 -3.7
1.5 1.5
CRS-31 CRS-31

OECD Mar. 2021
IMF Apr. 2021
World Bank Jan.

Projections

Projections

2021 Projections
2020 2020
2021 2021
2022 2022
2020 2020
2021 2021
2022 2022

2019 2019
2020 2020
2021 2021

S. Africa S. Africa
0.2 0.2
-8.1 -8.1
3.1 3.1
Nigeria Nigeria
–3.2 –3.2
1.5 1.5
2.5 2.5
Egypt Egypt
5.6 5.6
3.6 3.6
2.7 2.7

S. Africa S. Africa
–7.5 –7.5
2.8 2.8
1.4 1.4
S. Asia S. Asia
4.4 4.4
-6.7 -6.7
3.3 3.3

World World Trade Trade
–9.6 –9.6
8.1 8.1
6.3 6.3
Volume Volume
India India
4.2 4.2
-9.6 -9.6
5.4 5.4

Oil prices Oil prices ($) ($)
–32.7 –32.7
21.2 21.2
–2.4 –2.4
Pakistan Pakistan
1.9 1.9
-1.5 -1.5
0.5 0.5

Bangladesh Bangladesh
8.2 8.2
2.0 2.0
1.6 1.6

Africa Africa
2.4 2.4
-3.7 -3.7
2.7 2.7

Nigeria Nigeria
2.2 2.2
-4.1 -4.1
1.1 1.1

S. Africa S. Africa
0.2 0.2
-7.8 -7.8
3.3 3.3

Angola Angola
-0.9 -0.9
-4.0 -4.0
0.9 0.9
Sources: OECD Economic Outlook, Interim Report March 2021, Organization for Economic Cooperation and Development., Organization for Economic Cooperation and Development. ~~December~~ December 2020; 2020; World Economic Outlook,
International Monetary Fund, April,International Monetary Fund, April, 2021; 2021; Global Economic Prospects,, ~~World~~ World Bank Group, January 2021, Bank Group, January 2021,
Note: The OECD forecast includes a single-wave scenario and a double-wave scenario The OECD forecast includes a single-wave scenario and a double-wave scenario in which the pandemic remainsin which the pandemic remains under control and recedesunder control and recedes and another in which and another in which
there is a second wave of the pandemic, The OECD forecast numbers is this table reflectthere is a second wave of the pandemic, The OECD forecast numbers is this table reflect the single-wave scenario. the single-wave scenario.

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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 was projected to decline by 8% and 9.5%,  Real per capita income in 2020 was 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 declines in ~~all~~ al economies. Even with an economic recovery in 2021, real per economies. Even with an economic recovery in 2021, real per
capita income was projected to rise to only that of 2013. capita income was projected to rise to only that of 2013.
 Unemployment was projected to rise to its highest level in more than 25 years,  Unemployment was projected to rise to its highest level in more than 25 years,
while the average unemployment rate was projected to rise to 7.4% in 2021and while the average unemployment rate was projected to rise to 7.4% in 2021and
6.9% in 2022. The OECD concludes that, “scarring effects from job losses are 6.9% in 2022. The OECD concludes that, “scarring effects from job losses are
likelylikely to be felt particularly by younger workers and lower-to be felt particularly by younger workers and lower-~~skilled~~skil ed workers, with workers, with
attendant risks of many people becoming trapped in joblessness for an extended attendant risks of many people becoming trapped in joblessness for an extended
period.” period.”
 Net productive investment (business and government) was weak prior to the  Net productive investment (business and government) was weak prior to the
pandemic, pandemic, ~~falling~~fal ing behind the average rate of investment during the previous 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~~fal ing from 4.7% to 2.3% and 2.0%, respectively for the one-wave and two- 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.~~112~~115
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.”~~113~~116 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.~~114~~
117 According to the OECD’s forecast According to the OECD’s forecast
 The greatest impact of the containment restrictions has been on retail and  The greatest impact of the containment restrictions has been 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.
 Business closures may have reduced economic output in advanced and major  Business closures may have reduced economic output in advanced and major
emerging economies by 15% or more; other emerging economies could have emerging economies by 15% or more; other emerging economies could have
experienced a decline in output of 25%.experienced a decline in output of 25%.
 Countries dependent on tourism have been affected more severely, while  Countries dependent on tourism have been affected more severely, while
countries with large agricultural and mining sectors experienced less severe countries with large agricultural and mining sectors experienced less severe
effects.effects.

~~112 Ibid, p. 31.~~
~~113~~ 115 Ibid, p. 31. 116 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.
~~114~~117 Ibid, Ibid, p. 4. p. 4.
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 Economic effects likely varied across countries reflecting differences in the  Economic effects likely varied across countries reflecting differences in the
timing and degree of containment measures. timing and degree of containment measures.~~115~~
118 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
globalizationglobalization and the interconnected nature of economies through capital flows, supply chains, and the interconnected nature of economies through capital flows, supply chains,
and foreign investment, magnify the cost of containing the spread of the virus through and foreign investment, magnify the cost of containing the spread of the virus through
quarantines and restrictions on labor mobility and travel.quarantines and restrictions on labor mobility and travel.~~116~~119 China’s global economic role and China’s global economic role and
globalizationglobalization mean that trade has played a role in spreading the economic effects of COVID-19. 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 producers to finished goods producers; (2) as a result of a drop ~~overall~~ overal in economic activity, 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
Having labeled the projected decline in global economic activity as the “Great Lockdown,” the Having labeled the projected decline in global economic activity as the “Great Lockdown,” the
IMF released an updated forecast in April 2021. The IMF concluded in its revised forecast that IMF released an updated forecast in April 2021. The IMF concluded in its revised forecast that
the global economy was improving, but cautioned that renewed waves of infections and new the global economy was improving, but cautioned that renewed waves of infections and new
variants of the virus could “pose concerns for the outlook.”variants of the virus could “pose concerns for the outlook.”~~117~~120 In addition, the IMF estimated in In addition, the IMF estimated in
its baseline projection that the global economy could decline by 3.5% in 2020, slightly less its baseline projection that the global economy could decline by 3.5% in 2020, slightly less
negative than its October forecast of -4.4%, before growing by 5.5% in 2021, revised up from its negative than its October forecast of -4.4%, before growing by 5.5% in 2021, revised up from its
previous forecast of 5.2%; global trade was projected to previous forecast of 5.2%; global trade was projected to ~~fall~~ fal in 2020 by 8.5% and oil prices were in 2020 by 8.5% and oil prices were
projected to projected to ~~fall~~ fal by 32.7%. For 2021, the IMF forecast indicates that global trade could grow by by 32.7%. For 2021, the IMF forecast indicates that global trade could grow by
8.4% and that oil prices could rebound by 21.2%. The forecast also indicates the economic 8.4% and that oil prices could rebound by 21.2%. The forecast also indicates the economic
recovery recovery ~~will~~ wil be uneven across countries depending on, “access to medical interventions, be uneven across countries depending on, “access to medical interventions,
effectiveness of policy support, exposure to cross-country effectiveness of policy support, exposure to cross-country ~~spillovers~~spil overs, and structural characteristics , and structural characteristics
entering the crisis.” India and China, in particular, are projected to outpace the rate of global entering the crisis.” India and China, in particular, are projected to outpace the rate of global
economic growth, experiencing a rate of growth in 2021 of 12.5% and 8.4%, respectively. economic growth, experiencing a rate of growth in 2021 of 12.5% and 8.4%, respectively.
The IMF’s forecasts reflect the impact of policy measures on the U.S. economy in the first half of The IMF’s forecasts reflect the impact of policy measures on the U.S. economy in the first half of
2020 that are larger than it had assumed in its earlier forecasts, a slower recovery in the second 2020 that are larger than it had assumed in its earlier forecasts, a slower recovery in the second
half of 2020, and the impact of U.S. spending measures adopted in 2021. Also, the IMF forecast half of 2020, and the impact of U.S. spending measures adopted in 2021. Also, the IMF forecast
reflects an estimated larger decline in consumption than previously assumed as consumers reflects an estimated larger decline in consumption than previously assumed as consumers
curtailed spending to increase their savings and the effects of social distancing on economic curtailed spending to increase their savings and the effects of social distancing on economic
activity. The IMF also stated that many countries have faced a multi-layered crisis that included a activity. The IMF also stated that many countries have faced a multi-layered crisis that included a
health crisis, a domestic economic crisis, health crisis, a domestic economic crisis, ~~falling~~fal ing external demand, capital outflows, and a collapse external demand, capital outflows, and a collapse
in commodity prices. In combination, these various effects have interacted in ways that made in commodity prices. In combination, these various effects have interacted in ways that made
forecasting difficult. As a result, the IMF indicated the forecast depend on a number of factors, forecasting difficult. As a result, the IMF indicated the forecast depend on a number of factors,
including including
 The length of the pandemic and required lockdowns.  The length of the pandemic and required lockdowns.
 Voluntary social distancing, which affects consumer spending. Voluntary social distancing, which affects consumer spending.

~~115~~ 118 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.
~~116~~119 Goldin, Goldin, Ian, “COVID-19 ShowsIan, “COVID-19 Shows ~~How~~ How Globalization SpreadsGlobalization Spreads Contagion of All Kinds,”Contagion of All Kinds,” Financial Times, March 2, , March 2,
2020. https://www.ft.com/content/70300682-5d33-11ea-ac5e-df00963c20e6. 2020. https://www.ft.com/content/70300682-5d33-11ea-ac5e-df00963c20e6.
~~117~~120 World Economic Outlook, Update, International Monetary Fund, January 26, 2021. , International Monetary Fund, January 26, 2021.
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 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  The extent of cross-border ~~spillovers~~spil overs from weaker external demand as from weaker external demand as ~~well~~ wel as as
funding funding ~~shortfalls.~~
shortfal s.  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.
The IMF also forecasted that advanced economies as a group could experience an economic The IMF also forecasted that advanced economies as a group could experience an economic
contraction in 2020 of 4.9% of GDP, with the U.S. economy also projected to decline by 3.4%, contraction in 2020 of 4.9% of GDP, with the U.S. economy also projected to decline by 3.4%,
greater than the rate of decline experienced in 2009 during the financial crisis, as indicated in greater than the rate of decline experienced in 2009 during the financial crisis, as indicated in
Figure 6. The rate of economic growth in Euro area GDP in 2020 was projected to decline by . The rate of economic growth in Euro area GDP in 2020 was projected to decline by
7.2%, but growing by 4.2% in 2021. Most developing and emerging economies were projected to 7.2%, but growing by 4.2% in 2021. Most developing and emerging economies were projected to
experience a decline in the average rate of economic growth of 2.2% in 2020, reflecting experience a decline in the average rate of economic growth of 2.2% in 2020, reflecting
tightening global financial conditions and tightening global financial conditions and ~~falling~~fal ing global trade and commodity prices. In contrast, global trade and commodity prices. In contrast,
China was projected to experience China was projected to experience ~~small~~smal , but positive rate of growth in 2020 of 2.3% and by 8.4% , but positive rate of growth in 2020 of 2.3% and by 8.4%
in 2021, while India’s rate of growth was projected to decline by 8.0% in 2020 and grow by in 2021, while India’s rate of growth was projected to decline by 8.0% in 2020 and grow by
12.5% in 2021. The IMF also argued that recovery of the global economy could be weaker than 12.5% in 2021. The IMF also argued that recovery of the global economy could be weaker than
projected as a result of lingering uncertainty about possible contagion, lack of confidence, and 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.permanent closure of businesses and shifts in the behavior of firms and households.~~118~~
121 In an August 2020 analysis, the IMF indicated that fiscal and monetary actions by developed In an August 2020 analysis, the IMF indicated that fiscal and monetary actions by developed
economies provided developing and emerging market economies the abilityeconomies provided developing and emerging market economies the ability to avoid tightening to avoid tightening
monetary policy to stem capital outflows. Instead, the countries relied on movements in their monetary policy to stem capital outflows. Instead, the countries relied on movements in their
exchange rates to carry the brunt of the economic adjustment, while also following developed exchange rates to carry the brunt of the economic adjustment, while also following developed
economies in easing monetary policy, providing liquidityeconomies in easing monetary policy, providing liquidity injections, and using unconventional injections, and using unconventional
monetary policy measures such as purchases of government and corporate bonds. The IMF also monetary policy measures such as purchases of government and corporate bonds. The IMF also
indicated that a prolonged health crisis could push developing economies to take such measures indicated that a prolonged health crisis could push developing economies to take such measures
as price controls, export restrictions, and unorthodox measures to ease credit and financial as price controls, export restrictions, and unorthodox measures to ease credit and financial
regulation.regulation.~~119~~

~~118 Ibid, p. 9.~~
~~119~~122 121 Ibid, p. 9. 122 Mühleisen, Martin, Mühleisen, Martin, ~~Tryggvi~~T ryggvi Gudmundsson, Gudmundsson, and Hélène Poirson Ward, and Hélène Poirson Ward, COVID-19 Response in Emerging Market
~~Economies~~Econom ies: Conventional Policies and Beyond, International Monetary Fund, August International Monetary Fund, August 6, 2020. https://blogs.imf.org/6, 2020. https://blogs.imf.org/
2020/08/06/covid-19-response-in-emerging-market-economies-conventional-policies-and-beyond/?utm_medium=2020/08/06/covid-19-response-in-emerging-market-economies-conventional-policies-and-beyond/?utm_medium=
email&utm_source=govdelivery. email&utm_source=govdelivery.
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Figure 6. IMF Forecast, Gross Domestic Product
Percentage change Percentage change

Source: World Economic Outlook, Update,, International Monetary Fund, AprilInternational Monetary Fund, April 8, 2021. Created by CRS. 8, 2021. Created by CRS.
As a result of the various As a result of the various ~~challenges~~chal enges, the IMF qualified, the IMF qualified its forecast by arguing that 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 theGDP will remain below the pre-viruspre-virus ~~trend, with considerable uncertainty about~~ trend, with considerable uncertainty about the 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 This would follow if the pandemic and containment ~~measures~~measu res last longer, emerging and 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.~~120~~123
The World Bank Forecast
In January 2021, the World Bank released its updated economic forecast, which indicated that In January 2021, the World Bank released its updated economic forecast, which indicated that
global economic growth would reach 4.3% in 2020 and 4.0% in 2021, compared with June 2020 global economic growth would reach 4.3% in 2020 and 4.0% in 2021, compared with June 2020
projections of -5.2% for 2020 and 4.2% in 2021, but rise by a slower rate of 3.8% in 2022.projections of -5.2% for 2020 and 4.2% in 2021, but rise by a slower rate of 3.8% in 2022.~~121~~124 The The
assessment also concluded that absent “substantial and effective reforms,” the global economy assessment also concluded that absent “substantial and effective reforms,” the global economy
would experience a decade of “disappointing growth.” The Bank concluded that the forecast was would experience a decade of “disappointing growth.” The Bank concluded that the forecast was
tilted toward downside risks. In particular, the Bank assessed that tilted toward downside risks. In particular, the Bank assessed that ~~all~~ al regions of the world remain regions of the world remain
vulnerable to renewed outbreaks of the virus, that there were logistical impediments to the vulnerable to renewed outbreaks of the virus, that there were logistical impediments to the
distribution of effective vaccines, that there are financial stresses in addition to elevated debt distribution of effective vaccines, that there are financial stresses in addition to elevated debt
levels and there is the possibility that the pandemic could have a more negative effect on incomes levels and there is the possibility that the pandemic could have a more negative effect on incomes
and growth.and growth.~~122~~125
An earlier forecast published on June 8, 2020 indicated the economic recession in 2020 would be An earlier forecast published on June 8, 2020 indicated the economic recession in 2020 would be
the deepest since World War II. It also estimated that the global economic recession would affect the deepest since World War II. It also estimated that the global economic recession would affect
90% of the world’s economies, a percentage that is greater than what was experienced during the 90% of the world’s economies, a percentage that is greater than what was experienced during the
Great Depression.Great Depression.~~123~~126 Similar to the OECD and the IMF forecasts, the World Bank argued that the Similar to the OECD and the IMF forecasts, the World Bank argued that the

~~120~~ ~~World~~ 123 World Economic Outlook, p. v. , p. v.
~~121~~124 Global Economic Prospects, World Bank Group, January 2021, p. xvii. , World Bank Group, January 2021, p. xvii.
~~122~~125 Ibid, Ibid, p. xviii. p. xviii.
~~123~~126 Global Economic Prospects, World Bank Group, June, World Bank Group, June 8, 2020, p. 15. 8, 2020, p. 15.
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economic impact of the global recession would economic impact of the global recession would ~~fall~~ fal most heavily on developing and emerging most heavily on developing and emerging
economies that rely on global trade, tourism, or remittances from abroad, and those that depend economies that rely on global trade, tourism, or remittances from abroad, and those that depend
on commodity exports. In addition, the World Bank forecasted that most emerging and on commodity exports. In addition, the World Bank forecasted that most emerging and
developing economies could experience rates of growth in 2020 that could be the lowest developing economies could experience rates of growth in 2020 that could be the lowest ~~overall~~
overal since the 1960s, with 90% of such economies expected to experience contractions in per capita since the 1960s, with 90% of such economies expected to experience contractions in per capita
incomes and many incomes and many ~~millions~~mil ions of people of people ~~falling~~fal ing back into poverty. back into poverty.
The World Bank also estimated that economic growth in advanced economies could decline by The World Bank also estimated that economic growth in advanced economies could decline by
5.4% in 2020 and recover to 3.3% in 2021, compared with the June forecast of 7.0% and 3.8%, 5.4% in 2020 and recover to 3.3% in 2021, compared with the June forecast of 7.0% and 3.8%,
respectively. The United States, the Euro area and Japan were respectively. The United States, the Euro area and Japan were ~~all~~ al estimated to experience a slower estimated to experience a slower
rate of growth in 2020 and rise at a rate of growth in 2020 and rise at a ~~smaller~~smal er rate in 2021 than the IMF forecast. rate in 2021 than the IMF forecast.
The global economic recession was projected to affect The global economic recession was projected to affect ~~all~~ al regions in a type of synchronous 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 were attributed to the “scale of the domestic outbreak, vulnerability of the economy growth rates were attributed to the “scale of the domestic outbreak, vulnerability of the economy
to to ~~spillovers~~spil overs from global economic and financial stress the severity of preexisting from global economic and financial stress the severity of preexisting ~~challenges~~chal enges such 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.”~~124~~
127 According to the Bank’s baseline scenario, the projected economic recovery was expected to be According to the Bank’s baseline scenario, the projected economic recovery was expected to be
slow, reflecting shifts in consumption and work patterns as consumers attempted to rebuild slow, reflecting shifts in consumption and work patterns as consumers attempted to rebuild
savings and businesses strengthen balance sheets. The World Bank also issued both a downside savings and businesses strengthen balance sheets. The World Bank also issued both a downside
and an upside scenario in which government lockdown policies were required to remain in effect and an upside scenario in which government lockdown policies were required to remain in effect
for a longer or a shorter period of time, respectively. The downside scenario projects a contraction for a longer or a shorter period of time, respectively. The downside scenario projects a contraction
in global economic growth of 8% in 2020, as lockdown procedures are assumed to last an in global economic growth of 8% in 2020, as lockdown procedures are assumed to last an
additional three months, followed by a sluggish recovery. In contrast, the upside scenario projects additional three months, followed by a sluggish recovery. In contrast, the upside scenario projects
a decline in economic activity in 2020 of 4%, based on the assumption that economic activity a decline in economic activity in 2020 of 4%, based on the assumption that economic activity
rebounds quickly in the third quarter of 2020.rebounds quickly in the third quarter of 2020.~~125~~128
The Bank also concluded that global value chains (GVCs) had been important conduits through The Bank also concluded that global value chains (GVCs) had been important conduits through
which macroeconomic developments associated with the pandemic had been transmitted across which macroeconomic developments associated with the pandemic had been transmitted across
national borders. The economic effects of the pandemic were spread through trade linkages but national borders. The economic effects of the pandemic were spread through trade linkages but
also amplifiedalso amplified through quarantines, production shutdowns and border closures.through quarantines, production shutdowns and border closures.~~126~~129 Estimates by Estimates by
the World Bank indicated that nationalthe World Bank indicated that national policies adopted to blunt the spread of the virus affected policies adopted to blunt the spread of the virus affected
the global economy through four shocks: a decline in employment due to factory closures and the global economy through four shocks: a decline in employment due to factory closures and
social distancing, a trade shock as a result of an increase in the cost of traded goods, a tourism social distancing, a trade shock as a result of an increase in the cost of traded goods, a tourism
shock through a sharp contraction in international tourism, and a services shock. The magnitude shock through a sharp contraction in international tourism, and a services shock. The magnitude
of the shocks varies by country depended on various factors, including the composition of output, of the shocks varies by country depended 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 March 31, 2021 forecast update, the World Trade Organization (WTO) estimated According to a March 31, 2021 forecast update, the World Trade Organization (WTO) estimated
that global trade volumes that global trade volumes ~~fell~~ fel by 5.3% in 2020, nearly half as much as the drop of 9.2% the WTO by 5.3% in 2020, nearly half as much as the drop of 9.2% the WTO
had forecasted in October 2020.had forecasted in October 2020.~~127~~130 The WTO concluded that the less negative outcome likely The WTO concluded that the less negative outcome likely
resulted from strong monetary and fiscal policy actions of many governments. In particular, the resulted from strong monetary and fiscal policy actions of many governments. In particular, the
WTO attributed the improved growth performance to fiscal policies that supported personal WTO attributed the improved growth performance to fiscal policies that supported personal

~~124~~ 127 Global Economic Prospects June 8, 2020, p. 115. June 8, 2020, p. 115.
~~125~~128 Ibid, Ibid, p. 33. p. 33.
~~126~~129 Ibid, Ibid, p. 118. p. 118.
~~127~~130 World Trade Primed for Strong but Uneven Recovery After COVID-19 Pandemic Shock, World , World ~~Trade~~T rade Organization, Organization,
March 31, 2021. March 31, 2021.
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link to page 44 link to page 44 Global Economic Effects of COVID-19

incomes in advanced economies that, in turn, supported relatively higher levels of consumption incomes in advanced economies that, in turn, supported relatively higher levels of consumption
and global trade. and global trade.
Preliminary data for the fourth quarter indicate that the decline in global Preliminary data for the fourth quarter indicate that the decline in global trade in 2020 was not as trade in 2020 was not as
severe as was estimated in the October 2020 forecast. Global trade volumes are projected to severe as was estimated in the October 2020 forecast. Global trade volumes are projected to
~~partially~~partial y recover in 2021 by increasing at an annual growth rate of 7.2%. This forecast reflects a recover in 2021 by increasing at an annual growth rate of 7.2%. This forecast reflects a
marked revision from the WTO’s April 8, 2020 forecast that global trade volumes could decline marked revision from the WTO’s April 8, 2020 forecast that global trade volumes could decline
between 13% and 32% in 2020 as a result of the economic impact of COVID-19, as indicated in between 13% and 32% in 2020 as a result of the economic impact of COVID-19, as indicated in
Table 8. The updated forecast also indicates that the recovery in global trade in 2021 could be The updated forecast also indicates that the recovery in global trade in 2021 could be
noticeably slower than the WTO had projected in April 2020, primarily reflecting expectations of noticeably slower than the WTO had projected in April 2020, primarily reflecting expectations of
a slower recovery in global GDP in 2021. a slower recovery in global GDP in 2021.
In the first quarter of 2020, global exports and imports In the first quarter of 2020, global exports and imports ~~fell~~ fel by 7.8% and 6.8%, respectively, in by 7.8% and 6.8%, respectively, in
volume terms and 10.6% and 8.6% in value terms, reflecting the global economic impact of the volume terms and 10.6% and 8.6% in value terms, reflecting the global economic impact of the
pandemic, as indicated in pandemic, as indicated in Figure 7. In the second quarter, global exports and imports dropped by . In the second quarter, global exports and imports dropped by
11.6% and 11.1%, respectively, in volume and by 13.4% and 14.1%, in value terms. The WTO 11.6% and 11.1%, respectively, in volume and by 13.4% and 14.1%, in value terms. The WTO
also estimated that some trade sectors were affected more than others, particularly trade in fuels also estimated that some trade sectors were affected more than others, particularly trade in fuels
and mineral products and mineral products ~~fell~~ fel by 38%, while trade in agricultural products by 38%, while trade in agricultural products ~~fell~~ fel by 5%. In the third by 5%. In the third
quarter, however, export and import volumes rebounded, increasing by 15.7% and 12.9%, quarter, however, export and import volumes rebounded, increasing by 15.7% and 12.9%,
respectively, while export and import values increased by 20.7% and 18.3%, respectively. In the respectively, while export and import values increased by 20.7% and 18.3%, respectively. In the
fourth quarter, global exports and imports increased by 6.1% and 7.2%, respectively, in volume fourth quarter, global exports and imports increased by 6.1% and 7.2%, respectively, in volume
terms and by 9.7% and 9.6%, in value terms. Although the WTO has no comprehensive data on terms and by 9.7% and 9.6%, in value terms. Although the WTO has no comprehensive data on
trade in services, it concluded that the trend in trade in services likely matched that experienced in trade in services, it concluded that the trend in trade in services likely matched that experienced in
trade in merchandise goods. The updated forecast also projected that global GDP could decline at trade in merchandise goods. The updated forecast also projected that global GDP could decline at
an annual rate of 4.8% in 2020, but recover in 2021 with an annual growth rate of 4.9%.an annual rate of 4.8% in 2020, but recover in 2021 with an annual growth rate of 4.9%.
The WTO indicated in its forecast update that renewed economic lockdowns in response to a The WTO indicated in its forecast update that renewed economic lockdowns in response to a
resurgence of COVID-19 cases in the resurgence of COVID-19 cases in the ~~fall~~ fal of 2020 could shave an additionalof 2020 could shave an additional 2% to 3% percentage 2% to 3% percentage
points off the annual global GDP growth rate in 2021 and negatively affect global trade. In points off the annual global GDP growth rate in 2021 and negatively affect global trade. In
addition, the WTO estimated that uncertainty over additional fiscal measures and relatively high addition, the WTO estimated that uncertainty over additional fiscal measures and relatively high
rates of unemployment could reduce global merchandise trade growth by up to 4% in 2021. By rates of unemployment could reduce global merchandise trade growth by up to 4% in 2021. By
region, the WTO forecast indicated that Europe and North America could experience the largest region, the WTO forecast indicated that Europe and North America could experience the largest
declines in the rate of growth of trade volumes, while Asia would experience the declines in the rate of growth of trade volumes, while Asia would experience the ~~smallest~~smal est decline decline
in the growth rate of trade volumes, primarily based on a projected increase in trade by China. in the growth rate of trade volumes, primarily based on a projected increase in trade by China.
The WTO reported in its June 29, 2020 report on G-20 trade measures that during the mid- The WTO reported in its June 29, 2020 report on G-20 trade measures that during the mid-
October 2019 to mid-May 2020 period, countries had made “significant” progress in facilitating October 2019 to mid-May 2020 period, countries had made “significant” progress in facilitating
imports, including products related to COVID-19.imports, including products related to COVID-19.~~128~~131 According to the report, various According to the report, various
governments governments ~~initially~~ initial y responded to the pandemic by introducing new trade restrictive measures, responded to the pandemic by introducing new trade restrictive measures,
90% of which were export bans on medical products, such as surgical masks, gloves, medicine 90% of which were export bans on medical products, such as surgical masks, gloves, medicine
and disinfectant. Since then, the WTO indicated that G20 economies have repealed 36% of the and disinfectant. Since then, the WTO indicated that G20 economies have repealed 36% of the
restrictions and lowered barriers to imports of many pandemic-related products. As of mid-May restrictions and lowered barriers to imports of many pandemic-related products. As of mid-May
2020, the WTO reported that 65 of the 93 pandemic-related trade measures implemented during 2020, the WTO reported that 65 of the 93 pandemic-related trade measures implemented during
the monitoring period were of a trade-facilitating measures, rather than trade-restricting the monitoring period were of a trade-facilitating measures, rather than trade-restricting
measures.measures.~~129~~

~~128 WTO~~132 131 WT O Report on G20 Shows Report on G20 Shows Moves to Facilitate Imports Even as Moves to Facilitate Imports Even as ~~Trade~~T rade Restrictions Remain Widespread, 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.
~~129~~132 Report on G20 Trade Measures (Mid-October 2019 to Mid-May 2020), World World ~~Trade~~T rade Organization, June 29, 2020. Organization, June 29, 2020.
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Figure 7. WTO Estimates of Quarterly Global Exports and Imports,
Volumes and Values

Source: WorldWorld Trade Organization, March 31, 2021. Created by CRS. Trade Organization, March 31, 2021. Created by CRS.
In its April 2020 forecast, the WTO presented two estimates of global growth, reflecting the high In its April 2020 forecast, the WTO presented two estimates of global growth, reflecting the high
degree of uncertainty concerning the length and economic impact of the pandemic. According to degree of uncertainty concerning the length and economic impact of the pandemic. According to
the WTO, the more optimistic scenario assumed that trade volumes would recover quickly in the the WTO, the more optimistic scenario assumed that trade volumes would recover quickly in the
second half of 2020 to their pre-pandemic trend, or that the global economy would experience a second half of 2020 to their pre-pandemic trend, or that the global economy would experience a
V-shaped recovery. In comparison, the more pessimistic scenario assumed there would be a V-shaped recovery. In comparison, the more pessimistic scenario assumed there would be a
partial recovery in global trade that lasted into 2021, or that global economic activity would partial recovery in global trade that lasted into 2021, or that global economic activity would
experience a U-shaped recovery. The updated forecast reflects the WTO’s estimate that global experience a U-shaped recovery. The updated forecast reflects the WTO’s estimate that global
trade volumes in 2020 trade volumes in 2020 ~~will not fall~~ wil not fal by as much as it had projected under both of the scenarios in by as much as it had projected under both of the scenarios in
its Aprilits April 2020 forecast. The WTO concluded, however, that the impact on global trade volumes 2020 forecast. The WTO concluded, however, that the impact on global trade volumes
could exceed the drop in global trade during the height of the 2008-2009 financial crisis.could exceed the drop in global trade during the height of the 2008-2009 financial crisis.~~130~~
133 Table 8. WTO Forecast: Merchandise Trade Volume and Real GDP 2020-2021
Annual percentage change Annual percentage change
Forecast Forecast

Optimistic Optimistic
Pessimistic Pessimistic
scenario scenario
Forecast scenario Forecast scenario
scenario (April scenario (April
scenario (April scenario (April
(October (October

2020) 2020)
2020) 2020)
2020) 2020)
(March 2021 (March 2021

2020 2020
2021 2021
2020 2020
2021 2021
2020 2020
2021 2021
2020 2020
2021 2021
2022 2022
Volume of world
merchandise trade
-12.9% -12.9%
21.3% 21.3%
-31.9% -31.9% 24.0% 24.0%
-9.2% -9.2%
7.2% 7.2%
-5.3% -5.3%
8.0% 8.0%
4.0% 4.0%
Exports

North America North America
-17.1 -17.1
23.7 23.7
-40.9 -40.9
19.3 19.3
-14.7 -14.7
10.7 10.7
-8.5 -8.5
7.7 7.7
5.1 5.1
South and Central America South and Central America
-12.9 -12.9
18.6 18.6
-31.3 -31.3
14.3 14.3
-7.7 -7.7
5.4 5.4
-4.5 -4.5
3.2 3.2
2.7 2.7
Europe Europe
-12.2 -12.2
20.5 20.5
-32.8 -32.8
22.7 22.7
-11.7 -11.7
8.2 8.2
-8.0 -8.0
8.3 8.3
3.9 3.9
CIS CIS

-3.9 -3.9
4.4 4.4
1.9 1.9
Africa Africa

-8.1 -8.1
8.1 8.1
3 3

~~130~~ 133 Trade Set to Plunge as COVID-19 Pandemic Upends Global Economy, World , World ~~Trade~~T rade Organization, April 8, 2020. 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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Forecast Forecast

Optimistic Optimistic
Pessimistic Pessimistic
scenario scenario
Forecast scenario Forecast scenario
scenario (April scenario (April
scenario (April scenario (April
(October (October

2020) 2020)
2020) 2020)
2020) 2020)
(March 2021 (March 2021

2020 2020
2021 2021
2020 2020
2021 2021
2020 2020
2021 2021
2020 2020
2021 2021
2022 2022
Middle East Middle East

-8.2 -8.2
12.4 12.4
5.0 5.0
Asia Asia
-13.5 -13.5
24.9 24.9
-36.2 -36.2
36.1 36.1
-4.5 -4.5
5.7 5.7
0.3 0.3
8.4 8.4
3.5 3.5
Other regions Other regions
-8.0 -8.0
8.6 8.6
-8.0 -8.0
9.3 9.3
-9.5 -9.5
6.1 6.1

Imports

North America North America
-14.5 -14.5
27.3 27.3
-33.8 -33.8
29.5 29.5
-8.7 -8.7
6.7 6.7
-6.1 -6.1
11.4 11.4
4.9 4.9
South and Central America South and Central America
-22.2 -22.2
23.2 23.2
-43.8 -43.8
19.5 19.5
-13.5 -13.5
6.5 6.5
-9.3 -9.3
8.1 8.1
3.7 3.7
Europe Europe
-10.3 -10.3
19.9 19.9
-28.9 -28.9
24.5 24.5
-10.3 -10.3
8.7 8.7
-7.6 -7.6
8.4 8.4
3.7 3.7
CIS CIS

-4.7 -4.7
5.7 5.7
2.7 2.7
Africa Africa

-8.8 -8.8
5.5 5.5
4 4
Middle East Middle East

-11.3 -11.3
7.2 7.2
4.5 4.5
Asia Asia
-11.8 -11.8
23.1 23.1
-31.5 -31.5
25.1 25.1
-4.4 -4.4
6.2 6.2
-1.3 -1.3
5.7 5.7
4.4 4.4
Other regions Other regions
-10 -10
13.6 13.6
-22.6 -22.6
18.0 18.0
-16.0 -16.0
5.6 5.6

World Real GDP at
market exchange rates
-2.5 -2.5
7.4 7.4
-8.8 -8.8
5.9 5.9
-4.8 -4.8
4.9 4.9
-3.8 -3.8
5.1 5.1
3.8 3.8
North America North America
-3.3 -3.3
7.2 7.2
-9.0 -9.0
5.1 5.1
-4.4 -4.4
3.9 3.9
-4.1 -4.1
5.9 5.9
3.8 3.8
South and Central America South and Central America
-4.3 -4.3
6.5 6.5
-11 -11
4.8 4.8
-7.5 -7.5
3.8 3.8
-7.8 -7.8
3.8 3.8
3.0 3.0
Europe Europe
-3.5 -3.5
6.6 6.6
-10.8 -10.8
5.4 5.4
-7.3 -7.3
5.2 5.2
-7.1 -7.1
3.7 3.7
3.6 3.6
CIS CIS

-0.5 -0.5
1.0 1.0
1.2 1.2
Africa Africa

-2.9 -2.9
2.6 2.6
3.8 3.8
Middle East Middle East

-6.0 -6.0
2.4 2.4
3.5 3.5
Asia Asia
-0.7 -0.7
8.7 8.7
-7.1 -7.1
7.4 7.4
-2.4 -2.4
5.9 5.9
-1.1 -1.1
6.1 6.1
4.1 4.1
Other regions Other regions
-1.5 -1.5
6.0 6.0
-6.7 -6.7
5.2 5.2
-5.5 -5.5
3.5 3.5

Source: World Trade Primed for Strong but Uneven Recovery After COVID-19 Pandemic Shock,, World Trade World Trade
Organization, March, 31, 2021. Organization, March, 31, 2021.
Note: Data for 2021 and 2022 are projections; GDP projections are based on scenarios Data for 2021 and 2022 are projections; GDP projections are based on scenarios simulated with the simulated with the
WTO Global Trade Model. In the April and October forecasts, the CIS countries, Africa,WTO Global Trade Model. In the April and October forecasts, the CIS countries, Africa, and the Middle East and the Middle East
were grouped together as “Other Regions.. CIS is the Commonwealthwere grouped together as “Other Regions.. CIS is the Commonwealth of Independent States: Azerbaijan, of Independent States: Azerbaijan,
Armenia,Armenia, Belarus, Georgia,Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan,Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Uzbekistan, and Turkmenistan, Uzbekistan, and
Ukraine. Ukraine.
The WTO’s various forecasts indicate that The WTO’s various forecasts indicate that ~~all~~ al geographic regions could experience a rise in trade geographic regions could experience a rise in trade
volumes in 2021 and 2022 compared with 2020, while North America and Europe could volumes in 2021 and 2022 compared with 2020, while North America and Europe could
experience a percentage increase in trade volumes in 2021 comparable to the decline in volumes experience a percentage increase in trade volumes in 2021 comparable to the decline in volumes
in percentage terms experienced in 2020. The forecast also projected that sectors with extensive in percentage terms experienced in 2020. The forecast also projected that sectors with extensive
value chains, such as automobile products and electronics, could experience the steepest declines value chains, such as automobile products and electronics, could experience the steepest declines
in 2020. Although services were not included in the WTO forecast, this segment of the economy in 2020. Although services were 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 could experience the largest disruption as a consequence of restrictions on travel and transport
and the closure of retail and hospitality establishments. Such services as information technology, and the closure of retail and hospitality establishments. Such services as information technology,
however, were growing to satisfy the demands of employees working from home.however, were growing to satisfy the demands of employees working from home.
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The pandemic also raised questions about the costs and benefits of the global supply chains that The pandemic also raised questions about the costs and benefits of the global supply chains that
businesses have erected over the past three decades. Evidence indicates that growth in supply businesses have erected over the past three decades. Evidence indicates that growth in supply
chains had slowed prior to the pandemic, but there is little consensus on the long-term impact of chains had slowed prior to the pandemic, but there is little consensus on the long-term impact of
the crisis. According to a December 2020 report by DHL and the New York University Stern the crisis. According to a December 2020 report by DHL and the New York University Stern
Scholl of Business, global interconnectedness comprises four distinct types of transactions: trade, Scholl of Business, global interconnectedness comprises four distinct types of transactions: trade,
capital, information, and people.capital, information, and people.~~131~~134 This analysis concluded that the pandemic affected cross- This analysis concluded that the pandemic affected cross-
border movements of people in response to travel restrictions and in trade through a sharp border movements of people in response to travel restrictions and in trade through a sharp
contraction in the global economy. Capital flows also dropped during 2020 as a result of lower contraction in the global economy. Capital flows also dropped during 2020 as a result of lower
corporate earnings, business travel restrictions, negative business prospects, and concerns over corporate earnings, business travel restrictions, negative business prospects, and concerns over
global supply chains.global supply chains.~~132~~135
In some cases, businesses have been reassessing their exposure to the risks posed by extensive In some cases, businesses have been reassessing their exposure to the risks posed by extensive
supply chains that supply chains that ~~potentially~~potential y are vulnerable to numerous points of disruption. Also, some are vulnerable to numerous points of disruption. Also, some
governments have been assessing the risks supply chains pose to national supplies of items governments have been assessing the risks supply chains pose to national supplies of items
considered to be important to national security as a result of firms locating or shifting production considered to be important to national security as a result of firms locating or shifting production
offshore. For multinational businesses, changing suppliers and shifting production locations can offshore. For multinational businesses, changing suppliers and shifting production locations can
be be ~~especially~~ especial y costly for some firms and can introduce additional risks.costly for some firms and can introduce additional risks.~~133~~136 In addition, businesses In addition, businesses
may be reluctant to relocate from production locations, such as China, that not only serve as may be 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 production platforms, but are also important markets for their output. For instance, the Bureau of
Economic Analysis (BEA)Economic Analysis (BEA) reports that 10% of the global sales of the majority-owned foreign 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% affiliates of 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 of such sales 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 the sales of the shipped to other foreign countries in close proximity. For China, about 6% of the sales of the
majority-owned foreign affiliates of U.S. parent companies are shipped to the U.S. parent, while majority-owned foreign affiliates of U.S. parent companies are shipped to the U.S. parent, while
82% is sold in China and another 12% is shipped to other foreign countries.82% is sold in China and another 12% is shipped to other foreign countries.~~134~~137
Beyond the current Beyond the current ~~challenges~~chal enges the pandemic poses to global supply chains, a recent report the pandemic poses to global supply chains, a recent report
catalogues a number of risks that can disrupt supply chains.catalogues a number of risks that can disrupt supply chains.~~135~~138 The report estimates that 16% to The report estimates that 16% to
26% of global goods exports, worth $2.9 26% of global goods exports, worth $2.9 ~~trillion to $4.6 trillion, potentially~~tril ion to $4.6 tril ion, potential y could move to new could move to new
countries over the next five years “if companies restructure their supplier networks.” The report countries over the next five years “if companies restructure their supplier networks.” The report
concluded, however, that the pandemic so far had not reshaped global production networks in concluded, however, that the pandemic so far had not reshaped global production networks in
dramatic ways, because the networks reflect, “economic logic, hundreds of dramatic ways, because the networks reflect, “economic logic, hundreds of ~~billions~~bil ions of dollars’ of dollars’
worth of investment, and long-standing supplier relationships.”worth of investment, and long-standing supplier relationships.”~~136~~139 In addition, the report In addition, the report
concluded that although firms can shift production locations, the interconnected nature of these concluded that although firms can shift production locations, the interconnected nature of these
chains “limits the economic case for making large-scale changes in their physical location.”chains “limits the economic case for making large-scale changes in their physical location.”~~137~~140
Instead of shifting production locations, firms are considering a number of strategies to withstand Instead of shifting production locations, firms are considering a number of strategies to withstand
the the ~~challenges~~chal enges of a global economy by increasing sources of raw materials and critical materials, of a global economy by increasing sources of raw materials and critical materials,

~~131~~ 134 Altman, Steven A. and Phillip Bastian, Altman, Steven A. and Phillip Bastian, DHL Global Connectedness Index 2020, 2020 , 2020
~~132~~135 Ibid, Ibid, p. 32. p. 32.
~~133~~136 Beattie, Alan, Will Coronavirus Pandemic Finally Kill Off Global Beattie, Alan, Will Coronavirus Pandemic Finally Kill Off Global ~~Supply~~ Supply Chains?, Chains?, Financial Times, May 28, 2020. , May 28, 2020.
https://www.ft.com/content/4ee0817a-809f-11ea-b0fb-13524ae1056b. https://www.ft.com/content/4ee0817a-809f-11ea-b0fb-13524ae1056b.
~~134~~137 Activities of U.S. Multinational Enterprises: U.S. Parent Companies and Their Foreign Affiliates, ~~Preliminary~~ Preliminary 2017
Statistics, Bureau, Bureau of Economic Analysis, Augustof Economic Analysis, August 23, 2019, 23, 2019, ~~Table~~T able II.E.2. https://www.bea.gov/news/2019/activities-us- II.E.2. https://www.bea.gov/news/2019/activities-us-
multinational-enterprises-2017. multinational-enterprises-2017.
~~135~~138 Risk, Resilience, and Rebalancing in Global Value Chains, McKinsey Global, McKinsey Global Institute, August 2020, p. 1 Institute, August 2020, p. 1
~~136~~139 Ibid, Ibid, p. 2. p. 2.
~~137~~140 Ibid, Ibid, In Brief. In Brief.
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expanding and diversifying supplier bases, investing in suppliers to upgrade their capabilities, and expanding and diversifying supplier bases, investing in suppliers to upgrade their capabilities, and
~~regionalizing~~ regionalizing supply chains, among a number of possible actions.supply chains, among a number of possible actions.~~138~~141
Amidst the decline in global trade, 15 countries, including Brunei, Colombia, Indonesia, Laos, Amidst the decline in global trade, 15 countries, including Brunei, Colombia, Indonesia, Laos,
Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam. Australia, China, Japan, New Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam. Australia, China, Japan, New
Zealand, and South Korea, signed the Regional Comprehensive Economic Partnership (RCEP) on Zealand, and South Korea, signed the Regional Comprehensive Economic Partnership (RCEP) on
November 15, 2020, to create November 15, 2020, to create ~~potentially~~potential y one of the largest free trade agreements. one of the largest free trade agreements.~~139~~142 The The
agreement needs to be ratified by at least six ASEAN countries and three non-ASEAN countries. agreement needs to be ratified by at least six ASEAN countries and three non-ASEAN countries.
This agreement follows by two years the conclusion of negotiations over the Comprehensive and This agreement follows by two years the conclusion of negotiations over the Comprehensive and
Progressive Agreement for Trans-Pacific Partnership (CPTPP) that replaced the proposed Trans-Progressive Agreement for Trans-Pacific Partnership (CPTPP) that replaced the proposed Trans-
Pacific Partnership agreement after the United States pulled out of the negotiations. The Pacific Partnership agreement after the United States pulled out of the negotiations. The
agreement includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, agreement includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand,
Peru, Singapore, and Vietnam. The UK reportedly has applied to join the trade agreement. Peru, Singapore, and Vietnam. The UK reportedly has applied to join the trade agreement.
Global Foreign Investment
According to the United Nations Conference on Trade and Development (UNCTAD), global According to the United Nations Conference on Trade and Development (UNCTAD), global
foreign direct investment inflows foreign direct investment inflows ~~fell~~ fel by 42% in 2020 compared with the same period in 2019, by 42% in 2020 compared with the same period in 2019,
with continued weakness expected in 2021, as indicated in with continued weakness expected in 2021, as indicated in Figure 8..~~140~~143 Global inflow totals were Global inflow totals were
driven in large part by the decline in foreign investment inflows to developed economies, which driven in large part by the decline in foreign investment inflows to developed economies, which
~~fell~~ fel by 69%. Inflows to Europe by 69%. Inflows to Europe ~~fell~~ fel to -$4 to -$4 ~~billion~~bil ion, compared with inflows in 2019 of $344 , compared with inflows in 2019 of $344 ~~billion~~bil ion. .
In contrast, inflows to developing economies In contrast, inflows to developing economies ~~fell~~ fel by 12% over the period, aided in large part by by 12% over the period, aided in large part by
positive inflows to China. Investment flows to developing Asia, at $476 positive inflows to China. Investment flows to developing Asia, at $476 ~~billion,~~ bil ion, dropped by 4% dropped by 4%
compared with 2019 and accounted for about half the total $859 compared with 2019 and accounted for about half the total $859 ~~billion~~ bil ion global direct investment global direct investment
inflows in 2020. inflows in 2020.

~~138~~ 141 Risk, Resilience, and Rebalancing in Global Value Chains, p. 16. , p. 16.
~~139~~142 Shih, Gerry, and Simon Denyer, As Shih, Gerry, and Simon Denyer, As ~~Trump~~T rump Era Ends, Massive Era Ends, Massive ~~New Asian Trade~~ New Asian T rade Deal Leaves U.S. Deal Leaves U.S. on the Sidelines, on the Sidelines,
Washington Post, November 16, 2020. https://www.washingtonpost.com/world/asia_pacific/trade-china-trump-obama- November 16, 2020. https://www.washingtonpost.com/world/asia_pacific/trade-china-trump-obama-
asia/2020/11/16/f02f43e4-27b7-11eb-9c21-3cc501d0981f_story.html. asia/2020/11/16/f02f43e4-27b7-11eb-9c21-3cc501d0981f_story.html.
~~140~~143 Investment Trends Monitor, United Nations Conference on , United Nations Conference on ~~Trade~~T rade and Development, January, 2021. and Development, January, 2021.
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Figure 8. Foreign Direct Investment Inflows by Major Country Groups
Inflows in $ Inflows in $ ~~billions~~bil ions

Source: United Nations Conference on Trade and Development.United Nations Conference on Trade and Development. Created by CRS. Created by CRS.
As indicated in As indicated in Figure 9, , ~~all~~ al major geographic areas except Asia experienced a drop in foreign major geographic areas except Asia experienced a drop in foreign
direct investment inflows in 2020 compared with 2019.direct investment inflows in 2020 compared with 2019.~~141~~144 This drop in foreign investment was This drop in foreign investment was
apparent in the three major types of foreign investment: cross-border investments; greenfield apparent in the three major types of foreign investment: cross-border investments; greenfield
investment, or investment in new business activity; and international project finance. In the three investment, or investment in new business activity; and international project finance. In the three
types of investment activity, global activity types of investment activity, global activity ~~fell~~ fel by 10%, 35%, and 2%, respectively in 2020 by 10%, 35%, and 2%, respectively in 2020
compared with 2019. Cross-border merger and acquisition (M&A) activity increased by 31% and compared with 2019. Cross-border merger and acquisition (M&A) activity increased by 31% and
147%, respectively, in Asia and Transition economies, but declined by 11% in developed 147%, respectively, in Asia and Transition economies, but declined by 11% in developed
economies and 67% in Latin America. International project finance, reportedly an important economies and 67% in Latin America. International project finance, reportedly an important
source of infrastructure finance, source of infrastructure finance, ~~fell globally~~fel global y by 2%, but rose by 7% in developed economies, by 2%, but rose by 7% in developed economies,
primarily in Europe, and by 17% in Asia. primarily in Europe, and by 17% in Asia.

~~141~~ 144 Investment Trends Monitor, United Nations Conference on , United Nations Conference on ~~Trade~~T rade and Development, January 24, 2021. and Development, January 24, 2021.
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Figure 9. Global Foreign Direct Investment Inflows
In In ~~billions of dollars~~bil ions of dol ars and percentage change and percentage change

Source: United Nations Conference on Trade and Development.United Nations Conference on Trade and Development. Created by CRS. Created by CRS.
For the United States, BEA reported that U.S. direct investment abroad (outflows) and foreign For the United States, BEA reported that U.S. direct investment abroad (outflows) and foreign
direct investment in the United States (inflows) direct investment in the United States (inflows) ~~fell~~ fel by 74% and 89%, respectively, in the first by 74% and 89%, respectively, in the first
half of 2020 compared with the first half of 2019, as indicated in half of 2020 compared with the first half of 2019, as indicated in Figure 10..~~142~~145 The lower The lower
investment numbers reflect, in part, the lower values for equity, mirroring the declines in major investment numbers reflect, in part, the lower values for equity, mirroring the declines in major
equity markets in the first half of 2020. equity markets in the first half of 2020.
For 2020 as a whole, U.S. direct investment outflows fel by 19%, while foreign direct investment inflows fel by 40%. Figure 10. U.S. Direct Investment; Inflows and Outflows

Source: Bureau of Economic Analysis,Bureau of Economic Analysis, Created by CRS. Created by CRS.

~~142~~ 145 U.S. International Transactions, Fourth Quarter and Year 2020, Bureau, Bureau of Economic Analysis, March 23, 2020. of Economic Analysis, March 23, 2020.
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Notes: In the balance of payments, direct investment outflows are represented In the balance of payments, direct investment outflows are represented as a negative value, indicating an as a negative value, indicating an
outflow and direct investment inflowsoutflow and direct investment inflows are representedare represented as positiveas positive values. For presentation purposes, the signs values. For presentation purposes, the signs
for direct investment abroad, or outflows,for direct investment abroad, or outflows, have been reversed. have been reversed.
Economic Policy Challenges
The The ~~challenge~~chal enge for policymakers has been one of implementing targeted policies that address what for policymakers has been one of implementing targeted policies that address what
had been expected to be short-term problems without creating distortions in economies that can had been expected to be short-term problems without creating distortions in economies that can
outlast the impact of the virus itself. Policymakers, however, have been overwhelmed by the outlast the impact of the virus itself. Policymakers, however, have been overwhelmed by the
quickly changing nature of the global health crisis that turned into a global trade and economic quickly changing nature of the global health crisis that turned into a global trade and economic
crisis. During the initialcrisis. During the initial stages of the pandemic, policymakers weighed the impact of policies that stages of the pandemic, policymakers weighed the impact of policies that
addressed the immediate economic effects at the expense of longer-term considerations such as addressed the immediate economic effects at the expense of longer-term considerations such as
debt accumulation. As the pandemic persisted, however, policymakers adopting additional fiscal debt accumulation. As the pandemic persisted, however, policymakers adopting additional fiscal
or monetary measures, in particular, that could complicate the economic impact of the policies or monetary measures, in particular, that could complicate the economic impact of the policies
after the pandemic resides. after the pandemic resides. ~~Initially~~Initial y, many policymakers felt constrained in their ability, many policymakers felt constrained in their ability to respond to respond
to the crisis as a result of limitedto the crisis as a result of limited ~~flexibility~~ flexibility for monetary and fiscal support within conventional for monetary and fiscal support within conventional
standards, given the broad-based synchronized slowdown in global economic growth, standards, given the broad-based synchronized slowdown in global economic growth, ~~especially~~
especial y in manufacturing and trade, that had developed prior to the viral outbreak. The pandemic has also in manufacturing and trade, that had developed prior to the viral outbreak. The pandemic has also
affected global politics as world leaders affected global politics as world leaders ~~cancelled~~cancel ed international international meetings,meetings,~~143~~146 nations began nations began
competing for medical supplies, and some nations reportedly stoked conspiracy theories that competing for medical supplies, and some nations reportedly stoked conspiracy theories that
shifted blame to other countries.shifted blame to other countries.~~144~~
~~Initially,~~ 147 Initial y, the economic effects of the virus were expected to be short-term supply issues as factory the economic effects of the virus were expected to be short-term supply issues as factory
output output ~~fell~~ fel because workers were quarantined to reduce the spread of the virus through social because workers were quarantined to reduce the spread of the virus through social
interaction. The drop in economic activity, interaction. The drop in economic activity, ~~initially~~ initial y in China, has had international repercussions 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 grew, however, that virus-related supply shocks created more prolonged and wide-Concerns grew, however, that virus-related supply shocks created more prolonged and wide-
ranging demand shocks as reduced activity by consumers and businesses leads to a lower rate of 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 profits economic growth. As demand shocks unfold, businesses experience reduced activity and profits
and and ~~potentially~~ potential y escalating and binding credit and liquidityescalating and binding credit and liquidity constraints. While manufacturing firms constraints. While manufacturing firms
experienced supply chain shocks, reduced consumer activity through social distancing affected experienced supply chain shocks, reduced consumer activity through social distancing affected
the services sector of the economy, which accounts for two-thirds of annual U.S. economic the services sector of the economy, which accounts for two-thirds of annual U.S. economic
output. In this environment, manufacturing and services firms output. In this environment, manufacturing and services firms ~~initially~~ initial y tended to hoard cash, tended to hoard cash,
which affected market liquidity. In response, the Federal Reserve, along with other central banks, which affected market liquidity. In response, the Federal Reserve, along with other central banks,
lowered interest rates where possible and expanded lending facilities to provide liquiditylowered interest rates where possible and expanded lending facilities to provide liquidity to to
financial markets and to firms financial markets and to firms ~~potentially~~potential y facing insolvency. facing insolvency.
As the economic effects have persisted, their impact has spread through trade and financial As the economic effects have persisted, their impact has spread through trade and financial
linkages to an ever-broadening group of countries, firms and households. These growing linkages to an ever-broadening group of countries, firms and households. These growing
economic effects economic effects ~~potentially~~potential y increased liquidity constraints and credit market tightening in global increased liquidity constraints and credit market tightening in global
financial markets as firms hoarded cash, with negative financial markets as firms hoarded cash, with negative ~~fallout~~fal out effects on economic growth. At the effects on economic growth. At the
same time, financial markets had been factoring in an increase in government bond issuance in same time, financial markets had been factoring in an increase in government bond issuance in
the United States, Europe, and elsewhere as government debt levels began rising to meet the United States, Europe, and elsewhere as government debt levels began rising to meet
spending obligations during an expected economic recession and increased fiscal spending to 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 demand by fight the effects of COVID-19. Unlike the 2008-2009 financial crisis, reduced demand by

~~143 Taylor, Adam, Teo~~ 146 T aylor, Adam, T eo Armus, and Rick Noak, “ Armus, and Rick Noak, “ Live updates: COVID-19 Live updates: COVID-19 ~~Turmoil~~T urmoil Widens as U.S. Widens as U.S. Death Death ~~Toll~~T oll Mounts; Mounts;
Xi Cancels Japan Xi Cancels Japan ~~Trip~~T rip, , 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/.
~~144~~147 Shih, Gerry, “ Shih, Gerry, “ China Is SubtlyChina Is Subtly Stoking COVID-19 Conspiracy Stoking COVID-19 Conspiracy ~~Theories That~~T heories T hat Blame the U.S. for Outbreak,” 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/.
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consumers, labor market issues, and a reduced level of activity among businesses, rather than consumers, labor market issues, and a reduced level of activity among businesses, rather than
risky trading by global banks, led to corporate credit issues and potential insolvency. These risky trading by global banks, led to corporate credit issues and potential insolvency. These
market dynamics led some observers at the time to question if these events marked the beginning market dynamics led some observers at the time to question if these events marked the beginning
of a full-scale global financial crisis.of a full-scale global financial crisis.~~145~~148
Liquidity Liquidity and credit market issues presented policymakers with a different set of and credit market issues presented policymakers with a different set of ~~challenges~~chal enges than 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 were addressed through a health crisis to macroeconomic and financial market issues that were 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
restrictions on social interactions. restrictions on social interactions. ~~Essentially~~Essential y, while businesses attempted to address worker and , while businesses attempted to address worker and
output issues at the firm level, national leaders attempted to implement fiscal policies to prevent 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 faced economic growth from contracting sharply by assisting workers and businesses that faced
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 In the initial stages of the health crisis, households did not experience the same kind of wealth stages of the health crisis, households did not experience the same kind of wealth
losses they saw during the 2008-2009 financial crisis when the value of their primary residence losses they saw during the 2008-2009 financial crisis when the value of their primary residence
dropped sharply. However, as unemployment numbers rose, job losses resulted in defaults on dropped sharply. However, as unemployment numbers rose, job losses resulted in defaults on
mortgages and delinquencies on rent payments, requiring some financial institutions to provide mortgages and delinquencies on rent payments, requiring some financial institutions to provide
loan forbearance or other mechanism to provide financial assistance. In turn, mortgage defaults loan forbearance or other mechanism to provide financial assistance. In turn, mortgage defaults
threatened to negatively affect the market for mortgage-backed securities, the availabilitythreatened to negatively affect the market for mortgage-backed securities, the availability of funds of funds
for mortgages, and negatively affect the for mortgages, and negatively affect the ~~overall~~ overal rate of economic growth. Losses in the value of rate of economic growth. Losses in the value of
most equity markets in the U.S., Asia, and Europe also affect household wealth, most equity markets in the U.S., Asia, and Europe also affect household wealth, ~~especially~~especial y that of that of
retirees living on a fixed income and others who own equities. Investors that trade in mortgage-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 attempted to backed securities reportedly reduced their holdings while the Federal Reserve attempted to
support the market.support the market.~~146~~149 In the initial stages of the crisis, even traditional policy tools, such as In the initial stages of the crisis, even traditional policy tools, such as
monetary accommodation, apparently were not always processed by markets in a traditional monetary accommodation, apparently were not always processed by markets in a traditional
manner, with equity market indices displaying heightened, rather than lower, levels of uncertainty manner, with equity market indices displaying heightened, rather than lower, levels of uncertainty
following the Federal Reserve’s cut in interest rates. Such volatility added to uncertainties about following the Federal Reserve’s cut in interest rates. Such volatility added to uncertainties about
what governments could do to address weaknesses in the global economy. what governments could do to address weaknesses in the global economy.
Major Economic Developments
Between late February 2020 and January 2021, financial markets from the United States to Asia Between late February 2020 and January 2021, financial markets from the United States to Asia
and Europe were whipsawed as investors alternated between optimism and pessimism amid and Europe were 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 could be.indicate how prolonged and extensive the economic effects could be.~~147~~150 Investors searched for Investors searched for
safe-haven investments, such as the benchmark U.S. Treasury 10-year security, which safe-haven investments, such as the benchmark U.S. Treasury 10-year security, which
experienced a historic drop in yieldexperienced a historic drop in yield to below 1% on March 3, 2020.to below 1% on March 3, 2020.~~148~~151 In response to concerns In response to concerns
that the global economy was in a that the global economy was in a ~~freefall~~freefal , the Federal Reserve lowered key interest rates on , the Federal Reserve lowered key interest rates on

~~145~~ 148 Foroohar, Rana, “ Foroohar, Rana, “ How COVID-19How COVID-19 Became a Corporate Credit Run,” 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.
~~146~~149 Armstrong, Robert, “ Armstrong, Robert, “ Mortgage Investment Funds Become ‘Epicenter’ of Crisis,” 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.
~~147~~150 Samson, Adam and Hudson Samson, Adam and Hudson Lockett ~~Lockett~~, “Stocks Fall Again in Worst Week Since 2008 Crisis,”, “Stocks Fall Again in Worst Week Since 2008 Crisis,” Financial Times, ,
February 28. https://www.ft.com/content/4b23a140-59d3-11ea-a528-dd0f971febbc. February 28. https://www.ft.com/content/4b23a140-59d3-11ea-a528-dd0f971febbc.
~~148 The~~151 T he price and yield price and yield of a bond are inversely related; increased demandof a bond are inversely related; increased demand ~~for Treasury~~ for T reasury securities raises their price, securities raises their price,
which lowerswhich lowers their yield. Levisohn, Ben, “their yield. Levisohn, Ben, “~~The~~ T he 10-Year 10-Year ~~Treasury~~T reasury Yield Fell Yield Fell ~~Below~~ Below 1% for the First 1% for the First ~~Time~~T ime Ever. What Ever. What
~~That~~T hat Means,” Means,” Barrons, March 3, 2020. https://www.barrons.com/articles/the-10-year-treasury-yield-fell-below-1-for-, March 3, 2020. https://www.barrons.com/articles/the-10-year-treasury-yield-fell-below-1-for-
the-first-time-ever-whatthe-first-time-ever-what -that-means-51583267310. -that-means-51583267310.
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March 3, 2020, to shore up economic activity, while the Bank of Japan engaged in asset March 3, 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 purchases to 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 would also assist 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 rate. The International Monetary Fund (IMF) announced that it was making about $50 ~~billion~~bil ion
availableavailable through emergency financing facilities for low-income and emerging market countries through emergency financing facilities for low-income and emerging market countries
and through funds availableand through funds available in its Catastrophe Containment and Relief Trust (CCRT).in its Catastrophe Containment and Relief Trust (CCRT).~~149~~152
Financial Markets
Reflecting investors’ uncertainties, the DJIA lost about one-third of its value between February Reflecting investors’ uncertainties, the DJIA lost about one-third of its value between February
14, 2020, and March 23, 2020, as indicated in 14, 2020, and March 23, 2020, as indicated in Figure 11. Expectations that the U.S. Congress . Expectations that the U.S. Congress
would adopt a $2.0 would adopt a $2.0 ~~trillion~~ tril ion spending package moved the DJIA up by more than 11% on March 24, spending package moved the DJIA up by more than 11% on March 24,
2020. From March 23 to April 15, the DJIA moved higher by 18%, paring its initial2020. From March 23 to April 15, the DJIA moved higher by 18%, paring its initial losses by losses by
half. Since then, the DJIA trended upward, but moved half. Since then, the DJIA trended upward, but moved ~~erratically~~erratical y at times as investors weighed at times as investors weighed
news about the human cost and economic impact of the pandemic and the prospects of various news about the human cost and economic impact of the pandemic and the prospects of various
medical treatments. Between March 23 and July 1, the DJIA regained 70% of the value lost medical treatments. Between March 23 and July 1, the DJIA regained 70% of the value lost
during the February to March decline. On Monday, November 9, the DJIA gained over 800 during the February to March decline. On Monday, November 9, the DJIA gained over 800
points, or nearly three percentage points, as markets responded positively to press reports that an points, or nearly three percentage points, as markets responded positively to press reports that an
effective COVID-19 vaccine had been developed. On November 10, the DJIA rose above 29,400 effective COVID-19 vaccine had been developed. On November 10, the DJIA rose above 29,400
for the first time since the index for the first time since the index ~~fell~~ fel in February 2020. Between January 1, 2021, and February 4, in February 2020. Between January 1, 2021, and February 4,
2021, the DJIA increased by about 3.0%, continuing a rise in the index of 17% since the end of 2021, the DJIA increased by about 3.0%, continuing a rise in the index of 17% since the end of
October 2020. October 2020.
Through April, 2021, the DJIA had gained more than 12% in value and was 16% higher than the value on February 14, 2020. As indicated in ~~As indicated in~~ Table 9, 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 ended with ~~overall~~ overal market values lower than higher. Since March, the index has posted more market values lower than higher. Since March, the index has posted more
trading sessions that closed with positive gains than losses. By October 23, the DJIA had trading sessions that closed with positive gains than losses. By October 23, the DJIA had
recovered most of the value lost in February and March. During the final week of October, the recovered most of the value lost in February and March. During the final week of October, the
DJIA lost more than 1,800 points, the largest weekly loss since March 2020 as Germany, France DJIA lost more than 1,800 points, the largest weekly loss since March 2020 as Germany, France
and other European countries reinstituted lockdowns in response to a resurgence of COVID-19 and other European countries reinstituted lockdowns in response to a resurgence of COVID-19
cases. In the first three days of November, however, the Index regained three-fourths of the value cases. In the first three days of November, however, the Index regained three-fourths of the value
it lost the previous week. it lost the previous week. During the first four months of 2021, the DJIA has gained 12% in value. Announcements of vaccines portending a resurgence of economic Announcements of vaccines portending a resurgence of economic
activity boosted market sentiment in November and December with the DJIA rising by over a activity boosted market sentiment in November and December with the DJIA rising by over a
combined 3,700 points or by nearly 14%. In January 2021, the DJIA dropped by about 1% with combined 3,700 points or by nearly 14%. In January 2021, the DJIA dropped by about 1% with
more trading days ending with the index down than days with the index up from the previous day. more trading days ending with the index down than days with the index up from the previous day.
For some policymakers, For some policymakers, the drop in equity prices in February and March raised concerns that the drop in equity prices in February and March raised concerns that
foreign investors might attempt to exploit the situation by increasing their purchases of firms in foreign investors might attempt to exploit the situation by increasing their purchases of firms in
sectors considered important to national security. For instance, Ursula von der Leyen, president of sectors considered important to national security. For instance, Ursula von der Leyen, president of
the European Commission, urged EU members to better screen foreign investments, the European Commission, urged EU members to better screen foreign investments, ~~especially~~especial y in in
areas such as areas such as health, medical research, and critical infrastructure.health, medical research, and critical infrastructure.~~150~~
~~Table 9. Dow Jones Industrial Average Market Changes by Month~~
~~Sessions up Sessions down~~
~~Open~~
~~Close~~
~~Change in index valuation~~

~~January~~
13
8
~~28,638.97~~
~~28,256.03~~
~~-382.94~~
~~-1.34%~~

~~149~~153 152 Georgieva, Kristalina, “Potential Impact of the COVID-19 Epidemic: What We Know and What We Can Do,” Georgieva, Kristalina, “Potential Impact of the COVID-19 Epidemic: What We Know and What We Can Do,”
International Monetary Fund, March 4, 2020. https://blogs.imf.org/2020/03/04/potential-impact-of-the-COVID-19-, March 4, 2020. https://blogs.imf.org/2020/03/04/potential-impact-of-the-COVID-19-
epidemic-what-we-know-and-whatepidemic-what-we-know-and-what -we-can-do/. -we-can-do/.
~~150~~153 Chazan, Guy Chazan, Guy and Jim Brunsden,and Jim Brunsden, “COVID-19 Crisis“COVID-19 Crisis Pushes Europe into Nationalist Economic Pushes Europe into Nationalist Economic ~~Turn~~T urn,” ,” Financial
~~Times~~Tim es, 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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Table 9. Dow Jones Industrial Average Market Changes by Month Sessions up Sessions down
Open
Close
Change in index ~~valuation~~
valuation January 13 8 28,638.97 28,256.03 -382.94 -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%
July July
13 13
9 9
25,879.38 25,879.38
26,428.32 26,428.32
548.94 548.94
2.12% 2.12%
August August
14 14
7 7
26,542.32 26,542.32
28,430.05 28,430.05
1,887.73 1,887.73
7.11% 7.11%
September September
12 12
9 9
28,439.61 28,439.61
27,781.70 27,781.70
-657.91 -657.91
-2.31% -2.31%
October October
10 10
12 12
27,816.90 27,816.90
26,501.60 26,501.60
-1,315.30 -1,315.30
-4.73% -4.73%
November November
12 12
8 8
26,691.28 26,691.28
29,638.64 29,638.64
2,947.36 2,947.36
11.04% 11.04%
December December
14 14
8 8
29,707.50 29,707.50
30,606.48 30,606.48
808.98 808.98
2.71% 2.71%
January 2021 January 2021
8 8
11 11
30,223.89 30,223.89
~~29981~~29,981.10 .10
-242.79 -242.79
-0.80% -0.80%
February February
15 15
5 5
30,054.73 30,054.73
30,932.37 30,932.37
877.64 877.64
2.92% 2.92%
March March
13 13
10 10
31,065.90 31,065.90
32,981.55 32,981.55
1,915.65 1,915.65
6.17 6.17% April 12 8 33,054.58 33,874.85 820.27 2.48% %
Source: Financial Times, calculations by CRS. , calculations by CRS.
Similar to the 2008-2009 global financial crisis, central banks implemented a series of monetary Similar to the 2008-2009 global financial crisis, central banks implemented a series of monetary
operations to provide liquidityoperations to provide liquidity to their economies. These actions, however, to their economies. These actions, however, ~~initially~~initial y were not were not
viewed entirely positively by viewed entirely positively by ~~all~~ al financial market participants who questioned the use of policy financial market participants who questioned the use of policy
tools by central banks that were similar to those employed during the 2008-2009 financial crisis, tools by central banks that were similar to those employed during the 2008-2009 financial crisis,
despite the fact that the current and previous crisis are despite the fact that the current and previous crisis are ~~fundamentally~~fundamental y different in origin. During different in origin. During
the previous financial crisis, central banks intervened to restart credit and spending by banks that 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 attempted to address had engaged in risky assets. In the current environment, central banks attempted to address
financial market volatility and prevent large-scale corporate insolvencies that reflected the financial market volatility and prevent large-scale corporate insolvencies that reflected the
underlying economic uncertainty caused by the pandemic. underlying economic uncertainty caused by the pandemic.
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Figure 11. Dow Jones Industrial Average ~~Index~~
February 14, 2020, through February 14, 2020, through ~~April 21~~May 3, 2021 , 2021

Source: Financial Times. Created by CRS. . Created by CRS.
International Role of the Dollar
Similar to conditions during the 2008-2009 financial crisis, the dollar emerged as the preferred Similar to conditions during the 2008-2009 financial crisis, the dollar emerged as the preferred
currency by investors, reinforcing its role as the dominant global reserve currency. As indicated in currency by investors, reinforcing its role as the dominant global reserve currency. As indicated in
Figure 12, the dollar appreciated more than 3.0% during the period between March 3 and , the dollar appreciated more than 3.0% during the period between March 3 and ~~March~~
Marc h 13, 2020, reflecting increased international demand for the dollar and dollar-denominated assets. 13, 2020, reflecting increased international demand for the dollar and dollar-denominated assets.
Since the highs reached on March 23, the exchange value of the dollar has dropped between 1% Since the highs reached on March 23, the exchange value of the dollar has dropped between 1%
and 2% per month in a slow decline as financial strains have eased and demand for the dollar in and 2% per month in a slow decline as financial strains have eased and demand for the dollar in
international financial markets has lessened. international financial markets has lessened.
Between mid-May and mid-June, the dollar lost about 3% of its value relative to the currencies of 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. During July, the dollar lost other major trading partners and was equal to its value in mid-March. During July, the dollar lost
over 2% of its value against the currencies of major trading partners, about where it was in mid-over 2% of its value against the currencies of major trading partners, about where it was in mid-
March. By mid-October, the trade-weighted value of the dollar had declined by 8% from the March. By mid-October, the trade-weighted value of the dollar had declined by 8% from the
highest values reached in March and nearly matched the value it recorded at the beginning of highest values reached in March and nearly matched the value it recorded at the beginning of
2020. On November 5, the dollar index returned to the value reported on January 2, 2020 and has 2020. On November 5, the dollar index returned to the value reported on January 2, 2020 and has
remained below that value since. By the end of January 2021, the dollar had depreciated by more remained below that value since. By the end of January 2021, the dollar had depreciated by more
than 11% from the highest value it reached in March 2020. The than 11% from the highest value it reached in March 2020. The ~~reported~~ development of COVID-development of COVID-
19 vaccines 19 vaccines ~~could affect~~likely affects the value of the dollar in various ways, including factors that tend to the value of the dollar in various ways, including factors that tend to
appreciate the dollarappreciate the dollar as a result of renewed economic growth in the United States and opposing as a result of renewed economic growth in the United States and opposing
forces that tend to depreciate the dollar if demand declines for the dollar as a safe-haven currency. forces that tend to depreciate the dollar if demand declines for the dollar as a safe-haven currency.
Despite the appreciation and subsequent depreciation of the dollar through 2020 and 2021 by the end of April, 2021, the dollar was down 2% compared with the value on January 2, 2020. In part, the resolution of the UK’s withdrawal from the EU has strengthened both the Euro and In part, the resolution of the UK’s withdrawal from the EU has strengthened both the Euro and
the pound, the pound, tending to depreciate the value of the dollar. The decline in the value of the dollar tending to depreciate the value of the dollar. The decline in the value of the dollar
reportedly has reportedly has pushed some countries to consider intervening to weaken their currencies.pushed some countries to consider intervening to weaken their currencies.~~151~~

~~151~~154 154 Szalay, Eva, Central Banks Szalay, Eva, Central Banks ~~Take~~T ake Rare Step of Flagging Rare Step of Flagging Currency SalesCurrency Sales in Advance, in Advance, Financial Times, February 3, , February 3,
2021. https://www.ft.com/content/0383f3a4-41a0-464a-b831-fd1a09a6b1b0. 2021. https://www.ft.com/content/0383f3a4-41a0-464a-b831-fd1a09a6b1b0.

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Figure 12. U.S. Dollar Trade-Weighted Broad Index, Goods and Services
January 2, 2020, January 2, 2020, through Aprilthrough April 16 30, 2021 , 2021

Source: St. Louis Federal ReserveSt. Louis Federal Reserve Bank. Created by CRS. Bank. Created by CRS.
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 2019 triennial survey of currency markets.global currency in its 2019 triennial survey of currency markets.~~152~~155 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 international trade, as indicated inin Figure 13. It It also accounts for also accounts for ~~two-thirds~~about 60% of central bank 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.~~153~~156 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).

~~152~~ 155 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.
~~153 See CRS~~ 156 See CRS In FocusIn Focus IF10112, IF10112, Introduction to Financial Services: The International Foreign Exchange Market. .
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Figure 13. International Role of the Dollar

Source: U.S. ~~Dollar~~ Dol ar 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.
Notes: (1) Data refer to 2019. (2) Data refer to 2019. (3) US (1) Data refer to 2019. (2) Data refer to 2019. (3) US ~~dollar~~dol ar-denominated cross-border-denominated cross-border loans by banks loans by banks
to counterparties in to counterparties in ~~all~~ al countries; data refer to Q4 2019 (excluding interoffice claimscountries; data refer to Q4 2019 (excluding interoffice claims but including interbank but including interbank
claimsclaims on account of loans and deposits); loans compriseon account of loans and deposits); loans comprise nonnegotiable debt instruments that are loaned by nonnegotiable debt instruments that are loaned by
creditorscreditors directly to a debtor or representeddirectly to a debtor or represented by evidence of a deposit.by evidence of a deposit. (4) US (4) US ~~dollar~~dol ar denominated international denominated international
debt securitiesdebt securities ~~by all~~ by al issuers;issuers; data referdata refer to Q4 2019; these securitiesto Q4 2019; these securities are issued outside the local marketare issued outside the local market of the of the
country where the borrowercountry where the borrower resides,resides, and capture issuesand capture issues ~~conventionally~~ conventional y known as eurobonds and foreign bonds known as eurobonds and foreign bonds
and exclude negotiable loans; instruments such as bonds, medium-termand exclude negotiable loans; instruments such as bonds, medium-term notes and money market instruments are notes and money market instruments are
included. (5) Data referincluded. (5) Data refer to 2019. (6) Data referto 2019. (6) Data refer to Q4 2019. (7) As estimated in Gopinath (2015). (8) Data refer to Q4 2019. (7) As estimated in Gopinath (2015). (8) Data refer
to February 2020. Sources:to February 2020. Sources: Gopinath (2015); Federal Reserve;Gopinath (2015); Federal Reserve; IMF; CPB WorldIMF; CPB World Trade Monitor; Bloomberg; 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).
As a result of dominant role of the dollar as a global reserve currency, disruptions in the smooth As a result of dominant role of the dollar as a global reserve currency, disruptions in the smooth
functioning of the global dollar market can have wide-ranging repercussions on international 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 of the dollar 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 complex, in the global economy. The report concludes that dollar funding activities are highly complex,
~~geographically~~geographical y dispersed, and interconnected in ways that provide benefits to the stability of the dispersed, and interconnected in ways that provide benefits to the stability of the
global financial system. This also means, however, that strains in the system can easily be global financial system. This also means, however, that strains in the system can easily be
transmitted across different financial markets and across regions.transmitted across different financial markets and across regions.~~154~~
157 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.~~155 Traditionally~~158 Traditional y, most economic models are based , most economic models are 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,
~~domestically~~domestical y produced goods and services become cheaper for trading partners when the produced goods and services 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

~~154~~ 157 Bank for International Settlements, Bank for International Settlements, U.S, Dollar Funding: An International Perspective, CGFS, CGFS Papers, No. 65, June Papers, No. 65, June
2020, p. 52. https://www.bis.org/publ/cgfs65.htm. 2020, p. 52. https://www.bis.org/publ/cgfs65.htm.
~~155~~158 Dominant Currencies and External Adjustment, IMF Staff Discussion, IMF Staff Discussion Note 20/05, International Monetary Fund, Note 20/05, International Monetary Fund,
JulyJuly 2020. 2020.
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other than the United States is invoiced in U.S. dollars. other than the United States is invoiced in U.S. dollars.~~156~~159 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 other countries, at least in the short run, as has been ~~evidenced by~~evident in recent movements in exchange recent movements in exchange
rates and trade volumes of emerging market and developing economies. The IMF also concluded rates and trade volumes of emerging market and developing economies. The IMF also concluded
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 in their exports and, therefore, less of a relative to the dollar provides less of a boost in their exports and, therefore, less of a
countercyclical support.countercyclical support.
Together, these effects translate into movements in the exchange value of the dollar that at times Together, these effects translate into movements in the exchange value of the dollar that at times
contrasts with traditional theory, since such movements do not affect trade volumes as might be contrasts with traditional theory, since such movements do not affect trade volumes as might be
expected. For instance, after appreciating in March 2020, the trade-weighted value of the dollar expected. For instance, after appreciating in March 2020, the trade-weighted value of the dollar
steadily depreciated through December. In standard models, the depreciation in the dollar would steadily depreciated through December. In standard models, the depreciation in the dollar would
be expected to lower export prices and, in turn, increase demand for U.S. exports, or increase the be expected to lower export prices and, in turn, increase demand for U.S. exports, or increase the
volume of exports, while import volumes would be expected to decline along with the rising price volume of exports, while import volumes would be expected to decline along with the rising price
of foreign currencies relative to the dollar. GDP data through the third quarter indicate, however, of foreign currencies relative to the dollar. GDP data through the third quarter indicate, however,
that U.S. trade dropped sharply in real, or index terms, in both the quantity of goods exported or that U.S. trade dropped sharply in real, or index terms, in both the quantity of goods exported or
imported and in the value of those goods, as indicated in imported and in the value of those goods, as indicated in Figure 14.. ~~The~~ Figure 14. Quarterly Price and Quantity Indexes, U.S. Goods Exports and Imports Source: Bureau of Economic Analysis. Created by CRS. Notes: 2012 = 100. BEA data show the sharp drop data show the sharp drop
in U.S. trade volumes for both exports and imports in the first and in U.S. trade volumes for both exports and imports in the first and ~~second~~second quarters of 2020 compared with the previous quarters, largely quarters, largely
reflecting the global economic recession due to policy actions to contain the spread of the viral reflecting the global economic recession due to policy actions to contain the spread of the viral
~~pandemic. In quantity terms, U.S. exports fell by 25%, while imports fell by 15%~~pandemic, as indicated in Table 10. In quantity terms, U.S. export and import volumes fel by 24% and 16%, respectively, in the second in the second
quarterquarter, compared with the preceding quarter. compared with the preceding quarter.160 In value terms, the price of U.S. exports In value terms, the price of U.S. exports ~~fell by 6%,~~
fel by 6.5%, while the price of imports while the price of imports ~~fell~~ fel by 3.by 3.78% in the second quarter % in the second quarter compared with the first quarter. In compared with the first quarter. In
the third quarter, both the third quarter, both ~~exports and imports~~export and import volumes increased by about 20% in volume terms, while export increased by about 20% in volume terms, while export
and import prices rose by 3.7% and 2.and import prices rose by 3.7% and 2.43%, respectively, despite a depreciation in the dollar. In the %, respectively, despite a depreciation in the dollar. In the
fourth quarter, U.S. export and import prices increased slightly, while export and import volumes fourth quarter, U.S. export and import prices increased slightly, while export and import volumes
~~both increased by 7.0%. As a result, exports and imports both increased~~both increased by 7.0%. As a result, the overal value 159 Ibid, p. 8. 160 Gross Domestic Product, First Quarter, 2021 (Advance Estimate), Bureau of Economic Analysis, April 29, 2021. Congressional Research Service 52 Global Economic Effects of COVID-19 of exports and imports rose slightly less than 5% in slightly less than 5% in
the fourth quarter of 2020. the fourth quarter of 2020. ~~Year over year, exports dropped by 15%, while imports dropped by~~
~~9.6%.~~
~~Figure 14. Price and Quantity Indexes, U.S. Goods Exports and Imports~~

Source: Bureau of Economic Analysis. Created by CRS.
Note: 2012 = 100.

~~156 Ibid, p. 8.~~
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~~The international role of the dollar and the well~~According to U.S. balance of payments data, the overal annual value of U.S, goods exports and imports (the combined changes in prices and volumes) dropped by 35% and 16%, respectively year-over-year (2020 compared to 2019). In the first quarter of 2021, U.S. export volumes fel slightly, while import volumes rose by1.4%. Export and import price indexes both rose, reflecting an increase in petroleum export prices of 30% and a rise in petroleum import prices of 38%. Compared to the decline in exports and import volumes in the second quarter of 2020, first quarter 2021 export and import volumes were up 28% and 31%, respectively, reflecting an increase in the global rate of economic growth. Table 10. U.S. Exports and Imports, Change in Quarterly Price and Quantity Indexes (percent change) Year over Year % Change Quarter over Quarter % Change 2019 2020 2020 2021 1q 2q 3q 4q 1q Exports Quantity -0.1% -3.6% -0.7% -24.1% 19.5% 7.0% -0.2% Price -2.2 -2.6 -1.2 -6.5 3.7 1.7 6.0 Imports Quantity -2.9 5.3 -3.0 -15.7 20.4 7.0 1.4 Price -2.5 -1.5 0.4 -3.8 2.3 0.5 3.6 Source: Bureau of Economic Analysis. Quarterly GDP estimates, export and imports price and quantity indices. Created by CRS. Notes: Annual changes represent percent change in 4th quarter index values over the 4th quarter of the preceding year; quarterly changes represent the change in quarterly index values over the previous quarter. The international role of the dollar and the wel -developed U.S. capital markets also provide the -developed U.S. capital markets also provide the
United States with greater latitude in financing its trade deficit. For some trade specialists, the United States with greater latitude in financing its trade deficit. For some trade specialists, the
widely accepted characterization of the current account as a product of a domestic saving-widely accepted characterization of the current account as a product of a domestic saving-
investment relationship fails to distinguish between a country’s domestic saving-investment investment relationship fails to distinguish between a country’s domestic saving-investment
balance, its abilitybalance, its ability to finance its trade deficit, and the role of cross-border capital flows. These to finance its trade deficit, and the role of cross-border capital flows. These
flows suggest that the ability of the United States to finance its trade imbalances through capital flows suggest that the ability of the United States to finance its trade imbalances through capital
inflows eases the constraint imposed by the domestic saving-investment balance. inflows eases the constraint imposed by the domestic saving-investment balance.
The international role of the dollar also increases pressure on the Federal Reserve The international role of the dollar also increases pressure on the Federal Reserve ~~essentially~~essential y to to
assume the lead role as the global lender of last resort. Reminiscent of the financial crisis, the assume the lead role as the global lender of last resort. Reminiscent of the financial crisis, the
global economy has experienced a period of dollar shortage, requiring the Federal Reserve to take global economy has experienced a period of dollar shortage, requiring the Federal Reserve to take
numerous steps to ensure the supply of dollars to the U.S. and global economies, including numerous steps to ensure the supply of dollars to the U.S. and global economies, including
activating existing currency swap arrangements, establishing such arrangements with additional activating existing currency swap arrangements, establishing such arrangements with additional
central banks, and creating new financial facilities to provide liquiditycentral banks, and creating new financial facilities to provide liquidity to central banks and to central banks and
monetary authorities.monetary authorities.~~157 Typically~~161 Typical y, banks lend long-term and borrow short-term and can only , banks lend long-term and borrow short-term and can only
borrow from their home central bank. In turn, central banks can only provide liquidity in their borrow from their home central bank. In turn, central banks can only provide liquidity in their
own currency. Consequently, a bank can become own currency. Consequently, a bank can become ~~illiquid~~il iquid in a panic, meaning it cannot borrow in 161 Politi, James, Brendan Greeley, and Colby Smith, “Fed Sets Up Scheme to Meet Booming Foreign Demand for Dollars,” Financial Tim es, March 31, 2020. https://www.ft.com/content/6c976586-a6ea-42ec-a369-9353186c05bb. Congressional Research Service 53 Global Economic Effects of COVID-19 ~~in a panic, meaning it cannot borrow in~~
private markets to meet short-term cash flow needs. Swap lines are designed to private markets to meet short-term cash flow needs. Swap lines are designed to ~~allow~~al ow foreign foreign
central banks the funds necessary to provide needed liquidity to their country’s banks in dollars.central banks the funds necessary to provide needed liquidity to their country’s banks in dollars.
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.~~158~~162 On March 5, the U.S. Congress passed an On March 5, the U.S. Congress passed an
$8 $8 ~~billion spending bill~~ bil ion spending bil to provide assistance for health care, sick leave, to provide assistance for health care, sick leave, ~~small~~ smal business loans, and 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 investors to ~~sell~~ sel equities and buy sovereign bonds. In overnight trading in various sessions equities and buy sovereign bonds. In overnight trading in various sessions
between March 8, and March 24, U.S. stock market indexes moved sharply (both higher and between March 8, and March 24, U.S. stock market indexes moved sharply (both higher and
lower), triggering automatic circuit breakers designed to halt trading if the indexes rise or lower), triggering automatic circuit breakers designed to halt trading if the indexes rise or ~~fall~~ fal by 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.~~159~~163 By early April, By early April, the the
global mining industry had reduced production by an estimated 20% in response to global mining industry had reduced production by an estimated 20% in response to ~~falling~~
fal ing demand and labor quarantines and as a strategy for raising prices.demand and labor quarantines and as a strategy for raising prices.~~160~~
164 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

~~157 Politi, James, Brendan Greeley, and Colby Smith, “Fed Sets Up Scheme to Meet Booming Foreign Demand for~~
~~Dollars,” Financial Times, March 31, 2020. https://www.ft.com/content/6c976586-a6ea-42ec-a369-9353186c05bb.~~
~~158 Smith, Colby, Richard Henderson, Philip Georgiadis, and Hudson Lockett, “Stocks Tumble and Government Bonds~~
~~Hit Highs on Virus Fears,” Financial Times, March 6, 2020. https://www.ft.com/content/9f94d6f8-5f51-11ea-b0ab-~~
~~339c2307bcd4.~~
~~159 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.
~~160 Hume, Neil, “Mine Closures~~ support to German businesses and financial support for public infrastructure projects.165 At 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 like Treasury securities) after stock market indexes fel sharply, government bond yields fel to record lows (reflecting increased demand), and demand for corporate bonds fel . Together these developments raised concerns for some analysts that instability in stock markets could threaten global financial conditions.166 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. European Central Bank (ECB) President Christine Lagarde in a conference cal to EU leaders warned that without coordinated action, Europe could face a recession similar to the 2008-2009 financial crisis.167 The Bank of England lowered its key interest rate, reduced capital buffers for 162 Smith, Colby, Richard Henderson, Philip Georgiadis, and Hudson Lockett, “ Stocks T umble and Government Bonds Hit Highs on Virus Fears,” Financial Tim es, March 6, 2020. https://www.ft.com/content/9f94d6f8-5f51-11ea-b0ab-339c2307bcd4. 163 Georgiadis, Philip, Adam Samson, and Hudson Lockett, “Stocks Plummet as Oil Crash Shakes Financial Markets,” Financial Tim es, March 9, 2020. https://www.ft.com/content/8273a32a-61e4-11ea-a6cd-df28cc3c6a68. 164 Hume, Neil, “Mine Closures Bolster Metals Prices as Demand Collapses,” Financial Times, April 7, 2020. https://www.ft.com/content/06ef38c9-18d8-427e-8675-a567227397c0. 165 Chazan, Guy, David Keohane, and Martin Arnold, “Europe’s Policymakers Search for Answers to Virus Crisis,” Financial Tim es, March 9, 2020. https://www.ft.com/content/d46467da-61e1-11ea-b3f3-fe4680ea68b5. 166 Smith, Colby and Brendan Greeley, “Fed Pumps Extra Liquidity Into Overnight Lending Markets,” Financial Tim es, March 9, 2020. https://www.ft.com/content/e8c7b5f0-6200-11ea-a6cd-df28cc3c6a68. 167 O’Brien, Fergal, “ECB’s Lagarde Warns of 2008-Style Crisis Unless Europe Acts,” Washington Post, March 11, 2020. https://www.bloomberg.com/news/articles/2020-03-11/ecb-s-lagarde-warns-of-2008-style-crisis-without -urgent - Congressional Research Service 54 Global Economic Effects of COVID-19 UK banks, and provided a funding program for smal and medium businesses. The UK Chancel or of the Exchequer also proposed a budget that would appropriate £30 bil ion (about $35 bil ion) for fiscal stimulus spending, including funds for sick pay for workers, guarantees for loans to smal businesses, and cuts in business taxes. The European Commission announced a €25 bil ion (about $28 bil ion) 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 funding to provide added liquidity to financial markets. 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.168 At its March 12 meeting, the ECB announced €27 bil ion (about $30 bil ion) in stimulus funding, combining measures to expand low-cost loans to Eurozone banks and smal ~~Bolster Metals Prices as Demand Collapses,” Financial Times, April 7, 2020.~~
~~https://www.ft.com/content/06ef38c9-18d8-427e-8675-a567227397c0.~~
~~Congressional Research Service~~

53

~~Global Economic Effects of COVID-19~~

~~support to German businesses and financial support for public infrastructure projects.161 At 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~~
~~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~~
~~developments raised concerns for some analysts that instability in stock markets could threaten~~
~~global financial conditions.162~~
~~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.~~
~~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~~
~~financial crisis.163 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~~
~~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~~
~~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~~
~~announced that it would expand its repo market purchases to provide larger and longer-term~~
~~funding to provide added liquidity to financial markets.~~
~~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.164 At its March 12~~
~~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 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.~~165~~169 The Fed also announced that it would increase its lending in the repo The Fed also announced that it would increase its lending in the repo
market and its purchases of Treasury securities to provide liquidity. As a result of tight market 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 build 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 up their cash reserves. The price of bank shares ~~fell~~fel , reflecting sales by investors who reportedly , reflecting sales by investors who reportedly
had grown concerned that banks would experience a rise in loan defaults.had grown concerned that banks would experience a rise in loan defaults.~~166~~170 Despite the various actions, the DJIA fel by nearly 10% on March 12, recording the worst one-day drop since 1987. Between February 14 and March 12, the DJIA fel by more than 8,000 points, or 28% of its value. Credit rating agencies began reassessing corporate credit risk, including the risk of firms that had been considered stable.171 On March 13, President Trump declared a national emergency, potential y releasing $50 bil ion in disaster relief funds to state and local governments. The announcement moved financial markets sharply higher, with the DJIA rising 10%.172 Financial markets also reportedly moved higher on expectations the Fed would lower interest rates. House Democrats and President Trump agreed to a $2 tril ion spending package to provide paid sick leave, unemployment insurance, food stamps, action. 168 McAuley, James and Michael Birnbaum, “Europe Blindsided by T rump’s T ravel ~~Despite the various~~

~~161 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.
~~162 Smith, Colby and Brendan Greeley, “Fed Pumps Extra Liquidity Into Overnight Lending Markets,”~~ ~~Financial~~
~~Times, March 9, 2020. https://www.ft.com/content/e8c7b5f0-6200-11ea-a6cd-df28cc3c6a68.~~
~~163 O’Brien, Fergal, “ECB’s Lagarde Warns of 2008-Style Crisis Unless Europe Acts,” Washington Post, March 11,~~
~~2020. https://www.bloomberg.com/news/articles/2020-03-11/ecb-s-lagarde-warns-of-2008-style-crisis-without-urgent-~~
~~action.~~
~~164 McAuley, James and Michael Birnbaum, “Europe Blindsided by Trump’s Travel~~ Restrictions, with Many Seeing Restrictions, with Many Seeing
Political Motive,” Political Motive,” Washington Post, March 12, 2020. https://www.washingtonpost.com/world/europe/europe-, March 12, 2020. https://www.washingtonpost.com/world/europe/europe-
blindsided-by-trumps-travel-restrictions-with-many-seeing-political-motive/2020/03/12/42a279d0-6412-11ea-8a8e-blindsided-by-trumps-travel-restrictions-with-many-seeing-political-motive/2020/03/12/42a279d0-6412-11ea-8a8e-
5c5336b32760_story.html. 5c5336b32760_story.html.
~~165~~169 Arnold, Martin, “ECB Enters Damage-Limitation Mode with Pledge Arnold, Martin, “ECB Enters Damage-Limitation Mode with Pledge of More Action,” of More Action,” Financial Times, March 13, , March 13,
2020. https://www.ft.com/content/f1cbd4f8-650f-11ea-b3f3-fe4680ea68b5. 2020. https://www.ft.com/content/f1cbd4f8-650f-11ea-b3f3-fe4680ea68b5.
~~166~~170 Morris, Stephen, Laura Noonan, Henny Sender, and Olaf Storbeck, “Banks Scramble Morris, Stephen, Laura Noonan, Henny Sender, and Olaf Storbeck, “Banks Scramble as Companies Rushas Companies Rush ~~to Tap~~ to T ap
Back-up Credit Lines,” Back-up Credit Lines,” Financial ~~Times~~Tim es, 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.
~~Congressional Research Service~~

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~~Global Economic Effects of COVID-19~~

~~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 value.~~
~~Credit rating agencies began reassessing corporate credit risk, including the risk of firms that had~~
~~been considered stable.167~~
~~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~~
~~sharply higher, with the DJIA rising 10%.168 Financial markets also reportedly moved higher on~~
~~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,~~
~~support for small businesses, and other measures.169~~171 Edgecliffe-Johnson, Andrew, Peggy Hollinger, Joe Rennison, and Robert Smith, “Will the COVID-19 T rigger a Corporate Debt Crisis?” Financial Tim es, 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 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. 172 Fritz, Angela and Meryl Kornfield, “President T rump Declares a National Emergency, Freeing $50 Billion in Funding,” Washington Post, March 13, 2020. https://www.washingtonpost.com/world/2020/03/13/COVID-19-latest-news. Congressional Research Service 55 Global Economic Effects of COVID-19 support for smal businesses, and other measures.173 The EU indicated that it would relax budget The EU indicated that it would relax budget
rules that restrict deficit spending by EU members. In other actions, the People’s Bank of China rules that restrict deficit spending by EU members. In other actions, the People’s Bank of China
cut its reserve requirements for Chinese banks, cut its reserve requirements for Chinese banks, ~~potentially~~potential y easing borrowing costs for firms and easing borrowing costs for firms and
adding $79 adding $79 ~~billion~~ bil ion in funds to stimulate the Chinese economy; Norway’s central bank reduced its in funds to stimulate the Chinese economy; Norway’s central bank reduced its
key interest rate; the Bank of Japan acquired key interest rate; the Bank of Japan acquired ~~billions~~bil ions of dollars of government securities (thereby of dollars of government securities (thereby
increasing liquidity); and the Reserve Bank of Australia injected nearly $6 increasing liquidity); and the Reserve Bank of Australia injected nearly $6 ~~billion~~ bil ion into its into its
financial system.financial system.~~170~~174 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.”~~171~~175 It also It also
announced an additional $700 announced an additional $700 ~~billion~~ bil ion in asset purchases, including Treasury securities and in asset purchases, including Treasury securities and
mortgage-backed securities, expanded repurchase operations, activated dollar swap lines with mortgage-backed securities, expanded repurchase operations, activated dollar swap lines with
Canada, Japan, Europe, the UK, and Switzerland, opened its discount window to commercial Canada, Japan, Europe, the UK, and Switzerland, opened its discount window to commercial
banks to ease household and business lending, and urged banks to use their capital and liquidity banks to ease household and business lending, and urged banks to use their capital and liquidity
buffers to support lending.buffers to support lending.~~172~~
176 Despite the Fed’s actions the previous day to lower interest rates, interest rates in the U.S. Despite the Fed’s actions the previous day to lower interest rates, interest rates in the U.S.
commercial paper market, where corporations raise cash by commercial paper market, where corporations raise cash by ~~selling~~sel ing short-term debt, rose on short-term debt, rose on
March 16, 2020, to their highest levels since the 2008-2009 financial crisis, prompting investors March 16, 2020, to their highest levels since the 2008-2009 financial crisis, prompting investors
to to ~~call~~ cal on the Fed to intervene.on the Fed to intervene.~~173~~177 The DJIA dropped nearly 3,000 points, or about 13%. Most automobile manufacturers announced major declines in sales and production;178 similarly, most airlines reported they faced major cutbacks in flights and employee layoffs due to diminished economic activity.179 Economic data from China indicated the economy would slow markedly in the first quarter of 2020, potential y greater than that experienced during the global financial crisis.180 The Bank of Japan announced that it would double its purchases of exchange traded funds and the G-7 countries181 issued a joint statement promising “a strongly coordinated 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 that the IMF “stands ready to mobilize its $1 tril ion lending capacity to help its membership.” 173 ~~The DJIA dropped nearly 3,000 points, or about 13%. Most~~

~~167 Edgecliffe-Johnson, Andrew, Peggy Hollinger, Joe Rennison, and Robert Smith, “Will the COVID-19 Trigger a~~
~~Corporate Debt Crisis?” Financial Times, 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~~
~~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.~~
~~168 Fritz, Angela and Meryl Kornfield, “President Trump Declares a National Emergency, Freeing $50 Billion in~~
~~Funding,” Washington Post, March 13, 2020. https://www.washingtonpost.com/world/2020/03/13/COVID-19-latest-~~
~~news.~~
~~169~~ 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/.
~~170~~174 Georgiadis, Georgiadis, Philip, Hudson Lockett, and Leo Lewis,Philip, Hudson Lockett, and Leo Lewis, “European Stocks and US“European Stocks and US Futures SoarFutures Soar After Historic Rout,” After Historic Rout,”
Financial ~~Times~~Tim es, 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.
~~171~~175 Federal Reserve Releases FOMC Statement, Board of Governors of the Federal, Board of Governors of the Federal Reserve System, March 15, 2020. Reserve System, March 15, 2020.
https://www.federalreserve.gov/newsevents/pressreleases/monetary20200315a.htm. https://www.federalreserve.gov/newsevents/pressreleases/monetary20200315a.htm.
~~172~~176 Greeley, Brendan, Colby Smith, Adam Samson, Joe Rennison, Katie Martin, and Jennifer Ablan, Greeley, Brendan, Colby Smith, Adam Samson, Joe Rennison, Katie Martin, and Jennifer Ablan, “Fed Cuts“Fed Cuts Rates to Rates to
Zero as Part of SweepingZero as Part of Sweeping ~~Crisis~~ Crisis Measures,” Measures,” Financial ~~Times~~Tim es, 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.
~~173~~177 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~~Tim es, March 16, 2020. https://www.ft.com/content/34213560-677b-11ea-a3c9-1fe6fedcca75. 178 Campbell, Peter, Joe Miller, and David Keohane, “European Car Plants Close as Industry Crisis Deepens,” Financial Tim es, March 16, 2020. https://www.ft.com/content/dd76d42a-678b-11ea-a3c9-1fe6fedcca75. 179 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,” Financial Tim es, March 16, 2020. https://www.ft.com/content/30a3a26e-674f-11ea-800d-da70cff6e4d3. 180 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. 181 T he G-7 comprises Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States. Congressional Research Service 56 Global Economic Effects of COVID-19 The World Bank also promised an additional $14 bil ion to assist governments and companies address the pandemic.182 Following the drop in equity market indexes the previous day, the Federal Reserve unveiled a ~~, March 16, 2020. https://www.ft.com/content/34213560-677b-11ea-a3c9-1fe6fedcca75.~~
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~~Global Economic Effects of COVID-19~~

~~automobile manufacturers announced major declines in sales and production;174 similarly, most~~
~~airlines reported they faced major cutbacks in flights and employee layoffs due to diminished~~
~~economic activity.175 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~~
~~crisis.176 The Bank of Japan announced that it would double its purchases of exchange traded~~
~~funds and the G-7 countries177 issued a joint statement promising “a strongly coordinated~~
~~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~~
~~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~~
~~address the pandemic.178~~
~~Following the drop in equity market indexes the previous day, the Federal Reserve unveiled a~~
number of facilities on March 17, 2020, in some cases reviving actions it had not taken since the number of facilities on March 17, 2020, in some cases reviving actions it had not taken since the
financial crisis. It announced that it would financial crisis. It announced that it would ~~allow~~al ow the 24 primary dealers in Treasury securities to the 24 primary dealers in Treasury securities to
borrow cash collateralized against some stocks, municipal debt, and higher-rated corporate bonds; borrow cash collateralized against some stocks, municipal debt, and higher-rated corporate bonds;
revive a facility to buy commercial paper; and provide additional funding for the overnight repo revive a facility to buy commercial paper; and provide additional funding for the overnight repo
market.market.~~179~~183 The UK government proposed government-backed loans to support businesses; a three- The UK government proposed government-backed loans to support businesses; 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 €750 ~~billion~~ bil ion (over $820 (over $820 ~~billion)~~ bil ion) in public and private sector bonds to counter the risks posed by in public and private sector bonds to counter the risks posed by
the pandemic crisis (as of May 5, the ECB had purchased about $180 the pandemic crisis (as of May 5, the ECB had purchased about $180 ~~billion~~bil ion in securities). in securities).~~180~~184 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.~~181~~185 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.~~182~~186 Major U.S. banks announced a moratorium on share repurchases, or stock Major U.S. banks announced a moratorium on share repurchases, or stock

~~174 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.
~~175 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,” Financial Times, March 16,~~
~~2020. https://www.ft.com/content/30a3a26e-674f-11ea-800d-da70cff6e4d3.~~
~~176 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.~~
~~177 The G-7 comprises Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States.~~
~~178 Wheatley, Jonathan, “Surging Dollar, Coronavirus and Oil Slump~~ buy-backs, denying equity markets a major source of support and potential y amplifying market volatility.187 During the week, more than 22 central banks in emerging economies, including Brazil, Turkey, and Vietnam, lowered their key interest rates. By March 19, 2020, investors were sel ing sovereign and other bonds as firms and other financial institutions attempted to increase their cash holdings, although actions central banks took during the week appeared to calm financial markets. Compared to previous financial market dislocations in which stock market values declined while bond prices rose, stock and bond values fel at the same time in March 2020 as investors reportedly adopted a “sel everything” mentality to build up cash reserves.188 Senate Republicans introduced the Coronavirus Aid, Relief, and Economic Security Act to provide $2 tril ion in spending to support the U.S. economy. 182 Wheatley, Jonathan, “Surging Dollar, Coronavirus and Oil Slump Hit Emerging Economies,” Hit Emerging Economies,” Financial Times,
March 18, 2020. https://www.ft.com/content/69fc6e2a-69d3-11ea-a3c9-1fe6fedcca75. March 18, 2020. https://www.ft.com/content/69fc6e2a-69d3-11ea-a3c9-1fe6fedcca75.
~~179~~183 Politi, James, Brendan Greeley, Colby Smith, and Joe Rennison, “Fed to Lend Against Stocks and Bonds in Bid Politi, James, Brendan Greeley, Colby Smith, and Joe Rennison, “Fed to Lend Against Stocks and Bonds in Bid to to
StabilizeStabilize Markets,” Markets,” Financial ~~Times~~Tim es, 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.
~~180~~184 “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.
~~181~~185 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.
~~182~~186 Campbell, Peter and Claire Campbell, Peter and Claire Bushey, “Ford, General Motors and Fiat Chrysler AgreeBushey, “Ford, General Motors and Fiat Chrysler Agree Widespread Shutdown,” Financial Tim es, March 18, 2020. https://www.ft.com/content/feae3808-6949-11ea-800d-da70cff6e4d3. 187 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. 188 Stubbington, T ommy and Colby Smith, “Investment Veterans T ry to Get to Grips With ‘Broken’ Markets,” Financial Tim es, March 20, 2020. https://www.ft.com/content/97186440-6aa0-11ea-800d-da70cff6e4d3. Congressional Research Service 57 Global Economic Effects of COVID-19 By the close of trading on March 20, the DJIA index had fal en by 17% from March 13. At the same time, the dollar gained in value against other major currencies, but general y~~Widespread Shutdown,”~~
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~~buy-backs, denying equity markets a major source of support and potentially amplifying market~~
~~volatility.183 During the week, more than 22 central banks in emerging economies, including~~
~~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~~
~~institutions attempted to increase their cash holdings, although actions central banks took during~~
~~the week appeared to calm financial markets. Compared to previous financial market dislocations~~
~~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~~
~~up cash reserves.184 Senate Republicans introduced the Coronavirus Aid, Relief, and Economic~~
~~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~~
~~same time, the dollar gained in value against other major currencies, but generally~~ trended lower trended lower
since May and the price of Brent crude oil dropped close to $20 per barrel on March 20, as since May and the price of Brent crude oil dropped close to $20 per barrel on March 20, as
indicated in indicated in Figure 15. As a result of the steep drop in oil prices, oil producers agreed in April to As a result of the steep drop in oil prices, oil producers agreed in April to
reduce global supply by 10%, or 9.6 reduce global supply by 10%, or 9.6 ~~million~~mil ion barrels per day. Since the low prices recorded in barrels per day. Since the low prices recorded in
April, the price of Brent crude oil April, the price of Brent crude oil ~~generally~~general y moved within a range of $40 to $44 per barrel moved within a range of $40 to $44 per barrel
through late November, when it began edging above $50 per barrel. In trading December 10, the through late November, when it began edging above $50 per barrel. In trading December 10, the
price of Brent crude oil breached the $50 per barrel mark for the first time since March 2020. As price of Brent crude oil breached the $50 per barrel mark for the first time since March 2020. As
energy demand showed some signs of recovering, the cuts in oil production that began in April energy demand showed some signs of recovering, the cuts in oil production that began in April
were trimmed to 7.7 were trimmed to 7.7 ~~million~~mil ion barrels per day and were expected to be trimmed by an additional 2 barrels per day and were expected to be trimmed by an additional 2
~~million~~ mil ion barrels per day in January 2021. On February 23, 2021, the price of Brent crude oil rose barrels per day in January 2021. On February 23, 2021, the price of Brent crude oil rose
above $67 per barrel, the highest price since January 9, 2020. By March 3, 2021, the price of above $67 per barrel, the highest price since January 9, 2020. By March 3, 2021, the price of
Brent crude oil had dropped to $64 per barrel. On March 5, 2021, the Brent crude price of a barrel Brent crude oil had dropped to $64 per barrel. On March 5, 2021, the Brent crude price of a barrel
of oil rose to $69 per barrel, the highest since January 2020, as OPEC and Russia decided against of oil rose to $69 per barrel, the highest since January 2020, as OPEC and Russia decided against
increasing petroleum output.increasing petroleum output.~~185~~189
On December 3, OPEC and Russia agreed to increase oil production by 500,000 barrels per day On December 3, OPEC and Russia agreed to increase oil production by 500,000 barrels per day
starting in January 2021, despite concerns over continued weak global demand.starting in January 2021, despite concerns over continued weak global demand.~~186~~190 According to According to
the International Energy Agency (IEA), expectations about a COVID-19 vaccine tended to boost the International Energy Agency (IEA), expectations about a COVID-19 vaccine tended to boost
markets prices in November and December, although oil market fundamentals—primarily weak markets prices in November and December, although oil market fundamentals—primarily weak
demand in Developed economies, slightly stronger demand in developing economies, and demand in Developed economies, slightly stronger demand in developing economies, and
production increases in Libya, Iraq, and the United States—raised questions about the viabilityproduction increases in Libya, Iraq, and the United States—raised questions about the viability of of
oil price increases.oil price increases.~~187~~191 The IEA also attributed the rise in oil prices since late spring to increased The IEA also attributed the rise in oil prices since late spring to increased
demand in China and India as those economies regained strength. 189 Raval, Anjli, Oil Jumps as OPEC and Allies Decide Against Big Rise in Output, Financial Tim es~~demand in China and India as those economies regained strength.~~

Financial Times, March 18, 2020. https://www.ft.com/content/feae3808-6949-11ea-800d-da70cff6e4d3.
~~183 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.~~
~~184 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.
185 Raval, Anjli, Oil Jumps as OPEC and Allies Decide Against Big Rise in Output, Financial Times, March 5, 2021. , March 5, 2021.
https://www.ft.com/content/771ebf3a-cff0-4ff3-ab9a-0bbd01a33f55. https://www.ft.com/content/771ebf3a-cff0-4ff3-ab9a-0bbd01a33f55.
~~186~~190 Raval, Anjli, OPEC and Russia Raval, Anjli, OPEC and Russia Agree to RaiseAgree to Raise Oil Supply From January, Oil Supply From January, Financial Times, December 3, 2020. , December 3, 2020.
https://www.ft.com/content/18279043-f2ef-40a8-b65d-b68ea0bf21ba. https://www.ft.com/content/18279043-f2ef-40a8-b65d-b68ea0bf21ba.
~~187~~191 Oil Market Report June 2020, International Energy Agency, June 2020. https://www.iea.org/reports/oil-market-, International Energy Agency, June 2020. https://www.iea.org/reports/oil-market-
reportreport -november-2020. -november-2020.
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Figure 15. Brent Crude Oil Price Per Barrel in Dollars
January 9, 2020, through January 9, 2020, through ~~March 5~~May 4, 2021 , 2021

Source: Markets Insider.Markets Insider. Created by CRS. Created by CRS.
The Federal Reserve announced that it would expand a facility to support the municipal bond The 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 market. 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.80% of an employee’s wages and deferring value added taxes by businesses.~~188~~192 The ECB’s The ECB’s
Largarde justified actions by the Bank during the week to provide liquidityLargarde justified actions by the Bank during the week to provide liquidity by arguing that the 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 indexes ~~fell~~ fel again on March 23, 2020, as the Senate debated the parameters of a new spending again on March 23, 2020, as the Senate debated the parameters of a new spending ~~bill~~
bil to support the economy. Oil prices also continued to to support the economy. Oil prices also continued to ~~fall~~ fal as oil producers appeared to be in a as oil producers appeared to be in a
standoff over cuts to production. standoff over cuts to production.
Financial market indexes continued to Financial market indexes continued to ~~fall~~ fal on March 23, 2020, reaching their lowest point since 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(SMCCF) to provide liquidity for outstanding corporate bonds; establishing the Term Asset-for outstanding corporate bonds; establishing the Term Asset-
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.~~189~~193 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

~~188~~ 192 Parker, George Parker, Chris Giles, Parker, George Parker, Chris Giles, and Sebastianand Sebastian Payne, “Sunak Payne, “Sunak ~~Turns~~T urns on Financial Firepower to Help Workers,” on Financial Firepower to Help Workers,”
Financial ~~Times~~Tim es, 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.
~~189~~193 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.
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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.~~190~~
194 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.~~191~~195 U.S. financial markets were buoyed on March 25 and 26 over U.S. financial markets were buoyed on March 25 and 26 over
passage in Congress of a $2.2 passage in Congress of a $2.2 ~~trillion~~tril ion economic stimulus package. 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 agreed to inject $5 ~~trillion~~ tril ion into the global economy and to do “whatever it takes to overcome the into the global economy and to do “whatever it takes to overcome the
pandemic.” Also at the meeting, the OECD offered an updated forecast of the viral infection, pandemic.” Also at the meeting, the OECD offered an updated forecast of the viral infection,
which projected that the global economy could shrink by as much as 2% a month. Nine Eurozone which projected that the global economy could shrink by as much as 2% a month. Nine Eurozone
countries, including France, Italy, and Spain countries, including France, Italy, and Spain ~~called~~cal ed on the ECB to consider issuing on the ECB to consider issuing
“coronabonds,” a common European debt instrument to assist Eurozone countries in fighting “coronabonds,” a common European debt instrument to assist Eurozone countries in fighting
COVID-19.COVID-19.~~192~~196 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.~~193~~
197 Japan announced that it would adopt an emergency spending package worth $238 Japan announced that it would adopt an emergency spending package worth $238 ~~billion~~bil ion, or , or
equivalent to 10% of the country’s annual GDP.equivalent to 10% of the country’s annual GDP.~~194~~198 Despite the various actions, global financial Despite the various actions, global financial
markets turned lower March 27 (the DJIA dropped by 900 points) reportedly over volatility in oil markets turned lower 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.~~195~~
199 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.~~196~~200 In commodity markets, In commodity markets,
Brent crude oil prices continued to Brent crude oil prices continued to ~~fall~~fal , reaching a low of $22.76. Strong global demand for , reaching a low of $22.76. Strong global demand for
dollars continued to put upward pressure on the international value of the dollar. In response, the dollars continued to put upward pressure on the international value of the dollar. In response, the
Federal Reserve introduced a new temporary facility that would work with its swap lines to Federal Reserve introduced a new temporary facility that would work with its swap lines to ~~allow~~al ow
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.~~197~~201 From mid-March to mid-April, U.S. workers’ claims for unemployment benefits reached From mid-March to mid-April, U.S. workers’ claims for unemployment benefits reached
over 17 over 17 ~~million~~ mil ion as firms faced a collapse in demand and requirements for employees to self-as firms faced a collapse in demand and requirements for employees to self-
quarantine caused them to begin furloughing or laying off employees. Financial markets began to quarantine caused them to begin furloughing or laying off employees. Financial markets began to
recover somewhat in early Aprilrecover somewhat in early April in response to the accumulated monetary and fiscal policy in response to the accumulated monetary and fiscal policy

~~190 Gurria,~~ 194 Gurria, Angel, Angel, COVID-19: Joint Actions to Win the War,, Organization for Economic Cooperation and Development, Organization for Economic Cooperation and Development,
March 23, 2020. https://www.oecd.org/coronavirus/#op-ed. March 23, 2020. https://www.oecd.org/coronavirus/#op-ed.
~~191~~195 Arnold, Martin Arnold and Arnold, Martin Arnold and Valentina Romei, “BusinessValentina Romei, “Business Activity Crashes to Record LowActivity Crashes to Record Low in Eurozone,” in Eurozone,” Financial
~~Times~~Tim es, 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.
~~192~~196 Dombrey, Daniel, Guy Dombrey, Daniel, Guy Chazan, and Jim Brunsden,Chazan, and Jim Brunsden, “Nine Eurozone Countries Issue“Nine Eurozone Countries Issue ~~Call~~ Call for ‘Coronabonds,’” for ‘Coronabonds,’”
Financial ~~Times~~Tim es, 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.
~~193~~197 Arnold, Martin and Arnold, Martin and ~~Tommy~~T ommy Stubbington, “ECB Shakes Off Limits on New Stubbington, “ECB Shakes Off Limits on New €750bn Bond-Buying€750bn Bond-Buying Plan,” Plan,” Financial
~~Times~~Tim es, 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.
~~194~~198 Kajimoto, Kajimoto, ~~Tetsushi~~T etsushi, Izumi Nakagawa,, Izumi Nakagawa, “Japan Plans Huge“Japan Plans Huge ~~Stimulus~~ Stimulus Package to Cushion BlowPackage to Cushion Blow from Coronavirus,” from Coronavirus,”
Reuters, March 27, 2020, https://www.reuters.com/article/us-health-coronavirus-japan-stimulus/japan-plans-huge-, March 27, 2020, https://www.reuters.com/article/us-health-coronavirus-japan-stimulus/japan-plans-huge-
stimulus-package-to-cushion-blow-from-coronavirus-idUSKBN21E0UW. stimulus-package-to-cushion-blow-from-coronavirus-idUSKBN21E0UW.
~~195~~199 Georgiadis, Georgiadis, Philip, Hudson Lockett, and Leo Lewis,Philip, Hudson Lockett, and Leo Lewis, “Global Stocks Falter After “Global Stocks Falter After ~~Two~~T wo Days of Big Days of Big Gains,”Gains,” Financial
~~Times~~Tim es, 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.
~~196~~200 Wheatley, Jonathan, “Emerging Market Central Banks Embark on Radical Stimulus Wheatley, Jonathan, “Emerging Market Central Banks Embark on Radical Stimulus Policies,” Policies,” Financial Times, ,
March 30, 2020. https://www.ft.com/content/70398316-3fd5-4428-88ab-6f898ee42fd5. March 30, 2020. https://www.ft.com/content/70398316-3fd5-4428-88ab-6f898ee42fd5.
~~197~~201 Politi, James, Brendan Greeley, and Colby Politi, James, Brendan Greeley, and Colby Smith, “Fed Sets Up Scheme to Meet Booming Foreign Demand for Smith, “Fed Sets Up Scheme to Meet Booming Foreign Demand for
Dollars,” Dollars,” Financial ~~Times~~Tim es, 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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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 The Federal Reserve announced on April 8 that it was establishing a facility to fund ~~small~~
smal businesses through the Paycheck Protection Program. Japan also announced that it was preparing businesses through the Paycheck Protection Program. Japan also announced that it was preparing
to declare areas around Tokyo to be in a state of emergency and that it would adopt a $989 to declare areas around Tokyo to be in a state of emergency and that it would adopt a $989 ~~billion~~
bil ion funding package.funding package.~~198~~
202 On April On April 9, OPEC and Russia agreed to cut oil production by 10 9, OPEC and Russia agreed to cut oil production by 10 ~~million~~ mil ion barrels per day.barrels per day.~~199~~203 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.~~200~~204 They also announced They also announced
an agreement to freeze government loan payments until the end of the year to help lowan agreement to freeze government loan payments until the end of the year to help low -income -income
developing countries address the pandemic and asked international financial institutions to do developing countries address the pandemic and asked international financial institutions to do
likewise.likewise.~~201~~205 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.~~202~~206 Eurozone finance ministers announced a Eurozone finance ministers announced a
€500 €500 ~~billion~~ bil ion (about $550 (about $550 ~~billion)~~ bil ion) emergency spending package to support governments, emergency spending package to support governments,
businesses, and workers. Reportedly, the measure businesses, and workers. Reportedly, the measure ~~will~~ wil provide funds to the European Stability provide funds to the European Stability
Mechanism, the European Investment Bank, and for unemployment insurance.Mechanism, the European Investment Bank, and for unemployment insurance.~~203~~
207 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 bil ion, ~~$100 billion,~~ in response to requests from more than 100 countries for assistance.in response to requests from more than 100 countries for assistance.~~204~~208 The Bank of The Bank of
England announced that it would take the unprecedented move of temporarily directly financing England announced that it would take the unprecedented move of temporarily directly financing
UK government emergency spending needs through monetary measures rather than through the UK government emergency spending needs through monetary measures rather than through the
typical method of issuing securities to fight the effects of COVID-19.typical method of issuing securities to fight the effects of COVID-19.~~205~~209 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.~~206~~

~~198 Takeo~~210 202 T akeo, Yuko and Yoshiaki Nohara, “Japan’s Virus, Yuko and Yoshiaki Nohara, “Japan’s Virus ~~Stimulus~~ Stimulus Package to Come in Package to Come in ~~Two~~T wo Phases,” Phases,” Bloomberg, April 5, , April 5,
2020. https://www.bloomberg.com/news/articles/2020-04-06/japan-s-virus-stimulus-package-to-come-in-two-phases-2020. https://www.bloomberg.com/news/articles/2020-04-06/japan-s-virus-stimulus-package-to-come-in-two-phases-
documents-k8nuj552. documents-k8nuj552.
~~199~~203 Sheppard, David, Anjli Raval, Derek Brower, Sheppard, David, Anjli Raval, Derek Brower, and Henry Foy, “G20 Ministers Meet to Endorse OPEC-Russiaand Henry Foy, “G20 Ministers Meet to Endorse OPEC-Russia Deal Deal
to Slashto Slash Oil Production,” Oil Production,” Financial ~~Times~~Tim es, 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.
~~200~~204 Sheppard, David, Anjli Raval, Derek Brower. Sheppard, David, Anjli Raval, Derek Brower. and Henry Foy, G20 Backs Largest Oil Supplyand Henry Foy, G20 Backs Largest Oil Supply Agreement in History, Agreement in History,
Financial ~~Times~~Tim es, 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.
~~201~~205 England, Andrew, England, Andrew, Jonathan Wheatley and James Politi, G20 AgreesJonathan Wheatley and James Politi, G20 Agrees Debt ReliefDebt Relief for Low Income Nations, for Low Income Nations, Financial
~~Times~~Tim es, 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.
~~202~~206 Politi, James and Jonathan Wheatley, G7 Countries Back Debt Relief Politi, James and Jonathan Wheatley, G7 Countries Back Debt Relief For Poorest Nations, For Poorest Nations, Financial Times, April , April
14, 2020. https://www.ft.com/content/c384ed59-1ca3-476f-9b89-eaf5cf31e42c. 14, 2020. https://www.ft.com/content/c384ed59-1ca3-476f-9b89-eaf5cf31e42c.
~~203~~207 Fleming, Sam Fleming, Sam and Mehreen Khan, “Eurozone Countries Strike Emergency Deal on Coronavirus Rescue,”and Mehreen Khan, “Eurozone Countries Strike Emergency Deal on Coronavirus Rescue,” Financial
~~Times~~Tim es, 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.
~~204~~208 Politi, James, “IMF Boosts Emergency Lending Politi, James, “IMF Boosts Emergency Lending Capacity to $100bn,” Capacity to $100bn,” Financial Times, April 9, 2020. , April 9, 2020.
https://www.ft.com/content/e46faadc-456b-4cf8-a2fd-2017702747ab. https://www.ft.com/content/e46faadc-456b-4cf8-a2fd-2017702747ab.
~~205~~209 Giles, Giles, Chris and Philip Georgiadis,Chris and Philip Georgiadis, “Bank of England to Directly Finance UK Government’s Extra Spending,” “Bank of England to Directly Finance UK Government’s Extra Spending,”
Financial ~~Times~~Tim es, 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.
~~206~~210 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.
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Federal Reserve Chairman Jerome Federal Reserve Chairman Jerome ~~Powell~~Powel , stating that the U.S. economy was deteriorating “with , stating that the U.S. economy was deteriorating “with
alarming speed,” announced on April 10 that the Fed would provide an additional $2.3 alarming speed,” announced on April 10 that the Fed would provide an additional $2.3 ~~trillion~~tril ion in in
loans, including a new financial facility to assist firms by acquiring shares in exchange traded loans, including a new financial facility to assist firms by acquiring shares in exchange traded
funds that own the debt of lower-rated, riskier firms that are among the most exposed to funds that own the debt of lower-rated, riskier firms that are among the most exposed to
deteriorating economic conditions associated with COVID-19 and low oil prices.deteriorating economic conditions associated with COVID-19 and low oil prices.~~207~~211 On April 16, On April 16,
the U.S. Labor Department reported that 5.2 the U.S. Labor Department reported that 5.2 ~~million~~mil ion Americans filed for unemployment insurance Americans filed for unemployment insurance
during the previous week, raising the total claims since mid-March to over 22 during the previous week, raising the total claims since mid-March to over 22 ~~million.208~~mil ion.212
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.~~209~~
213 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.~~210~~214 The price of futures contracts for oil delivery in May 2020 for the U.S. West Texas The price of futures contracts for oil delivery in May 2020 for the U.S. West Texas
Intermediate (WTI) Intermediate (WTI) ~~fell~~ fel to $18 per barrel, the lowest it had been since 2002, reportedly reflecting to $18 per barrel, the lowest it had been since 2002, reportedly reflecting
rising inventories and low global demand.rising inventories and low global demand.~~211~~215 Leaders of emerging economies in Latin America Leaders of emerging economies in Latin America
and Africa argued that the G-20 and Africa argued that the G-20 ~~call~~ cal for suspension of interest payments for suspension of interest payments ~~fell~~ fel short of what is short of what is
needed. National leaders from Columbia, Brazil,needed. National leaders from Columbia, Brazil, Mexico, and Chile encouraged the World Bank, 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.”~~212~~216
The price of oil The price of oil ~~fell~~ fel to its lowest level in two decades on April 19, reportedly reflecting a to its lowest level in two decades on April 19, reportedly reflecting a
significant drop in global demand for energy and rising inventories.significant drop in global demand for energy and rising inventories.~~213~~217 Some Eurozone members Some Eurozone members
reportedly argued for the ECB to create a Eurozone “bad bank” to remove reportedly argued for the ECB to create a Eurozone “bad bank” to remove ~~billions~~ bil ions of euros in 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 a ~~potentially~~potential y critical time when banks could see an increase in nonperforming loans. critical time when banks could see an increase in nonperforming loans.~~214~~218 The World The World
Bank confirmed that its “pandemic bonds” would pay out $133 Bank confirmed that its “pandemic bonds” would pay out $133 ~~billion~~ bil ion to the poorest countries to the poorest countries
affected by the pandemic.affected by the pandemic.~~215~~

~~207~~219 211 Rennison, Joe, Robin Wigglesworth, and Colby Rennison, Joe, Robin Wigglesworth, and Colby Smith, “Federal Reserve Enters New Smith, “Federal Reserve Enters New ~~Territory~~T erritory with Support for with Support for
Risky Debt,” Risky Debt,” Financial ~~Times~~Tim es, April 10, 2020. https://www.ft.com/content/c0b78bc9-0ea8-461c-a5a2-89067ca94ea4. , April 10, 2020. https://www.ft.com/content/c0b78bc9-0ea8-461c-a5a2-89067ca94ea4.
Heather Long, “Heather Long, “ Fed Chair Powell SaysFed Chair Powell Says U.S.U.S. Economy Deteriorating ‘With Alarming Speed,’” Economy Deteriorating ‘With Alarming Speed,’” Washington Post, April , April
9, 2020. https://www.washingtonpost.com/business/2020/04/09/federal-reserve-unveils-over-2-trillion-new-lending-9, 2020. https://www.washingtonpost.com/business/2020/04/09/federal-reserve-unveils-over-2-trillion-new-lending-
small-businesses-city-governments-big-firms/. small-businesses-city-governments-big-firms/.
~~208~~212 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.
~~209~~213 Hale, Hale, ~~Thomas~~T homas, Xinning Liu, and, Xinning Liu, and Yuan Yang, China’s Economy Shrinks for First Yuan Yang, China’s Economy Shrinks for First ~~Time~~T ime in Four in Four ~~Decades,~~ Deca des, Financial
~~Times~~Tim es, 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.
~~210~~214 Smith, Colby, Myles McCormick, Smith, Colby, Myles McCormick, ~~Tommy~~T ommy Stubbington, and Stubbington, and Hudson Lockett, US Stocks Extend Rally With Central Hudson Lockett, US Stocks Extend Rally With Central
Bank Safety Net, Bank Safety Net, Financial ~~Times~~Tim es, 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.
~~211~~215 Sheppard, David, US Sheppard, David, US ~~Crude Tumbles~~ Crude T umbles to 18-year Low as Supply to 18-year Low as Supply Overwhelms Demand, Overwhelms Demand, Financial Times, April 17, , April 17,
2020. https://www.ft.com/content/d0a0cfc3-765c-4b55-ada7-11e0d378d406. 2020. https://www.ft.com/content/d0a0cfc3-765c-4b55-ada7-11e0d378d406.
~~212~~216 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~~Tim es, 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.
~~213~~217 Lockett, Hudson Lockett and David Sheppard, US Lockett, Hudson Lockett and David Sheppard, US ~~Oil~~ Oil Price Plunges to 20Price Plunges to 20 -year Low as Coronavirus Hits Demand, -year Low as Coronavirus Hits Demand,
Financial ~~Times~~Tim es, 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.
~~214~~218 Arnold, Martin and Javier Espinoza, ECB Arnold, Martin and Javier Espinoza, ECB Pushes for Eurozone BadPushes for Eurozone Bad Bank to Clean up SouredBank to Clean up Soured Loans, Loans, Financial
~~Times~~Tim es, 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.
~~215~~219 Gross, Gross, Anna, World Bank Pandemic BondsAnna, World Bank Pandemic Bonds to Pay $133m to Poorest Virus-hit Nations, to Pay $133m to Poorest Virus-hit Nations, Financial Times, April 19, , April 19,
2020. https://www.ft.com/content/c8556c9f-72f7-48b4-91bf-c9e32ddab6ff. 2020. https://www.ft.com/content/c8556c9f-72f7-48b4-91bf-c9e32ddab6ff.
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On April On April 21, Agricultural Ministers of the G-20 countries released a joint statement that supported 21, Agricultural Ministers of the G-20 countries released a joint statement that supported
measures to “ensure the health, safety, welfare, and mobility of workers in agriculture and measures to “ensure the health, safety, welfare, and mobility of workers in agriculture and
throughout the food supply chain.” The joint statement also indicated that the G-20 countries throughout the food supply chain.” The joint statement also indicated that the G-20 countries
would adopt measures that are “targeted, proportionate, transparent, and temporary, and that they would adopt measures that are “targeted, proportionate, transparent, and temporary, and that they
do not create unnecessary barriers to trade or disruption to global food supply chains.” The do not create unnecessary barriers to trade or disruption to global food supply chains.” The
statement also indicated that the G-20 would, “guard against any unjustified restrictive measures statement also indicated that the G-20 would, “guard against any unjustified restrictive measures
that could lead to excessive food price volatility in international markets and threaten the food that could lead to excessive food price volatility in international markets and threaten the food
security and nutrition of large proportions of the world population, security and nutrition of large proportions of the world population, ~~especially~~especial y the most vulnerable the most vulnerable
~~living~~ living in environments of low food security.”in environments of low food security.”~~216~~220
On April On April 23, the House passed H.R. 266 (P.L. 116-139), the Paycheck Protection Program and 23, the House passed H.R. 266 (P.L. 116-139), the Paycheck Protection Program and
Health Care Enhancement Act, following similar actions by the Senate the previous day. The Health Care Enhancement Act, following similar actions by the Senate the previous day. The
measure provided $484 measure provided $484 ~~billion for small~~ bil ion for smal business loans, health care providers, and COVID-19 business loans, health care providers, and COVID-19
testing. The U.S. Labor Department reported that 4.4 testing. The U.S. Labor Department reported that 4.4 ~~million~~mil ion Americans filed for unemployment Americans filed for unemployment
insurance in the previous week, raising the total that have applied to over 26 insurance in the previous week, raising the total that have applied to over 26 ~~million.217~~mil ion.221 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.~~218~~222 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.~~219~~223 The Saudi Presidency of the G-20 The Saudi Presidency of the G-20 ~~called~~cal ed on on
international organizations on April 24 to fund an emergency response to the pandemic. The Bank international organizations on April 24 to fund an emergency response to the pandemic. The Bank
of Japan announced on April 27 that it would purchase unlimited amounts of government bonds of Japan announced on April 27 that it would purchase unlimited amounts of government bonds
and quadruple its purchases of corporate debt to keep interest rates low and stimulate the and quadruple its purchases of corporate debt to keep interest rates low and stimulate the
Japanese economy.Japanese economy.~~220~~224
At its April 29 scheduled meeting, the U.S. Federal Open Market Committee left its main interest At its April 29 scheduled meeting, the U.S. Federal Open Market Committee left its main interest
rates unchanged, but reiterated its commitment to use “its full range of tools to support the U.S. rates unchanged, but reiterated its commitment to use “its full range of tools to support the U.S.
economy.” The policy statement concluded that, “The ongoing public health crisis economy.” The policy statement concluded that, “The ongoing public health crisis ~~will~~ wil weigh weigh
heavily on economic activity, employment, and inflation in the near term, and poses considerable heavily on economic activity, employment, and inflation in the near term, and poses considerable
risks to the economic outlook over the medium term.”risks to the economic outlook over the medium term.”~~221~~225 The Federal Reserve also announced a The Federal Reserve also announced a
change in its eligibilitychange in its eligibility requirements for a $500 requirements for a $500 ~~billion~~bil ion lending program for municipalities. The lending program for municipalities. The
statement followed the release of the preliminary estimate of U.S. first quarter GDP, which statement followed the release of the preliminary estimate of U.S. first quarter GDP, which
indicated that the economy had contracted by an annualized rate of 4.8% (revised to 5.0%).indicated that the economy had contracted by an annualized rate of 4.8% (revised to 5.0%).~~222~~
226 On April On April 30, the Department of Labor released its weekly data on applications for unemployment 30, the Department of Labor released its weekly data on applications for unemployment
insurance, which indicated that an additional 3.8 insurance, which indicated that an additional 3.8 ~~million~~ mil ion people had filed for unemployment people had filed for unemployment

~~216~~ 220 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.
~~217~~221 Unemployment Insurance Weekly Claims, April 23, 2020. https://www.dol.gov/ui/data.pdf. , April 23, 2020. https://www.dol.gov/ui/data.pdf.
~~218~~222 Arnold, Martin and Valentina Romei, European Business Arnold, Martin and Valentina Romei, European Business Activity Crashes Under Coronavirus Lockdowns, Activity Crashes Under Coronavirus Lockdowns,
Financial ~~Times~~Tim es, 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.
~~219~~223 Giles, Giles, Chris, and Chris, and ~~Tommy~~T ommy Stubbington, UK Stubbington, UK ~~Treasury~~T reasury to Quadruple to Quadruple ~~Borrowing~~ Borrowing to £180bn Over Next Quarter, to £180bn Over Next Quarter,
Financial ~~Times~~Tim es, 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.
~~220~~224 Harding, Robin, Bank of Japan Steps up Coronavirus Stimulus Harding, Robin, Bank of Japan Steps up Coronavirus Stimulus With Bond-buyingWith Bond-buying Pledge, Pledge, Financial Times, April , April
27, 2020. https://www.ft.com/content/7ba5c507-df9e-4107-87eb-73afa2c13e91. 27, 2020. https://www.ft.com/content/7ba5c507-df9e-4107-87eb-73afa2c13e91.
~~221~~225 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.
~~222~~226 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/.
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insurance during the week, raising the total number who had applied to 30 insurance during the week, raising the total number who had applied to 30 ~~million.223~~mil ion.227 The Federal The Federal
Reserve also announced an expansion in its medium-size business loan program by Reserve also announced an expansion in its medium-size business loan program by ~~allowing~~al owing
firms with up to 15,000 employees or with revenues up to $5 firms with up to 15,000 employees or with revenues up to $5 ~~billion~~bil ion to access a new $600 to access a new $600 ~~billion~~bil ion
program. In addition, the Fed lowered the minimum loan amount for program. In addition, the Fed lowered the minimum loan amount for ~~small~~ smal businesses and businesses and
announced a loan program to assist riskier businesses.announced a loan program to assist riskier businesses.~~224~~228 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.”~~225~~229 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.~~226~~230 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~~ tril ion spending bil to support state and local governments.to support state and local governments.~~227~~231 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.~~228~~232
May 2020
On May 5, Germany’s Constitutional court issued a ruling that could prevent the German central On May 5, Germany’s Constitutional court issued a ruling that could prevent the German central
bank, the Bundesbank, from making additional bond purchases under the Pandemic Emergency bank, the Bundesbank, from making additional bond purchases under the Pandemic Emergency
Purchase Program (PEPP). The ECB’s program is intended to ease borrowing costs across the Purchase Program (PEPP). The ECB’s program is intended to ease borrowing costs across the
Eurozone to stimulate economic growth. Eurozone to stimulate economic growth.
The U.S. Census Bureau reported on May 5 that U.S. exports and imports The U.S. Census Bureau reported on May 5 that U.S. exports and imports ~~fell~~ fel in March; exports in March; exports
~~fell~~ fel by a greater amount than imports, thereby increasing the monthly U.S. goods and services by a greater amount than imports, thereby increasing the monthly U.S. goods and services
trade deficit. The trade balance for March was -$44.5 trade deficit. The trade balance for March was -$44.5 ~~billion~~bil ion, an increase of about $4.6 , an increase of about $4.6 ~~billion~~bil ion
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 assuming the containment measures can be lifted ~~gradually~~gradual y, the viral effects remain contained, , the viral effects remain contained,
and that the fiscal and monetary measures implemented by the EU members are effective in and that the fiscal and monetary measures implemented by the EU members are effective in
blunting the negative effects on economies.blunting the negative effects on economies.~~229~~233 On May 7, the Labor Department announced that On May 7, the Labor Department announced that

~~223~~ 227 Unemployment Insurance Weekly Claims, April 30, 2020. https://www.dol.gov/ui/data.pdf. , April 30, 2020. https://www.dol.gov/ui/data.pdf.
~~224~~228 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~~Tim es, 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.
~~225~~229 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.
~~226~~230 Arnold, Martin and Arnold, Martin and ~~Tommy~~T ommy Stubbington, ECB Stubbington, ECB Launches Fresh Push to Lend to Banks at UltraLaunches Fresh Push to Lend to Banks at Ultra -low Rates, -low Rates, Financial
~~Times~~Tim es, 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.
~~227~~231 Werner, Erica, Pelosi Points to $1 Werner, Erica, Pelosi Points to $1 ~~Trillion~~T rillion Need for State and Local Governments in Next Coronavirus Bill, Need for State and Local Governments in Next Coronavirus Bill,
Washington Post, April 30, 2020. https://www.washingtonpost.com/us-policy/2020/04/30/congress-coronavirus-, April 30, 2020. https://www.washingtonpost.com/us-policy/2020/04/30/congress-coronavirus-
economy/. economy/.
~~228~~232 Henderson, Richard Henderson, Richard Henderson, Robin Wigglesworth,Henderson, Robin Wigglesworth, and Katie Martin, U.S. Stocks Close Out Best Month Since and Katie Martin, U.S. Stocks Close Out Best Month Since
1987 in Global1987 in Global Rebound,Rebound, Financial ~~Times~~Tim es, 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.
~~229~~233 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.
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2.7 2.7 ~~million~~mil ion Americans had filed for unemployment insurance during the week, raising the total Americans had filed for unemployment insurance during the week, raising the total
that had filed over the previous seven weeks to 33 that had filed over the previous seven weeks to 33 ~~million.230~~mil ion.234
On May 8, the U.S. Department of Labor announced that 20.5 On May 8, the U.S. Department of Labor announced that 20.5 ~~million~~mil ion Americans had lost their Americans had lost their
jobs in April, pushing the national unemployment rate to 14.5%. Despite the rise in the jobs in April, pushing the national unemployment rate to 14.5%. Despite the rise in the
unemployment rate, the DJIA rose by 2.0%, reportedly based on optimism that the monetary unemployment rate, the DJIA rose by 2.0%, reportedly based on optimism that the monetary
policy actions the Federal Reserve, the ECB, and the Bank of Japan 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.~~231~~235
On May 12, House Democrats introduced H.R. 6800, the Heroes Act, to provide a $3 On May 12, House Democrats introduced H.R. 6800, the Heroes Act, to provide a $3 ~~trillion~~tril ion
supplemental spending supplemental spending ~~bill~~ bil for additional financial resources to state and local governments and for additional financial resources to state and local governments and
for other purposes. The measure passed the House on May 15 and was sent to the Senate for for other purposes. The measure passed the House on May 15 and was sent to the Senate for
consideration. On May 13, the UKconsideration. On May 13, the UK Office of National Statistics reported that UK GDP contracted Office of National Statistics reported that UK GDP contracted
by 2.0% in the first quarter, the largest decline in the UK’s GDP since 2008 with by 2.0% in the first quarter, the largest decline in the UK’s GDP since 2008 with ~~all~~ al major major
economic sector affected.economic sector affected.~~232~~236 On May 14, the U.S. Department of Labor announced that an On May 14, the U.S. Department of Labor announced that an
additionaladditional ~~2.4 million~~ 2.4 mil ion Americans had filed for unemployment insurance during the previous Americans had filed for unemployment insurance during the previous
week, increasing the total number filingweek, increasing the total number filing for unemployment insurance over the previous eight for unemployment insurance over the previous eight
weeks to 36 weeks to 36 ~~million.233~~mil ion.237
On May 18, German On May 18, German ~~Chancellor~~Chancel or Angela Merkel and French President Emmanuel Macron Angela Merkel and French President Emmanuel Macron
proposed a €500 proposed a €500 ~~billion~~ bil ion (about $620 (about $620 ~~billion~~bil ion) EU recovery fund in an effort to gain a coordinated ) EU recovery fund in an effort to gain a coordinated
EU fiscal response to the pandemic.EU fiscal response to the pandemic.~~234~~238
The Department of Labor announced on May 21 that an additional The Department of Labor announced on May 21 that an additional ~~2.4 million~~ 2.4 mil ion Americans had Americans had
filed for Unemployment Insurance, raising the total to 38.4 filed for Unemployment Insurance, raising the total to 38.4 ~~million~~mil ion over the previous nine over the previous nine
weeks.weeks.~~235~~239
On May 27, European Commission President Ursula von der Leyen proposed a €750 On May 27, European Commission President Ursula von der Leyen proposed a €750 ~~billion~~bil ion
(about $825 (about $825 ~~billion~~bil ion) coronavirus recovery plan to provide loans and grants to the hardest hit EU ) coronavirus recovery plan to provide loans and grants to the hardest hit EU
economies and changes to the EU budget. The Japanese Cabinet proposed a second supplemental economies and changes to the EU budget. The Japanese Cabinet proposed a second supplemental
appropriation measure that includes $296 appropriation measure that includes $296 ~~billion~~bil ion in spending and a total value of about $1.1 in spending and a total value of about $1.1
~~trillion~~ tril ion in loans and guarantees, funded through new bonds.in loans and guarantees, funded through new bonds.~~236~~240
On May 28, the Department of Labor announced that an additional 1.9 On May 28, the Department of Labor announced that an additional 1.9 ~~million~~ mil ion (revised) (revised)
Americans filedAmericans filed for Unemployment Insurance, raising the ten-week total to 42.6 for Unemployment Insurance, raising the ten-week total to 42.6 ~~million.237~~mil ion.241
June 2020
On June 4, the U.S. Census Bureau reported that U.S. imports On June 4, the U.S. Census Bureau reported that U.S. imports ~~fell~~ fel by 13.7% and exports by 13.7% and exports ~~fell~~ fel by 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

~~230~~ 234 Unemployment Insurance Weekly Claims, May 5, 2020. https://www.dol.gov/ui/data.pdf. , May 5, 2020. https://www.dol.gov/ui/data.pdf.
~~231~~235 Platt, Eric, Colby Smith, Adam Platt, Eric, Colby Smith, Adam Samson, and HudsonSamson, and Hudson Lockett, Wall Street closes higher despite dire USLockett, Wall Street closes higher despite dire US ~~jobs~~ jobs data, data,
Financial ~~Times~~Tim es, 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.
~~232~~236 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.
~~233~~237 Unemployment Insurance Weekly Claims, May 14, 2020. https://www.dol.gov/ui/data.pdf. , May 14, 2020. https://www.dol.gov/ui/data.pdf.
~~234~~238 Fleming, Sam, Fleming, Sam, Victor Mallet, and GuyVictor Mallet, and Guy Chazan, Germany and France Unite in CallChazan, Germany and France Unite in Call for €500 Billion Europe for €500 Billion Europe
Recovery Fund,Recovery Fund, Financial ~~Times~~Tim es, 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.
~~235~~239 Unemployment Insurance Weekly Claims, May 21, 2020. https://www.dol.gov/ui/data.pdf. , May 21, 2020. https://www.dol.gov/ui/data.pdf.
~~236~~240 Harding, Robin, Japan’s Cabinet Approves Extra $1.1 Harding, Robin, Japan’s Cabinet Approves Extra $1.1 ~~Trillion~~T rillion Budget to Counter Recession, Budget to Counter Recession, Financial Times, May , May
27, 2020. https://www.ft.com/content/ce7f3564-c997-339c-ad3d-c6d092fb7f1e. 27, 2020. https://www.ft.com/content/ce7f3564-c997-339c-ad3d-c6d092fb7f1e.
~~237~~241 Unemployment Insurance Weekly Claims, May 29, 2020. https://www.dol.gov/ui/data.pdf. , May 29, 2020. https://www.dol.gov/ui/data.pdf.
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in U.S. trade since the global financial crisis. in U.S. trade since the global financial crisis.~~238~~242 In addition, the Labor Department announced that In addition, the Labor Department announced that
an additionalan additional ~~1.9 million~~ 1.9 mil ion Americans filed for unemployment insurance, increasing the 11-week Americans filed for unemployment insurance, increasing the 11-week
total to 44 total to 44 ~~million.239~~ mil ion.243 The European Central Bank announced that it would double to $1.5 The European Central Bank announced that it would double to $1.5 ~~trillion~~tril ion
its Pandemic Emergency Purchase Program to stimulate the European economy.its Pandemic Emergency Purchase Program to stimulate the European economy.~~240~~244 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.~~241~~245 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.~~242~~246
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.~~243~~247 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.~~244~~248
On June 11, the DJIA On June 11, the DJIA ~~fell~~ fel by more than 1,800 points, or 6.9% reportedly on fears that a spike in 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.~~245~~249 The Labor Department reported that an additional 1.57 The Labor Department reported that an additional 1.57 ~~million~~mil ion Americans filed for 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 44 ~~million~~ mil ion Americans.Americans.~~246~~250 According to a report by Eurostat on June 12, industrial production in According to a report by Eurostat on June 12, industrial production in
the Eurozone the Eurozone ~~fell~~ fel by 17.1% in April,by 17.1% in April, reportedly the largest decline in production recorded since 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.~~247~~251 The Federal Reserve released its semi-annual The Federal Reserve released its semi-annual
Monetary Policy Report..~~248~~252
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.~~249~~

~~238~~253 242 Monthly U.S. International Trade in Goods and Services in April 2020 , U.S. Census, U.S. Census Bureau,Bureau, June 4, 2020. June 4, 2020.
https://www.census.gov/foreign-trade/data/index.html. https://www.census.gov/foreign-trade/data/index.html.
~~239~~243 Unemployment Insurance Weekly Claims, June, June 4, 2020. https://www.dol.gov/ui/data.pdf. 4, 2020. https://www.dol.gov/ui/data.pdf.
~~240~~244 Arnold, Martin, ECB Boosts Bond-Buying Arnold, Martin, ECB Boosts Bond-Buying ~~Stimulus~~ Stimulus Package by €600, 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.
~~241 Telford, Taylor, and Thomas~~245 T elford, T aylor, and T homas Heath, Dow Soars 1,000 Points as Wall Street Closes Heath, Dow Soars 1,000 Points as Wall Street Closes in on Prein on Pre -Pandemic Levels-Pandemic Levels,
Washington Post, June, June 5, 2020. https://www.washingtonpost.com/business/2020/06/05/stocks-market-today-5, 2020. https://www.washingtonpost.com/business/2020/06/05/stocks-market-today-
coronavirus-economy/. coronavirus-economy/.
~~242~~246 Sheppard, David, Anjli Raval, and Derek Brower, Sheppard, David, Anjli Raval, and Derek Brower, OPEC and RussiaOPEC and Russia Agree to Extend Record Oil SupplyAgree to Extend Record Oil Supply Cuts, Cuts,
Financial ~~Times~~Tim es, 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.
~~243~~247 Dempsey, Harry, Bryce Elder, and Dempsey, Harry, Bryce Elder, and Hudson Lockett, U.S. Stocks Erase Losses for the Year, Hudson Lockett, U.S. Stocks Erase Losses for the Year, Financial Times, June June 8, 8,
2020. https://www.ft.com/content/1dfaeb58-6d65-4f17-b710-b1ebc6622649. 2020. https://www.ft.com/content/1dfaeb58-6d65-4f17-b710-b1ebc6622649.
~~244~~248 Politi, James, Emerging Economies Forecast to Shrink for First Politi, James, Emerging Economies Forecast to Shrink for First ~~Time~~T ime in 60 Years, 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.
~~245~~249 Seigel, Seigel, Rachel and Rachel and ~~Thomas~~T homas Heath, Dow Slides Heath, Dow Slides More More ~~Than~~T han 1,800 Points on Fears of Coronavirus Resurgence, 1,800 Points on Fears of Coronavirus Resurgence, More More
Economic Pain, Economic Pain, Washington Post, June, June 11, 2020. https://www.washingtonpost.com/business/2020/06/11/markets-11, 2020. https://www.washingtonpost.com/business/2020/06/11/markets-
today-fed-coronavirus/. today-fed-coronavirus/.
~~246~~250 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.
~~247~~251 Arnold, Martin, Eurozone Industrial Production Falls by Record Arnold, Martin, Eurozone Industrial Production Falls by Record 17.1% in April, 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.
~~248~~252 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
~~249~~253 Wheatley, Jonathan, Developing Economies Borrow More Despite Debt Relief Wheatley, Jonathan, Developing Economies Borrow More Despite Debt Relief Initiative, Initiative, Financial Times, June 15, June 15,
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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~~ Powel stressed that although there were positive signs that U.S. economic growth was beginning 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.~~250~~254
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 increased its coronavirus lending facility to $1 ~~trillion.251~~tril ion.255 The U.S. Energy Information The U.S. Energy Information
Administration reported that U.S. crude oil production Administration reported that U.S. crude oil production ~~fell~~ fel to its lowest point since March 2018, 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 encouraging some U.S. producers to consider restarting ~~wells~~wel s that were closed when prices that were closed when prices
dropped to around $20 per barrel.dropped to around $20 per barrel.~~252~~
256 On June 18, the Department of Labor announced that an additional 1.54 On June 18, the Department of Labor announced that an additional 1.54 ~~million~~mil ion Americans filed Americans filed
for unemployment during the week, raising the 13-week total to 45.7 for unemployment during the week, raising the 13-week total to 45.7 ~~million~~mil ion Americans. Americans.~~253~~
257 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%.~~254~~258
On June 25, the ECB On June 25, the ECB and the German government announced they had reached a tentative accord 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.~~255~~259 Elsewhere, the Labor Department Elsewhere, the Labor Department
reported that an additional 1.48 reported that an additional 1.48 ~~million~~mil ion Americans filed for unemployment insurance, raising the Americans filed for unemployment insurance, raising the
14-week total from mid-March to over 47 14-week total from mid-March to over 47 ~~million.256~~mil ion.260 Between June 1 and June 26, the DJIA Between June 1 and June 26, the DJIA
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 nearly the same as it was in early March 2020. On June 24 and 26, the DJIA index ~~fell~~ fel by more 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.~~257~~261 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 ~~scenarios258~~scenarios262 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.~~259~~263 The Fed reported that The Fed reported that ~~all~~ al large U.S. banks are large U.S. banks are

2020. https://www.ft.com/content/54c545aa-01b5-4e95-8adc-e680f5d82be1. 2020. https://www.ft.com/content/54c545aa-01b5-4e95-8adc-e680f5d82be1.
~~250~~254 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.
~~251~~255 Harding, Robin, Bank of Japan Pledges $1 Harding, Robin, Bank of Japan Pledges $1 ~~Trillion~~T rillion in Coronavirus Lending, 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.
~~252~~256 Brower, Derek, U.S. Brower, Derek, U.S. Oil Production Drops to Lowest Point Since 2018, 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.
~~253~~257 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.
~~254~~258 World Economic Outlook Update, p. 5. , p. 5.
~~255~~259 Arnold, Martin, Berlin and Arnold, Martin, Berlin and ECB SignalECB Signal End to Legal Impasse to Bond-Buying,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.
~~256~~260 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.
~~257~~261 Elder, Bryce, Sarah Elder, Bryce, Sarah Provan, and Hudson Lockett, U.S. Stocks End Lower as States Roll Back Reopening Measures, Provan, and Hudson Lockett, U.S. Stocks End Lower as States Roll Back Reopening Measures,
Financial ~~Times~~Tim es, 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.
~~258 The~~262 T he three scenarios include (1) a rapid, or “V”-shaped recovery; (2) a slower, or “U”-shaped recovery; and (3) a 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“W”-shaped or double-dip recession with a shortrecession with a short -lived recovery followed by a severe drop in activity later this year due -lived recovery followed by a severe drop in activity later this year due
to a second COVIDto a second COVID event. event. ~~Assessment~~Assessm ent 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.
~~259~~263 Ibid. Ibid.
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“sufficiently capitalized” to survive the three scenarios. “sufficiently capitalized” to survive the three scenarios.~~260~~264 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 The Department of Labor announced on July 2 that an additional 1.4 ~~million~~mil ion Americans had filed Americans had filed
for Unemployment Insurance, raising the total to 48.7 for Unemployment Insurance, raising the total to 48.7 ~~million~~ mil ion over the 15-week period from mid-over the 15-week period from mid-
March.March.~~261~~265 The insured The insured ~~seasonally~~seasonal y adjusted unemployment rate in June was estimated at 13.2%, 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 nonfarm payroll rose by 4.8 the employment situation in June, indicating that nonfarm payroll rose by 4.8 ~~million~~mil ion, lowering , 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 as exports ~~fell~~ fel by more than imports.by more than imports.~~262~~
266 On July 9, the BLS reported that an additional 1.3 On July 9, the BLS reported that an additional 1.3 ~~million~~ mil ion Americans filed for Unemployment Americans filed for Unemployment
Insurance, raising the 16-week total from mid-March to 50 Insurance, raising the 16-week total from mid-March to 50 ~~million.263~~mil ion.267 On July 17, the European On July 17, the European
Council met to approve a proposed plan to provide an additionalCouncil met to approve a proposed plan to provide an additional ~~€750 billion~~ €750 bil ion in pandemic in pandemic
support funds to assist European economies. Negotiations failed to produce an agreement and support funds to 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 talks continued over the weekend and resumed on July 20. On July21, however, European leaders
announced they had agreed to a €750 announced they had agreed to a €750 ~~billion~~ bil ion (about $859 (about $859 ~~billion)~~ bil ion) pandemic economic relief pandemic economic relief
package. package.
On July 29, the Federal Open Market Committee (FOMC) announced it was not changing key 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 interest rates. It also announced that it was extending foreign currency swap lines and a number
of its lending facilities. Federal Reserve Chairman of its lending facilities. Federal Reserve Chairman ~~Powell~~ Powel indicated “The ongoing public health indicated “The ongoing public health
crisis crisis ~~will~~ wil weigh heavily on economic activity, employment, and inflation in the near term, and 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 poses considerable risks to the economic outlook over the medium term.” On July 30, second
quarter GDP data indicated that U.S. economic output quarter GDP data indicated that U.S. economic output ~~fell~~ fel by 9.5% from the previous quarter, but 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 at an annualized rate of 33%. The Department of Labor also announced that an additional 1.4
~~million individuals~~ mil ion individuals applied for unemployment insurance during the previous week, raising the 19-applied for unemployment insurance during the previous week, raising the 19-
week total to 54 week total to 54 ~~million~~mil ion. .
August 2020
On August 20, the Department of Labor announced that an additional 1.1 On August 20, the Department of Labor announced that an additional 1.1 ~~million~~ mil ion workers filed workers filed
for unemployment insurance during the previous week, raising the total over the 22-week period for unemployment insurance during the previous week, raising the total over the 22-week period
from mid-March to mid-August 2020 to 56 from mid-March to mid-August 2020 to 56 ~~million~~mil ion Americans who had filed for unemployment Americans who had filed for unemployment
insurance.insurance.~~264 On a seasonally~~268 On a seasonal y adjusted basis, the number of insured unemployed workers was 14.8 adjusted basis, the number of insured unemployed workers was 14.8
~~million~~ mil ion in mid-August, down from a peak of 25 in mid-August, down from a peak of 25 ~~million~~ mil ion in mid-May. The total number of people in mid-May. The total number of people
claiming benefits in claiming benefits in ~~all~~ al programs in the week ending August 1, totaled 28 programs in the week ending August 1, totaled 28 ~~million, up from 1.7~~

~~260 Ibid., pp. 1-2.~~
~~261~~mil ion, up from 1.7 264 Ibid., pp. 1-2. 265 Unemployment Insurance Weekly Claims, July, July 1, 2020. https://www.dol.gov/ui/data.pdf. 1, 2020. https://www.dol.gov/ui/data.pdf.
~~262~~266 Monthly U.S. International Trade in Goods and Services, May 2020 , U.S. Census, U.S. Census Bureau,Bureau, July 2, 2020. July 2, 2020.
https://www.census.gov/foreign-trade/data/index.html. https://www.census.gov/foreign-trade/data/index.html.
~~263~~267 Unemployment Insurance Weekly Claims, July, July 9, 2020. https://www.dol.gov/ui/data.pdf. 9, 2020. https://www.dol.gov/ui/data.pdf.
~~264~~268 Unemployment Insurance Weekly Claims, Department of Labor, August 20, 2020. https://www.dol.gov/. , Department of Labor, August 20, 2020. https://www.dol.gov/.
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~~million~~ mil ion in the comparable week in 2019. The insured unemployment rate was 10.2%, also down in the comparable week in 2019. The insured unemployment rate was 10.2%, also down
from the peak reached in early May.from the peak reached in early May.
The Bank of England announced through its standard Monetary Policy Committee meeting that it The Bank of England announced through its standard Monetary Policy Committee meeting that it
would maintain its key interest rate at 0.1% and continue its purchases of UK government bond would maintain its key interest rate at 0.1% and continue its purchases of UK government bond
and nonfinancial investment-grade corporate bonds.and nonfinancial investment-grade corporate bonds.~~265~~269
September 2020
On September 17, the Department of Labor announced that over the 26-week period from mid-On September 17, the Department of Labor announced that over the 26-week period from mid-
March to mid-September 2020, 61 March to mid-September 2020, 61 ~~million~~mil ion Americans filed for unemployment insurance. Americans filed for unemployment insurance.~~266~~270 On a On a
~~seasonally~~seasonal y adjusted basis, the number of insured unemployed workers was 12.6 adjusted basis, the number of insured unemployed workers was 12.6 ~~million~~mil ion in late in late
August, down from a peak of 25 August, down from a peak of 25 ~~million~~mil ion in mid-May. The total number of people claiming in mid-May. The total number of people claiming
benefits in benefits in ~~all~~ al programs in the week ending August 29, totaled 29.7 programs in the week ending August 29, totaled 29.7 ~~million~~mil ion, up from 1.6 , up from 1.6 ~~million~~mil ion
in the comparable week in 2019. The insured unemployment rate was 8.6%, also down from the in the comparable week in 2019. The insured unemployment rate was 8.6%, also down from the
peak reached in early May. On September 4, BLS reported that nonfarm employment increased peak reached in early May. On September 4, BLS reported that nonfarm employment increased
by 1.4 by 1.4 ~~million~~ mil ion in August, reducing the total number of unemployed Americans to 13.6 in August, reducing the total number of unemployed Americans to 13.6 ~~million267~~
mil ion271 and pushing the unemployment rate down to 8.4%, again with some caveats.and pushing the unemployment rate down to 8.4%, again with some caveats.~~268~~
272 On September 29, 2021, global deaths from COVID-19 surpassed one On September 29, 2021, global deaths from COVID-19 surpassed one ~~million~~mil ion. .
October 2020
On October 1, IMF Managing Director Kristalina Georgieva warned there was a risk of a rise in On October 1, IMF Managing Director Kristalina Georgieva warned there was a risk of a rise in
sovereign bankruptcies unless temporary debt relief measures adopted early in the year were sovereign bankruptcies unless temporary debt relief measures adopted early in the year were
extended and sovereign debt contracts and processes are overhauled.extended and sovereign debt contracts and processes are overhauled.~~269~~273
On October 2, BLS reported that nonfarm employment increased by 661,000 in September, On October 2, BLS reported that nonfarm employment increased by 661,000 in September,
reducing the total number of unemployed Americans to 13.6 reducing the total number of unemployed Americans to 13.6 ~~million270~~mil ion274 and pushing the and pushing the
unemployment rate down to 7.9%, again with some caveats.unemployment rate down to 7.9%, again with some caveats.~~271~~275 President Trump announced that President Trump announced that
he had tested positive for COVID-19. he had tested positive for COVID-19.

~~265~~ 269 Monetary Policy Report August 2020, Bank of England, August, Bank of England, August 6, 2020. 6, 2020.
~~266~~270 Unemployment Insurance Weekly Claims, Department of Labor, September 17, 2020. https://www.dol.gov/;, Department of Labor, September 17, 2020. https://www.dol.gov/; Romm, Romm,
~~Tony~~T ony and Jeff Stein, 2.4 Million Americans Filed and Jeff Stein, 2.4 Million Americans Filed ~~Jobless Claims~~ Jobless Claims Last Week, BringingLast Week, Bringing Nine Week Nine Week ~~Total~~T otal to 38.6 to 38.6
Million, Million, Washington Post, May 21, 2020. https://www.washingtonpost.com/business/2020/05/21/unemployment- May 21, 2020. https://www.washingtonpost.com/business/2020/05/21/unemployment-
claims-coronavirus/ claims-coronavirus/
~~267 This~~271 T his total does not include 7.6 million workers who were total does not include 7.6 million workers who were working part time not by choice and 7.0 million working part time not by choice and 7.0 million
individualsindividuals who werewho were seeking employment. seeking employment.
~~268~~272 The Employment Situation-August 2020, Bureau of Labor Statistics, September 4, 2020, https://www.bls.gov/., Bureau of Labor Statistics, September 4, 2020, https://www.bls.gov/. BLS BLS
indicated that some individualsindicated that some individuals ~~were misclassified~~ were misclassified in previous months. Instead of being classifiedin previous months. Instead of being classified as unemployed, they as unemployed, they
werewere ~~misclassified~~ misclassified as employed, butas employed, but absent from work dueabsent from work due to coronavirus-related businessto coronavirus-related business closures. If suchclosures. If such individuals individuals
had been classifiedhad been classified as as unemployed, the unemployment rate would have been 5 percentage points higher in April.unemployed, the unemployment rate would have been 5 percentage points higher in April.
~~269~~ 273 Smith, Colby, IMF Calls Smith, Colby, IMF Calls for Urgent Action to Prevent Debt Crisis in Emerging Economies, for Urgent Action to Prevent Debt Crisis in Emerging Economies, Financial Times, ,
October 1, 2020. https://www.ft.com/content/b61c8dea-58bc-476d-ae9f-c2de104808de. October 1, 2020. https://www.ft.com/content/b61c8dea-58bc-476d-ae9f-c2de104808de.
~~270 This~~274 T his total does not include 7.6 million workers who were total does not include 7.6 million workers who were working part time not by choice and 7.0 million working part time not by choice and 7.0 million
individualsindividuals who werewho were seeking employment. seeking employment.
~~271~~275 The Employment Situation-August 2020, Bureau of Labor Statistics, September 4, 2020, https://www.bls.gov/., Bureau of Labor Statistics, September 4, 2020, https://www.bls.gov/. BLS BLS
indicated that some individualsindicated that some individuals ~~were misclassified~~ were misclassified in previous months. Instead of being classifiedin previous months. Instead of being classified as unemployed, they as unemployed, they
werewere ~~misclassified~~ misclassified as employed, butas employed, but absent from work dueabsent from work due to coronavirus-related businessto coronavirus-related business closures. If suchclosures. If such individuals individuals
had been classifiedhad been classified as as unemployed, the unemployment rate would have been 5 percentage points higher in April. unemployed, the unemployment rate would have been 5 percentage points higher in April.
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On October 29, DOL reported that over the 32-week period from mid-March to late October On October 29, DOL reported that over the 32-week period from mid-March to late October
2020, about 66 2020, about 66 ~~million~~mil ion Americans filed for unemployment insurance. Americans filed for unemployment insurance.~~272 On a seasonally~~276 On a seasonal y adjusted adjusted
basis, the number of insured unemployed individuals was 7.8 basis, the number of insured unemployed individuals was 7.8 ~~million~~mil ion in late October, down from in late October, down from
a peak of 25 a peak of 25 ~~million~~ mil ion in mid-May. On October 30, UK Prime Minister Boris Johnson announced in mid-May. On October 30, UK Prime Minister Boris Johnson announced
the resurgence of coronavirus cases in the UK and the resurgence of coronavirus cases in the UK and ~~called~~cal ed for another countrywide business for another countrywide business
lockdown. In response the resurgence of coronavirus cases across Europe, financial markets lost lockdown. In response the resurgence of coronavirus cases across Europe, financial markets lost
value; the Dow Jones Industrial Average lost more than 1.800 points in the last week of October, value; the Dow Jones Industrial Average lost more than 1.800 points in the last week of October,
or more than 4% of its value. or more than 4% of its value.
November 2020
In the first three days of November, the DJIA regained three-fourths of the value lost during the In the first three days of November, the DJIA regained three-fourths of the value lost during the
previous week as congressional leaders and the Trump Administration signaled the possibility of previous week as congressional leaders and the Trump Administration signaled the possibility of
a new stimulus package to support the U.S. economy.a new stimulus package to support the U.S. economy.
Preliminary forecasts indicate that India’s economy contracted by 8.6% in the third quarter of Preliminary forecasts indicate that India’s economy contracted by 8.6% in the third quarter of
2020, reportedly reflecting increased consumer activity.2020, reportedly reflecting increased consumer activity.~~273~~277 On November 12, India’s finance On November 12, India’s finance
minister announced a new package of fiscal measures totaling $35 minister announced a new package of fiscal measures totaling $35 ~~billion~~bil ion to increase consumer to increase consumer
spending and to assist manufacturing, agriculture, and exports. The move followed an spending and to assist manufacturing, agriculture, and exports. The move followed an
announcement by India’s cabinet that it had approved a spending package of $27 announcement by India’s cabinet that it had approved a spending package of $27 ~~billion~~ bil ion to to
provide in incentives over five years to manufacturing firms, including automobiles, auto parts, provide in incentives over five years to manufacturing firms, including automobiles, auto parts,
pharmaceuticals, textiles, and food products.pharmaceuticals, textiles, and food products.~~274~~278
On November 12, the DOL reported that over the 35-week period from mid-March to the first On November 12, the DOL reported that over the 35-week period from mid-March to the first
week of November 2020, about 67.4 week of November 2020, about 67.4 ~~million~~mil ion Americans had filed for unemployment insurance. Americans had filed for unemployment insurance.~~275~~279
On a On a ~~seasonally~~seasonal y adjusted basis, the number of insured unemployed individuals was 6.8 adjusted basis, the number of insured unemployed individuals was 6.8 ~~million~~mil ion in in
late October, down from a peak of 25 late October, down from a peak of 25 ~~million~~mil ion in mid-May. Weekly claims have in mid-May. Weekly claims have ~~fallen~~fal en from the from the
sharp increases recorded insharp increases recorded in April and May, declining to 709,000 in the week ending November 7, April and May, declining to 709,000 in the week ending November 7,
after totaling 751,00 the previous week, four times higher than the average number of weekly after totaling 751,00 the previous week, four times higher than the average number of weekly
claims of about 200,000 recorded prior to the COVID-19 pandemic. claims of about 200,000 recorded prior to the COVID-19 pandemic.
On November 15, 15 countries, including Brunei, Colombia, Indonesia, Laos, Malaysia, On November 15, 15 countries, including Brunei, Colombia, Indonesia, Laos, Malaysia,
Myanmar, the Philippines, Singapore, Thailand, Vietnam. Australia, China, Japan, New Zealand, Myanmar, the Philippines, Singapore, Thailand, Vietnam. Australia, China, Japan, New Zealand,
and South Korea, signed the Regional Comprehensive Economic Partnership (RCEP) to create and South Korea, signed the Regional Comprehensive Economic Partnership (RCEP) to create
~~potentially~~potential y one of the largest free trade agreements. The agreement one of the largest free trade agreements. The agreement ~~will~~ wil need to be ratified by the need to be ratified by the
signatory governments. signatory governments.
On November 19, 2020, the DOL reported that over the 36-week period from mid-March to mid- On November 19, 2020, the DOL reported that over the 36-week period from mid-March to mid-
November 2020, about 68.2 November 2020, about 68.2 ~~million~~mil ion Americans had filed for unemployment insurance. Americans had filed for unemployment insurance. ~~276 Weekly~~

~~272~~280 Weekly 276 Unemployment Insurance Weekly Claims, Department of Labor, October 29, 2020. https://www.dol.gov/;, Department of Labor, October 29, 2020. https://www.dol.gov/; Romm, Romm,
~~Tony~~T ony and Jeff Stein, 2.4 Million Americans Filed and Jeff Stein, 2.4 Million Americans Filed ~~Jobless Claims~~ Jobless Claims Last Week, BringingLast Week, Bringing Nine Week Nine Week ~~Total~~T otal to 38.6 to 38.6
Million, Million, Washington Post, May 21, 2020. https://www.washingtonpost.com/business/2020/05/21/unemployment- May 21, 2020. https://www.washingtonpost.com/business/2020/05/21/unemployment-
claims-coronavirus/ claims-coronavirus/
~~273~~277 RBI Bulletin – November 2020, Reserve Bank of India, November 2020. , Reserve Bank of India, November 2020.
~~274~~278 Sharma, Ashok, India Announces $35 Billion Economic Stimulus Sharma, Ashok, India Announces $35 Billion Economic Stimulus Package, Package, ABCNews,, November 12, 2020. November 12, 2020.
https://abcnews.go.com/International/wireStory/india-announces-35-billion-economic-stimulus-package-74165709. https://abcnews.go.com/International/wireStory/india-announces-35-billion-economic-stimulus-package-74165709.
~~275~~279 Unemployment Insurance Weekly Claims, Department of Labor, November 12, 2020. https://www.dol.gov/;, Department of Labor, November 12, 2020. https://www.dol.gov/; Romm, Romm,
~~Tony~~T ony and Jeff Stein, 2.4 Million Americans Filed and Jeff Stein, 2.4 Million Americans Filed ~~Jobless Claims~~ Jobless Claims Last Week, BringingLast Week, Bringing Nine Week Nine Week ~~Total to~~T otal t o 38.6 38.6
Million, Million, Washington Post, May 21, 2020. https://www.washingtonpost.com/business/2020/05/21/unemployment- May 21, 2020. https://www.washingtonpost.com/business/2020/05/21/unemployment-
claims-coronavirus/ claims-coronavirus/
~~276~~280 Unemployment Insurance Weekly Claims, Department of Labor, November 19, 2020. https://www.dol.gov/. , Department of Labor, November 19, 2020. https://www.dol.gov/.
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claims rose to 742,000 in the week ending November 14, increasing from 711,000 the previous claims rose to 742,000 in the week ending November 14, increasing from 711,000 the previous
week, marking the first increase in weekly claims since October 10, 2020. week, marking the first increase in weekly claims since October 10, 2020.
December 2020
On December 3, OPEC and Russia agreed to increase oil output by 500,000 barrels per day On December 3, OPEC and Russia agreed to increase oil output by 500,000 barrels per day
starting in January 2021, below a previously discussed increase of 2 starting in January 2021, below a previously discussed increase of 2 ~~million~~mil ion barrels per day, as barrels per day, as
pandemic-related lags in global economic recovery curtail global oil demand.pandemic-related lags in global economic recovery curtail global oil demand.
On December 4, the BLS indicated that the U.S. economy added 245,000 jobs in November, On December 4, the BLS indicated that the U.S. economy added 245,000 jobs in November,
nearly half the 610,000 jobs added in October, raising concerns that the U.S. economic recovery nearly half the 610,000 jobs added in October, raising concerns that the U.S. economic recovery
had stal ed.281~~had stalled.277~~
The DOL reported on December 10 that over the 39-week period from mid-March to the The DOL reported on December 10 that over the 39-week period from mid-March to the
beginning of December 2020, over 70 beginning of December 2020, over 70 ~~million~~mil ion Americans had filed for unemployment Americans had filed for unemployment
insurance.insurance.~~278~~282 Week-over-week new claims totaled 863,000 in the week ending December 5, Week-over-week new claims totaled 863,000 in the week ending December 5,
increasing by 146,000 from the previous week’s total of 716,00, four times higher than the increasing by 146,000 from the previous week’s total of 716,00, four times higher than the
average number of weekly claims of about 200,000 recorded prior to the COVID-19 pandemic. average number of weekly claims of about 200,000 recorded prior to the COVID-19 pandemic.
Also, in trading December 10, the price of Brent crude oil breached the $50 per barrel mark for Also, in trading December 10, the price of Brent crude oil breached the $50 per barrel mark for
the first time since March 2020. the first time since March 2020.
On December 14, the United States began administering the COVID-19 vaccine. U.S. equity On December 14, the United States began administering the COVID-19 vaccine. U.S. equity
market values market values ~~fell~~ fel as investors reportedly debated the prospects for a new stimulus package in the as investors reportedly debated the prospects for a new stimulus package in the
United States and a resurgence in COVID-19 cases in New York, Boston, and London raised United States and a resurgence in COVID-19 cases in New York, Boston, and London raised
concerns over a resumption of lockdowns.concerns over a resumption of lockdowns.~~279~~
283 On December 17, the DOL announced that on a week-over-week basis, new claims for On December 17, the DOL announced that on a week-over-week basis, new claims for
unemployment insurance totaled 885,000 in the week ending December 12, increasing by 23,000 unemployment insurance totaled 885,000 in the week ending December 12, increasing by 23,000
from the previous week’s total of 862,00. In the week ending November 28, 20.6 from the previous week’s total of 862,00. In the week ending November 28, 20.6 ~~million~~mil ion people people
claimed benefits in claimed benefits in ~~all~~ al programs. The insured unemployment rate for the week ending December programs. The insured unemployment rate for the week ending December
5 was 3.8%. 5 was 3.8%.
On December 22, BEA released updated data on U.S. GDP growth for the third quarter, On December 22, BEA released updated data on U.S. GDP growth for the third quarter,
indicating the economy grew by 33.4%, outpacing the 31.4% decline recorded in the second indicating the economy grew by 33.4%, outpacing the 31.4% decline recorded in the second
quarter. quarter.
January 2021
On January 8, 2021, BLS reported that U.S. nonfarm employment On January 8, 2021, BLS reported that U.S. nonfarm employment ~~fell~~ fel by 140,000 in December, by 140,000 in December,
down from the previous month’s increase of 336,000: the total number of unemployed Americans down from the previous month’s increase of 336,000: the total number of unemployed Americans

~~277~~ 281 The Employment Situation-December 2020, Bureau of Labor Statistics, January 8, 2021, https://www.bls.gov/., Bureau of Labor Statistics, January 8, 2021, https://www.bls.gov/. BLS BLS
~~278~~282 Unemployment Insurance Weekly Claims, Department of Labor, January 21, 2021. https://www.dol.gov/;, Department of Labor, January 21, 2021. https://www.dol.gov/; Romm, Romm,
~~Tony~~T ony and Jeff Stein, 2.4 Million Americans Filed and Jeff Stein, 2.4 Million Americans Filed ~~Jobless Claims~~ Jobless Claims Last Week, BringingLast Week, Bringing Nine Week Nine Week ~~Total~~T otal to 38.6 to 38.6
Million, Million, Washington Post, May 21, 2020. https://www.washingtonpost.com/business/2020/05/21/unemployment- May 21, 2020. https://www.washingtonpost.com/business/2020/05/21/unemployment-
claims-coronavirus/ claims-coronavirus/
~~279~~283 Platt, Eric, Naomi Rovnick, and Camilla Hodgson, S&P Slides Platt, Eric, Naomi Rovnick, and Camilla Hodgson, S&P Slides for Fourth Straight Day, for Fourth Straight Day, Financial Times, December , December
14, 2020. https://www.ft.com/content/898ca316-9bbf-3c20-b137-2dbdba93c800; Rovnick, Naomi, and Camilla 14, 2020. https://www.ft.com/content/898ca316-9bbf-3c20-b137-2dbdba93c800; Rovnick, Naomi, and Camilla
Hodgson, EquitiesHodgson, Equities and Sterling Lifted by Extension to EU-UK and Sterling Lifted by Extension to EU-UK ~~Trade Talks~~T rade T alks, , Financial ~~Times~~Tim es, December 14, 2020, , December 14, 2020,
https://www.ft.com/content/4f65ee35-9957-4bab-91c4-9f76c0a44a2b; Cameron-Chileshe, Jasmine, Alice Hancock, https://www.ft.com/content/4f65ee35-9957-4bab-91c4-9f76c0a44a2b; Cameron-Chileshe, Jasmine, Alice Hancock,
SebastianSebastian Payne, and GeorgePayne, and George Parker, London to Enter Toughest Coronavirus Restrictions, Parker, London to Enter Toughest Coronavirus Restrictions, Financial ~~Times~~Tim es, December , December
14, 2020, https://www.ft.com/content/626f2e3a-ac8f-401d-818a-01120cab3284. 14, 2020, https://www.ft.com/content/626f2e3a-ac8f-401d-818a-01120cab3284.
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was unchanged from the previous month at 10.7 was unchanged from the previous month at 10.7 ~~million,280~~mil ion,284 the unemployment rate stayed the unemployment rate stayed
constant at 6.7%. constant at 6.7%.
On January 13, the House of Representatives impeached President Donald Trump. On January 13, the House of Representatives impeached President Donald Trump.
On January 15, the global number of deaths associated with COVID-19 surpassed two On January 15, the global number of deaths associated with COVID-19 surpassed two ~~million.~~
mil ion. On January 19, deaths in the United States associated with COVID-19 surpassed 400,000. On January 19, deaths in the United States associated with COVID-19 surpassed 400,000.
On January 28, the DOL indicated that during the 46-week period from mid-March 2020 to end- On January 28, the DOL indicated that during the 46-week period from mid-March 2020 to end-
January 2021, over 76 January 2021, over 76 ~~million~~mil ion Americans had filed for unemployment insurance. On a Americans had filed for unemployment insurance. On a ~~seasonally~~seasonal y
adjusted basis, the number of insured unemployed individuals was 4.8 adjusted basis, the number of insured unemployed individuals was 4.8 ~~million~~mil ion in mid-January in mid-January
2021, down from a peak of 25 2021, down from a peak of 25 ~~million~~mil ion in mid-May. On a week-over-week basis, new claims in mid-May. On a week-over-week basis, new claims
totaled 847,000 in the week ending January 23, 2021, decreasing by 67,000 from the previous totaled 847,000 in the week ending January 23, 2021, decreasing by 67,000 from the previous
week’s total of 914,000; in the week ending January 9, 18.3 week’s total of 914,000; in the week ending January 9, 18.3 ~~million~~mil ion people claimed benefits in people claimed benefits in ~~all~~
al programs. programs.
The Bureau of Economic Analysis (BEA) announced that during the fourth quarter of 2020, the The Bureau of Economic Analysis (BEA) announced that during the fourth quarter of 2020, the
U.S. economy grew by 4.0% at an annual rate; the U.S. economy grew by 4.0% at an annual rate; the ~~overall~~ overal rate of growth for 2020 was estimated rate of growth for 2020 was estimated
at -3.5%, reflecting negative rates of growth in personal consumption (-3.9%), investment (-5.3), at -3.5%, reflecting negative rates of growth in personal consumption (-3.9%), investment (-5.3),
and exports (-13.0%) and imports (-9.3); government consumption and investment (federal, state, and exports (-13.0%) and imports (-9.3); government consumption and investment (federal, state,
and local) grew by 1.1%. and local) grew by 1.1%.
February 2021
On February 4, 2021, the Department of Labor reported that new claims for unemployment On February 4, 2021, the Department of Labor reported that new claims for unemployment
insurance totaled 779,000 in the week ending January 30, 2021, raising the total claims filed insurance totaled 779,000 in the week ending January 30, 2021, raising the total claims filed
during the 47-week period from mid-March 2020 to end-January 2021 to over 77 during the 47-week period from mid-March 2020 to end-January 2021 to over 77 ~~million~~mil ion
Americans. In the week ending January 16, 2021, 17.8 Americans. In the week ending January 16, 2021, 17.8 ~~million~~mil ion people claimed benefits in people claimed benefits in ~~all~~
al programs; the insured unemployment rate was 3.2%. programs; the insured unemployment rate was 3.2%.
On February 5, 2021, BLS reported that the total number of unemployed Americans in January On February 5, 2021, BLS reported that the total number of unemployed Americans in January
2021 declined to 10.1 2021 declined to 10.1 ~~million~~ mil ion and that the unemployment rate had and that the unemployment rate had ~~fallen~~fal en to 6.3%. to 6.3%.
The DOL reported on February 18 that during the 49-week period from mid-March 2020 to mid- The DOL reported on February 18 that during the 49-week period from mid-March 2020 to mid-
February 2021, nearly 79 February 2021, nearly 79 ~~million~~mil ion Americans had filed for unemployment insurance. On a Americans had filed for unemployment insurance. On a
~~seasonally~~seasonal y adjusted basis, the number of insured unemployed individuals was 4.5 adjusted basis, the number of insured unemployed individuals was 4.5 ~~million~~mil ion in early- in early-
February 2021, down from a peak of 25 February 2021, down from a peak of 25 ~~million~~mil ion in mid-May. in mid-May.
On February 22, 2021, the United States announced that it had surpassed 500,000 deaths caused On February 22, 2021, the United States announced that it had surpassed 500,000 deaths caused
by COVID-19. by COVID-19.
March 2021
On March 3, 2021, UK On March 3, 2021, UK ~~Chancellor~~Chancel or of the Exchequer Sunak announced a £65 of the Exchequer Sunak announced a £65 ~~billion~~bil ion stimulus stimulus
package over two years to revive the UK economy, to be followed by tax increases starting in package over two years to revive the UK economy, to be followed by tax increases starting in
2023. In the United States, the House of Representatives was set to pass a Senate-amended $1.9 2023. In the United States, the House of Representatives was set to pass a Senate-amended $1.9
~~trillion~~ tril ion COVID-related economic stimulus COVID-related economic stimulus ~~bill~~ bil during the week of March 8, 2021, with President during the week of March 8, 2021, with President
Biden prepared to sign the legislation. Biden prepared to sign the legislation.
On March 4, 2021, the Labor Department reported that over 80 On March 4, 2021, the Labor Department reported that over 80 ~~million~~mil ion Americans (half of the Americans (half of the
160 mil ion civilian ~~160 million civilian~~ work force) had filed for unemployment insurance since mid-March 2020. work force) had filed for unemployment insurance since mid-March 2020.

~~280 This~~ 284 T his total does not include 6.2 million workers who were total does not include 6.2 million workers who were working part time not by choice and 7.3 million working part time not by choice and 7.3 million
individualsindividuals who werewho were seeking employment. seeking employment.
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On a On a ~~seasonally~~seasonal y adjusted basis, the number of insured unemployed individuals was 4.3 adjusted basis, the number of insured unemployed individuals was 4.3 ~~million;~~
mil ion; and by the end of February 2021, 18 and by the end of February 2021, 18 ~~million~~mil ion people claimed benefits in people claimed benefits in ~~all programs.~~
al programs. Developed economies, including Britain, Switzerland, the EU, and the United States, blocked a proposal by over 80 developing countries at the World Trade Organization to suspend intel ectual property rights restrictions on production of COVID-19 vaccines. On March 26, 2021, Germany’s highest court stopped a law that would have ratified the EU On March 26, 2021, Germany’s highest court stopped a law that would have ratified the EU
Pandemic Emergency Purchase Program (PEPP) bond-buying program. The program requires Pandemic Emergency Purchase Program (PEPP) bond-buying program. The program requires
ratification by each of the EU member’s national parliaments. The legislation had been passed by ratification by each of the EU member’s national parliaments. The legislation had been passed by
both of Germany’s houses of Parliament and was expected to be signed by German president, both of Germany’s houses of Parliament and was expected to be signed by German president,
Frank-Walter Steinmeier, when the court intervened. Frank-Walter Steinmeier, when the court intervened.
April 2021
On AprilOn April 15 25, India reported a single-day total of , India reported a single-day total of ~~200~~350,000 new cases. Brazil reportedly has had ,000 new cases. Brazil reportedly has had
over 350,000 viral-related deaths: in some cities over 350,000 viral-related deaths: in some cities in Brazil, COVID-related daily deathsCOVID-related daily deaths ~~in Brazil~~ have have
outnumbered daily births. A group of 175 former world leaders and Nobel laureates outnumbered daily births. A group of 175 former world leaders and Nobel laureates ~~called~~cal ed on the on the
United States to suspend United States to suspend ~~intellectual~~intel ectual property rights for COVID-19 vaccines to facilitate the property rights for COVID-19 vaccines to facilitate the
international production and distribution by international production and distribution by ~~allowing~~al owing developing countries the ability to developing countries the ability to
manufacture their own vaccines. The group warned that, “….inequitable vaccine access would manufacture their own vaccines. The group warned that, “….inequitable vaccine access would
impact the global economy and prevent it from recovering.” impact the global economy and prevent it from recovering.”
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Comparing the Current Crisis and the 2008 Crisis
Sharp declines in the stock market Sharp declines in the stock market and broader financial sector turbulence; interest rate cuts and large-scale and broader financial sector turbulence; interest rate cuts and large-scale
FederalFederal Reserve intervention; and discussionsReserve intervention; and discussions of massiveof massive government stimulus packages have led somegovernment stimulus packages have led some observers observers
to compare the current market reaction to that experiencedto compare the current market reaction to that experienced a little overa little over a decade ago. There are similaritiesa decade ago. There are similarities and and
important differencesimportant differences between the current economic crisisbetween the current economic crisis and the global financial crisisand the global financial crisis of 2008/2009. Foremost, of 2008/2009. Foremost,
the earlierthe earlier ~~crisis~~ crisis was rooted in structural weaknesswas rooted in structural weakness in the U.S. financial sector.in the U.S. financial sector. ~~Following the collapse~~ Fol owing the col apse of the U.S. of the U.S.
housing bubble, it became impossiblehousing bubble, it became impossible for firmsfor firms to identify demand and hold inventoriesto identify demand and hold inventories across many sectors across many sectors
(construction, retail,(construction, retail, etc.). This led to massiveetc.). This led to massive oversupply and sharp retail lossesoversupply and sharp retail losses which extended to other sectors which extended to other sectors
of the U.S. economy and of the U.S. economy and ~~eventually~~eventual y the global economy. the global economy. Moreover,Moreover, financial markets acrossfinancial markets across countries werecountries were linked linked
together by credit default swaps. As the crisistogether by credit default swaps. As the crisis unfolded, large numbers of banks and other financial institutions unfolded, large numbers of banks and other financial institutions
were negatively affected, raising questions about capital sufficiency and reserves.were negatively affected, raising questions about capital sufficiency and reserves. The crisisThe crisis then quickly engulfed then quickly engulfed
credit-rating agencies,credit-rating agencies, mortgage lending companies,mortgage lending companies, and the real estate industry broadly. Market resolutionand the real estate industry broadly. Market resolution came came
~~gradually~~gradual y with a range of monetary and fiscal policy measures with a range of monetary and fiscal policy measures that were closelythat were closely coordinated at the global level. coordinated at the global level.
These were focused on putting a floor under the These were focused on putting a floor under the ~~falling~~fal ing markets, markets, stabilizing banks, and shoring up investor stabilizing banks, and shoring up investor
confidence to get spending started again. Starting in September 2007, the Federalconfidence to get spending started again. Starting in September 2007, the Federal ~~Reserve~~ Reserve cut interest rates from 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-zero, the Fed turned to other so-~~called~~cal ed “unconventional measures,” “unconventional measures,” including targeted assistance to financial including targeted assistance to financial
institutions, encouraging Congress to pass the Troubled Asset Reliefinstitutions, encouraging Congress to pass the Troubled Asset Relief Program (TARP) to prevent the Program (TARP) to prevent the ~~collapse~~ col apse of of
the financial sector and boost consumer spending. Other measuresthe financial sector and boost consumer spending. Other measures included swap arrangements between the included swap arrangements between the
FederalFederal Reserve and the European Central Bank and Reserve and the European Central Bank and ~~smaller~~ smal er central banks, and so-central banks, and so-~~called~~cal ed “quantitative easing” to “quantitative easing” to
boost the money supply. On a global level,boost the money supply. On a global level, the United States and other countries tripled the resourcesthe United States and other countries tripled the resources of the IMF of the IMF
(from $250 (from $250 ~~billion~~bil ion to $750 to $750 ~~billion~~bil ion) and coordinated domestic) and coordinated domestic stimulus efforts.stimulus efforts.
Unlike the 2008 crisis,Unlike the 2008 crisis, the current crisisthe current crisis began as a supply shock. As the global economy has becomebegan as a supply shock. As the global economy has become more 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 mobileitem such as a car or mobile device consists of parts manufactured device consists of parts manufactured ~~all~~ al over the world, and involving multiple over the world, and involving multiple
border crossingsborder crossings before final assembly.before final assembly. The earliestThe earliest ~~implications~~ implications of the current crisisof the current crisis came in January as plant came in January as plant
closuresclosures in China and other parts of Asia led to interruptions in the supply chain and concerns about dwindling in China and other parts of Asia led to interruptions in the supply chain and concerns about dwindling
inventories.inventories. As the virus spread fromAs the virus spread from Asia to Europe, the crisisAsia to Europe, the crisis switched from supply concerns to a broader switched from supply concerns to a broader
demand crisisdemand crisis as the measuresas the measures being introduced to contain the spread of the virus (social distancing, travel being introduced to contain the spread of the virus (social distancing, travel
restrictions,restrictions, ~~cancelling~~ cancel ing sporting events, closing shops and restaurants, and mandatory quarantine measures) sporting events, closing shops and restaurants, and mandatory quarantine measures)
prevent most formsprevent most forms of economicof economic activity from occurring. Thus, unlike the 2008 crisisactivity from occurring. Thus, unlike the 2008 crisis response,response, which involved which involved
liquidity and solvency-related policy measuresliquidity and solvency-related policy measures to get people spending again, the current crisisto get people spending again, the current crisis did not start as a did not start as a
financial crisis,financial crisis, but could evolve into one if a recoverybut could evolve into one if a recovery in economicin economic activity is delayed. Whileactivity is delayed. While larger firmslarger firms may have may have
sufficient capital to wait out a crisis,sufficient capital to wait out a crisis, many aspects of the economy (such as restaurants or retailmany aspects of the economy (such as restaurants or retail operations) operations)
operate on very tight margins and would likelyoperate on very tight margins and would likely not be able to pay employeesnot be able to pay employees after closuresafter closures lasting morelasting more than a few than a few
days. Many people days. Many people ~~will~~ wil also need to balance child care and workalso need to balance child care and work during quarantine or social during quarantine or social ~~distancing~~dista ncing measures. measures.
During this type of crisis,During this type of crisis, ~~while~~ while monetary policy measuresmonetary policy measures play a part—and the Federalplay a part—and the Federal ~~Reserve~~ Reserve has once again cut 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 upon. As a result, fiscal stimulus ~~will likely~~ wil likely play a relativelyplay a relatively ~~larger~~ larger role in this crisisrole in this crisis in orderin order to prevent personal and to prevent personal and
corporate bankruptcies during the peak crisiscorporate bankruptcies during the peak crisis period.period. Efforts to coordinate U.S. and foreign economic policy Efforts to coordinate U.S. and foreign economic policy
measuresmeasures ~~will~~ wil also have an important role in mitigating the scale and length of any global economicalso have an important role in mitigating the scale and length of any global economic downtown. downtown.
Source: Prepared by Martin A.Prepared by Martin A. Weiss,Weiss, CRS. 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 would “use ministers and central bankers released a statement on March 3, 2020, indicating they would “use
~~all~~ al appropriate policy tools” to sustain economic growth.appropriate policy tools” to sustain economic growth.~~281~~285 The Finance Ministers also pledged The Finance Ministers also pledged
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.~~282~~286 In most cases, In most cases,

~~281~~ 285 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, “press-releases/sm927. Long, Heather, “ G-7 Leaders Promise to Help Economy as COVID-19 Spreads,G-7 Leaders Promise to Help Economy as COVID-19 Spreads, ~~But They~~ But T hey Don’t Don’t
Announce Any NewAnnounce Any New Action,” Action,” Washington Post, March 3, 2020. https://www.washingtonpost.com/business/2020/03/, March 3, 2020. https://www.washingtonpost.com/business/2020/03/
03/economy-COVID-19-rate-cuts/. 03/economy-COVID-19-rate-cuts/.
~~282~~286 Giles Giles et al., “Finance Ministers Ready to et al., “Finance Ministers Ready to ~~Take~~T ake Action.” Action.”
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however, countries pursued their own divergent strategies, in some cases including banning however, countries 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.”~~283~~287 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 2008-2009 global was the largest one-time reduction in the interest rate by the Fed since the 2008-2009 global
financial crisis. financial crisis.
After a delayed response, other central banks followed the actions of the G-7 countries. Most After a delayed response, other central banks followed the actions of the G-7 countries. Most
central banks lowered interest rates and acted to increase liquidity in their financial systems central banks lowered interest rates and acted to increase liquidity in their financial systems
through a combination of measures, including lowering capital buffers and reserve requirements, through a combination of measures, including lowering capital buffers and reserve requirements,
creating temporary lending facilities for banks and businesses, and easing loan terms. In addition, creating temporary lending facilities for banks and businesses, and easing loan terms. In addition,
national governments adopted various fiscal measures to sustain economic activity. In general, national governments adopted various fiscal measures to sustain economic activity. In general,
these measures included making payments directly to households, temporarily deferring tax these measures included making payments directly to households, temporarily deferring tax
payments, extending unemployment insurance, and increasing guarantees and loans to businesses. payments, extending unemployment insurance, and increasing guarantees and loans to businesses.
~~See~~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.~~284~~
288 The United States
Recognizing the growing impact the pandemic was having on financial markets and economic Recognizing the growing impact the pandemic was having on financial markets and economic
growth, the Federal Reserve (Fed) took a number of steps to promote economic and financial growth, the Federal Reserve (Fed) took 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 were intended to stimulate economic activity by reducing interest rates; other actions were actions were intended to stimulate economic activity by reducing interest rates; other actions were
intended to provide liquidityintended to provide liquidity to financial markets so firms would have access to needed funding. to financial markets so firms would have access to needed funding.
In announcing its decisions, the Fed indicated that “[t]he COVID-19 outbreak has harmed In announcing its decisions, the Fed indicated that “[t]he COVID-19 outbreak has harmed
communities and disrupted economic activity in many countries, including the United States. 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.~~285~~289” 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.~~286~~290 In In
October, Congress and the Trump Administration negotiated over the substance of an additional October, Congress and the Trump Administration negotiated over the substance of an additional
spending package to support the U.S. economy. spending package to support the U.S. economy.
On On ~~March 25~~April 29, 2021, the Bureau of Economic Analysis (BEA) released updated data on U.S. GDP , 2021, the Bureau of Economic Analysis (BEA) released updated data on U.S. GDP
growth for the growth for the ~~fourth quarter of 2020, indicating the economy grew by 4.3%, substantially below~~
~~the third quarter rate of 33.4%. In contrast, U.S. GDP fell~~ first quarter of 2021 and updated data for 2020 that indicates the economy grew by 6.4% in the first quarter of 2020, outpacing the 4th quarter 2020 rate of 4.3%. In contrast, U.S. GDP fel at an annual rate of 31.4% in the second at an annual rate of 31.4% in the second
quarter, after quarter, after ~~rising~~fal ing by 5.0% at an annual rate in the first quarter, as indicated in by 5.0% at an annual rate in the first quarter, as indicated in Figure 16..~~287~~291 On On
an annual basis, the an annual basis, the 2020 rate of growth rate of growth ~~fell~~ fel by 3.5%, compared with a 2019 rate of 2.9%. In the by 3.5%, compared with a 2019 rate of 2.9%. In the
second quarter, amidst a large decline second quarter, amidst a large decline ~~overall~~ overal in U.S. economic activity in response to business in U.S. economic activity in response to business
lockdowns, some sectors experienced a decline in activity of 80% or more, including recreation, lockdowns, some sectors experienced a decline in activity of 80% or more, including recreation,
food services and accommodation and food services and accommodation and transportation sectors. In the third quarter, however, transportation sectors. In the third quarter, however, ~~all~~

~~283~~ ~~Federal Reserve Releases FOMC~~ al sectors except mining experienced 287 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.
~~284~~288 Stage Three Proposal, U.S. Department of the , U.S. Department of the ~~Treasury~~T reasury, March 17, 2020. https://www.washingtonpost.com/context/, March 17, 2020. https://www.washingtonpost.com/context/
departmentdepartment -of-treasury-proposal-for-COVID-19-response/6c2d2ed5-a18b-43d2-8124-28d394fa51ff/?itid=-of-treasury-proposal-for-COVID-19-response/6c2d2ed5-a18b-43d2-8124-28d394fa51ff/?itid=
lk_inline_manual_3. lk_inline_manual_3.
~~285~~289 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.
~~286~~290 Politi, James and Aime Williams, “ Politi, James and Aime Williams, “~~Trump~~T rump to Suspend Some to Suspend Some ~~Tariffs~~T ariffs for 90 Days,” 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.
~~287 Bureau of Economic Analysis,~~291 Gross Gross Domestic Product, First Quarter 2021 (Advance Estimate), Bureau of Economic Analysis, April 29~~Domestic Product, (Third Estimate), GDP by Industry, and Corporate Profits,~~
~~Fourth Quarter and Year 2020, March 25~~, 2021. , 2021.
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~~sectors except mining experienced~~ positive rate of growth. Personal consumption increased by positive rate of growth. Personal consumption increased by
41% in the third quarter, after 41% in the third quarter, after ~~falling~~ fal ing by 31.4% in the second quarter. by 31.4% in the second quarter.
Figure 16. U.S. GDP, Percentage Change From Preceding Quarter
~~Seasonally~~Seasonal y adjusted at annual rate adjusted at annual rate

Source: Bureau of Economic Analysis.Bureau of Economic Analysis. Created by CRS.Created by CRS.
~~On April 7~~ Notes: Exports and imports represent the combination of goods and services. On May 4, 2021, the U.S. Census Bureau reported an increase in the , 2021, the U.S. Census Bureau reported an increase in the ~~overall~~ overal U.S. goods and U.S. goods and
services trade deficit in services trade deficit in ~~February~~March 2021, compared with 2021, compared with ~~January~~February 2021, of $4 bil ion to reach a monthly record $74.4 bil ion ~~2021, of $71.1 billion, or an~~
~~increase on a month-to-month basis of $3.3 billion~~. The increase in the monthly deficit in goods . The increase in the monthly deficit in goods
and services primarily and services primarily reflected a larger reflected a larger ~~decrease~~increase in the nominal value of goods exports in the nominal value of goods exports ~~imports~~
relative to the value of imported goods. Nominal values for services trade relative to the value of imported goods. Nominal values for services trade ~~fell in~~ rose in smal percentage terms percentage terms
for exports for exports ~~while rising for~~and imports, as indicated in imports, as indicated in Figure 17..~~288~~292 According to BEA data, goods According to BEA data, goods
exports exports ~~decreased from $135.9 billion in January 2021 to $131.1 billion in February~~increased from $131.2 bil ion in February 2021 to $142.9 bil ion in March 2021 and 2021 and
goods imports goods imports ~~decreased from $221.1 billion to $219.1 billion; services exports and imports both~~
~~fell slightly.~~ increased from $219.2 bil ion to $234.4 bil ion. On a year-over-basis, the On a year-over-basis, the ~~overall~~ overal goods and services trade deficit in 2020 goods and services trade deficit in 2020 increased increased
by $105 by $105 ~~billion~~bil ion, or 18, or 18.2%, compared with 2019 and demonstrates the impact that 292 Monthly U.S. International Trade in Goods and Services, March 2021, Census Bureau, May 4, 2021. Congressional Research Service 76 Global Economic Effects of COVID-19 business lockdowns had on U.S. and global trade in the first quarter of 2020~~%, compared with 2019~~. Relative to 2019, U.S. goods exports in 2020 . Relative to 2019, U.S. goods exports in 2020 ~~fell~~
~~by 15.9~~fel by 13.2%, while goods imports %, while goods imports ~~fell~~ fel by 6.6%, accounting for the largest part of the increase in the by 6.6%, accounting for the largest part of the increase in the
annual U.S. trade balance. Services exports declined by 21% in annual U.S. trade balance. Services exports declined by 21% in 2020 relative to 2019, while services imports fel by 22%, reflecting the drop overal ~~2020 relative to 2019, while~~

~~288 Monthly U.S. International Trade in Goods and Services, February 2021, Census Bureau, April 7, 2021.~~
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~~services imports fell by 22%, reflecting the drop overall in services~~ in services activities as a result of activities as a result of
quarantines and business lockdowns. quarantines and business lockdowns.
Figure 17. Monthly U.S. Exports and Imports of Goods and Services 2020, 2021

Source: Census Bureau,Census Bureau, Bureau of Economic Analysis.Bureau of Economic Analysis. Created by CRS. Created by CRS.
On April On April 2, 2021, the BLS released data on the employment situation in March, which indicated 2, 2021, the BLS released data on the employment situation in March, which indicated
that nonfarm payroll rose by 916,000, up from the 468,000 jobs gained in February and pushed that nonfarm payroll rose by 916,000, up from the 468,000 jobs gained in February and pushed
the rate of unemployment down to 6.0%.the rate of unemployment down to 6.0%.~~289~~293 The data also indicate that 11.4 The data also indicate that 11.4 ~~million~~mil ion persons persons
reported in March they did not work at reported in March they did not work at ~~all~~ al or worked fewer hours at some point in the previous 4 or worked fewer hours at some point in the previous 4
weeks because their employer closed or lost business due to the pandemic. weeks because their employer closed or lost business due to the pandemic.
As indicated in As indicated in Figure 18, with the exception of December, the U.S. economy experienced , with the exception of December, the U.S. economy experienced
monthly gains in jobs since the loss of more than 20 monthly gains in jobs since the loss of more than 20 ~~million~~ mil ion jobs in April, 2020. In general, the jobs in April, 2020. In general, the
monthly gains in jobs has varied and by March 2021 had not equaled the number of jobs lost. The monthly gains in jobs has varied and by March 2021 had not equaled the number of jobs lost. The
number of unemployed workers was 9.7 number of unemployed workers was 9.7 ~~million~~mil ion in March 2021, down from the previous month’s in March 2021, down from the previous month’s
total of 10.0 total of 10.0 ~~million~~mil ion. Over the eleven–month period from May 2020 through March 2021, job . Over the eleven–month period from May 2020 through March 2021, job
gains were notable in the leisure and hospitality industry (particularly in food services and gains were notable in the leisure and hospitality industry (particularly in food services and
drinking establishments), retail trade, public-sector education and health services, health care and drinking establishments), retail trade, public-sector education and health services, health care and
social assistance, professional and business services, and other services, while employment in social assistance, professional and business services, and other services, while employment in
government (mostly state and local governments) government (mostly state and local governments) ~~fell.~~

~~289~~fel . 293 The Employment Situation-March 2021, Bureau of Labor Statistics, April 2, 2021. https://www.bls.gov/., Bureau of Labor Statistics, April 2, 2021. https://www.bls.gov/. ~~The~~ T he
unemployment number does not include 5.8 million workers who wereunemployment number does not include 5.8 million workers who were working part time not by choice and 6.9 million working part time not by choice and 6.9 million
individualsindividuals seeking employment. In addition, BLS indicated that some workers had been misclassifiedseeking employment. In addition, BLS indicated that some workers had been misclassified as employed, as employed,
but shouldbut should have been classifiedhave been classified as as unemployed, which wouldunemployed, which would have raisedhave raised ~~the rate~~ the rat e of unemployment by 0.4 percentage of unemployment by 0.4 percentage
points. points.
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Figure 18. Change in Total Monthly U.S. Nonfarm Employment

Source: Bureau of Labor Statistics.Bureau of Labor Statistics. Created by CRS. Created by CRS.
~~On May 8, 2020~~In the first stages of the pandemic, the Department of Labor reported , the Department of Labor reported on May 8, 2020, that the U.S. nonfarm unemployment rate in that the U.S. nonfarm unemployment rate in
April, 2020, increased by 20 April, 2020, increased by 20 ~~million,~~ mil ion, which raised the total which raised the total number of unemployed Americans 23 number of unemployed Americans 23
~~million,~~ mil ion, or an unemployment rate of 14% of a total civilian labor force of 156 or an unemployment rate of 14% of a total civilian labor force of 156 ~~million~~mil ion. The . The
unemployment rate did not include approximately 10 unemployment rate did not include approximately 10 ~~million~~ mil ion workers who were involuntarily workers who were involuntarily
working part-time and another 9 working part-time and another 9 ~~million individuals~~ mil ion individuals who were seeking employment. As indicated who were seeking employment. As indicated
in in Figure 19, the number of unemployed individuals increased the most in the leisure and , the number of unemployed individuals increased the most in the leisure and
~~hospitality~~ hospitality sector, reflecting national quarantining policies to reduce sector, reflecting national quarantining policies to reduce the spread of COVID-19 the spread of COVID-19
through social contact. The employment losses were widely spread through social contact. The employment losses were widely spread across the economy, affecting across the economy, affecting
every nonfarm sector and every nonfarm sector and ~~all~~ al labor groups.labor groups.
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Figure 19. Change in U.S. Employment by Major Industrial Sector

Source: The Employment Situation,, Bureau of Labor Statistics,Bureau of Labor Statistics, various months 2020 and 2021. Created by CRS. various months 2020 and 2021. Created by CRS.
In a speech on May 13, 2020, Federal Reserve Chairman Jerome In a speech on May 13, 2020, Federal Reserve Chairman Jerome ~~Powell~~ Powel reported that Federal reported that Federal
Reserve analyses indicated that of individuals working in February, 2020, “almost 40 percent of Reserve analyses indicated that of individuals working in February, 2020, “almost 40 percent of
those in households making less than $40,000 a year had lost a job in March.”those in households making less than $40,000 a year had lost a job in March.”~~290~~294 Chairman Chairman
~~Powell~~ Powel also indicated that given the extraordinary nature of the current economic downturn the also 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 Fed would, “continue to use our tools to their fullest until the crisis has passed and the economic
recovery is recovery is ~~well~~ wel under way.”under way.”
In characterizing the monetary and fiscal response to the economic downturn, Chairman In characterizing the monetary and fiscal response to the economic downturn, Chairman ~~Powell~~
Powel said in a speech on October 6, the monetary response included, “the full range of tools at our said in a speech on October 6, the monetary response included, “the full range of tools at our
disposal,” including cutting key interest rates, “unprecedented” asset purchases, establishing disposal,” including cutting key interest rates, “unprecedented” asset purchases, establishing
emergency lending facilities to support households, businesses and state and local governments, emergency lending facilities to support households, businesses and state and local governments,
and implementing targeted and temporary measures for banks to support their customers.and implementing targeted and temporary measures for banks to support their customers.~~291~~295 In In
addition, the fiscal response accomplished three objectives, it provided support to households, addition, the fiscal response accomplished three objectives, it provided support to households,
businesses through the Paycheck Protection Program, and financial markets. Chairman businesses through the Paycheck Protection Program, and financial markets. Chairman ~~Powell~~
Powel concluded his remarks arguing the necessity of continued fiscal support for the economy: concluded his remarks arguing the necessity of continued fiscal support for the economy:
The expansion is still far from complete. At this early stage, I would argue that the risks of The expansion is still far from complete. At this early stage, I would argue that the risks of
policy intervention are still asymmetric. Too little support would lead to a weak recovery, policy intervention are still asymmetric. Too little support would lead to a weak recovery,
creatingcreating ~~unnecessary hardship~~ unnecessary hardship for households and businesses.for households and businesses. Over time, household Over time, household

~~290~~ 294 Current Economic Issues; Speech; Speech at the Peterson Institute for International Economics, Jerome H. Powell, May 13, at the Peterson Institute for International Economics, Jerome H. Powell, May 13,
2020. 2020.
~~291~~295 Recent Economic Developments and the Challenges Ahead , Jerome H Powell, Remarks at the National Association Jerome H Powell, Remarks at the National Association
for Businessfor Business Economists, October 6, 2020. Economists, October 6, 2020.
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insolvencies and business bankruptcies would rise, harming the productive capacity of the insolvencies and business bankruptcies would rise, harming the productive capacity of the
economy, and holding back wage growth. By contrast, the risks of overdoing it seem, for economy, and holding back wage growth. By contrast, the risks of overdoing it seem, for
now, to be smaller. Even if policy actions ultimately prove to be greater than needed, they now, to be smaller. Even if policy actions ultimately prove to be greater than needed, they
willwill not go to waste.not go to waste.~~292~~296
Monetary ~~Policy293~~Policy297
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~~ tril ion. .
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...functioning and effective transmission of monetary policy.... ” These would be undertaken at the ” These would be undertaken at the
unprecedented rate of up to $125 unprecedented rate of up to $125 ~~billion~~bil ion daily during the week of March 23. As a result, the value 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 of the Fed’s balance sheet is projected to exceed its post-financial crisis peak of $4.5 ~~trillion~~tril ion. One . 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 maturities, so the effect likely ~~will~~ wil not be concentrated on long-term rates. 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 The Fed can temporarily provide liquidity to financial markets by lending cash through 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
were no longer needed, until they were revived in September 2019. On March 12, the Fed were no longer needed, until they were revived in September 2019. On March 12, the Fed

~~292 Ibid., p. 7.~~
~~293 This section was~~ 296 Ibid., p. 7. 297 T his section was prepared by Marc Labonte, Specialist in Macroeconomic Policy, Government and Finance prepared by Marc Labonte, Specialist in Macroeconomic Policy, Government and Finance
Division, CRS.Division, CRS. ~~CRS~~ CRS Insight IN11259, Insight IN11259, Federal Reserve: Recent Actions in Response to COVID-19, by Marc Labonte. , by Marc Labonte.
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announced it would offer a three-month repo of $500 announced it would offer a three-month repo of $500 ~~billion~~bil ion and a one-month repo of $500 and a one-month repo of $500
~~billion~~ bil ion on a weekly basis through the end of the month in addition to the shorter-term repos it had 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 (FIMA) Repo Facility, which works like the foreign repo pool in reverse. This facility ~~allows~~
al ows 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 basis. The Fed ~~will~~ wil charge a (charge a (~~typically~~typical y) above market interest rate of 0.25 percentage points above ) 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 availableswap lines to provide additional dollars to meet global demand and is available to a broader group 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~~ available through the Fed’s payment systems as a source of liquidity. 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 additionaltemporary facility to work in tandem with the swap lines to provide additional dollars to meet dollars to meet
global demand. The new facility global demand. The new facility ~~allows~~al ows central banks and international monetary authorities to 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 availablethen be made available to institutions in their jurisdictions.to institutions in their jurisdictions.~~294~~298
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 system to the ~~overall~~ overal financial system for the first time since the Great Depression. To create 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,

~~294~~ 298 For additional information about swap lines, see CRS For additional information about swap lines, see CRS In FocusIn Focus IF11489, 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 which is akin to a discount window for primary dealers. Like the discount
window, it provides short-term, fully collateralized loans to primary dealers. window, it provides short-term, fully collateralized loans to primary dealers.
 On March 19, the Fed created the Money Market Mutual Fund Liquidity Facility  On March 19, the Fed created the Money Market Mutual Fund Liquidity Facility
(MMLF), similar to a facility created during the 2008 financial crisis. The (MMLF), similar to a facility created during the 2008 financial crisis. The
MMLF makes loans to financial institutions to purchase assets that money MMLF makes loans to financial institutions to purchase assets that money
market funds are market funds are ~~selling~~sel ing to meet redemptions. 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  On April 6, the Fed announced the Payroll Protection Program Lending Facility 6, the Fed announced the Payroll Protection Program Lending Facility
(PPPLF) to provide credit to depository institutions (e.g., banks) making loans (PPPLF) to provide credit to depository institutions (e.g., banks) making loans
under the CARES Act (H.R. 748/P.L. 116-136) Payroll Protection Program. under the CARES Act (H.R. 748/P.L. 116-136) Payroll Protection Program.
Because banks are not required to hold capital against these loans, this facility Because banks are not required to hold capital against these loans, this facility
increases lending capacity for banks facing high demand to originate these loans. increases lending capacity for banks facing high demand to originate these loans.
The PPP provides low-cost loans to The PPP provides low-cost loans to ~~small~~ smal businesses to pay employees. These businesses to pay employees. These
loans do not pose credit risk to the Fed because they are guaranteed by the loans do not pose credit risk to the Fed because they are guaranteed by the ~~Small~~
Smal Business Administration. Business Administration.
 On April  On April 9, the Fed announced the Main Street Lending Program (MSLP), which 9, the Fed announced the Main Street Lending Program (MSLP), which
purchases loans from depository institutions to businesses with up to 10,000 purchases loans from depository institutions to businesses with up to 10,000
employees or up to $2.5 employees or up to $2.5 ~~billion~~ bil ion in revenues. The loans to businesses would defer in revenues. The loans to businesses would defer
principal and interest repayment for one year, and the businesses would have to principal and interest repayment for one year, and the businesses would have to
make a “reasonable effort” to retain employees. make a “reasonable effort” to retain employees.
 On April  On April 9, the Fed announced the Municipal Liquidity9, the Fed announced the Municipal Liquidity Facility (MLF) to Facility (MLF) to
purchase state and municipal debt in response to higher yields and reduced purchase state and municipal debt in response to higher yields and reduced
liquidityliquidity in that market. The facility in that market. The facility ~~will~~ wil only purchase debt of larger counties only purchase debt of larger counties
and cities. and cities.
Many of these facilities are structured as special purpose vehicles controlled by the Fed because Many of these facilities are structured as special purpose vehicles controlled by the Fed because
of restrictions on the types of securities that the Fed can purchase. Although there were no losses of restrictions on the types of securities that the Fed can purchase. Although there were no losses
from these facilities during the financial crisis, assets of the Treasury’s Exchange Stabilization from these facilities during the financial crisis, assets of the Treasury’s Exchange Stabilization
Fund have been pledged to backstop any losses on several of the facilities today. Fund have been pledged to backstop any losses on several of the facilities today.
Fiscal Policy
In terms of a fiscal stimulus, Congress adopted H.R. 6074 on March 5, 2020 (P.L. 116-123), to In terms of a fiscal stimulus, Congress adopted H.R. 6074 on March 5, 2020 (P.L. 116-123), to
appropriate $8.3 appropriate $8.3 ~~billion~~ bil ion in emergency funding to support efforts to fight COVID-19; President in emergency funding to support efforts to fight COVID-19; President
Trump signed the measure on March 6, 2020. President Trump also signed on March 18, H.R. Trump signed the measure on March 6, 2020. President Trump also signed on March 18, H.R.
6201 (P.L. 116-127), the Families First COVID-19 Response Act, that provides paid sick leave 6201 (P.L. 116-127), the Families First COVID-19 Response Act, that provides paid sick leave
and free COVID-19 testing, expands food assistance and unemployment benefits, and requires and free COVID-19 testing, expands food assistance and unemployment benefits, and requires
employers to provide additionalemployers to provide additional protections for health care workers. Other countries have protections for health care workers. Other countries have
indicated they indicated they ~~will~~ wil also provide assistance to workers and to some businesses. Congress also also provide assistance to workers and to some businesses. Congress also
considered other possible measures, including contingency plans for agencies to implement considered 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,~~295~~299 and extended of the tax filing deadline. and extended of the tax filing deadline.~~296~~300 President Trump took additional actions, President Trump took additional actions,
including including
 Announcing on March 11, 2020, restrictions on  Announcing on March 11, 2020, restrictions on ~~all~~ al travel from Europe to the travel from Europe to the
United States for 30 days, directing the United States for 30 days, directing the ~~Small~~ Smal Business Administration (SBA) to Business Administration (SBA) to
offer low-interest loans to offer low-interest loans to ~~small~~ smal businesses, and directing the Treasury businesses, and directing the Treasury
Department to defer tax payments penalty-free for affected businesses.Department to defer tax payments penalty-free for affected businesses.~~297~~
301  Declaring on March 13, a state of emergency that frees up disaster relief funding  Declaring on March 13, a state of emergency that frees up disaster relief funding
to assist state and local governments to address the effects of the pandemic. The to assist state and local governments to address the effects of the pandemic. The
President also announced additional testing for the virus, a website to help President also announced additional testing for the virus, a website to help
individualsindividuals identify symptoms, increased oil purchases for the Strategic Oil identify symptoms, increased oil purchases for the Strategic Oil
Reserve, and a waiver on interest payments on student loans.Reserve, and a waiver on interest payments on student loans.~~298~~
302  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.~~299~~303
On March 25, 2020, the Senate adopted the COVID-19 Aid, Relief, and Economic Security Act On March 25, 2020, the Senate adopted the COVID-19 Aid, Relief, and Economic Security Act
(S. 3548) to (S. 3548) to ~~formally~~formal y implement President Trump’s proposal by providing direct payments to implement President Trump’s proposal by providing direct payments to
taxpayers, loans and guarantees to airlines and other industries, and assistance for taxpayers, loans and guarantees to airlines and other industries, and assistance for ~~small~~
smal 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
 Provided funding for $1,200 tax rebates to individuals, with additional $500  Provided 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).
 Assisted  Assisted ~~small~~ smal businesses by providing funding forgivable bridge loans; and businesses by providing funding forgivable bridge loans; and
additional funding for grants and technical assistance; authorized emergency additional funding for grants and technical assistance; authorized emergency
loans to distressed businesses, including air carriers; and suspended certain loans to distressed businesses, including air carriers; and suspended certain
aviation excise taxes. aviation excise taxes.
 Created a $367  Created a $367 ~~billion~~ bil ion loan program for loan program for ~~small~~ smal businesses, established a $500 businesses, established a $500
~~billion~~ bil ion lending fund for industries, cities and states, $150 lending fund for industries, cities and states, $150 ~~billion~~bil ion for state and for state and
local stimulus funds, and $130 local stimulus funds, and $130 ~~billion~~bil ion for hospitals. for hospitals.

~~295 Armus, Theo~~ 299 Armus, T heo, “Federal, State Officials Attempt to Fight Virus , “Federal, State Officials Attempt to Fight Virus ~~Through Social~~ T hrough Social Distancing, StimulusDistancing, Stimulus Package,” 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/.
~~296~~300 Sevastopulo, Demetri, “US Sevastopulo, Demetri, “US ~~Treasury Considers Tax~~T reasury Considers T ax Filing Extension to Ease Virus Filing Extension to Ease Virus Impact,” 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.
~~297~~301 McAuley, James, and Michael Birnbaum, “Europe Blindsided McAuley, James, and Michael Birnbaum, “Europe Blindsided ~~by Trump’s Travel~~ by T rump’s T ravel Restrictions, with Many Seeing Restrictions, with Many Seeing
Political Motive,” Political Motive,” Washington Post, March 12, 2020. https://www.washingtonpost.com/world/europe/europe-, March 12, 2020. https://www.washingtonpost.com/world/europe/europe-
blindsided-by-trumps-travel-restrictions-with-many-seeing-political-motive/2020/03/12/42a279d0-6412-11ea-8a8e-blindsided-by-trumps-travel-restrictions-with-many-seeing-political-motive/2020/03/12/42a279d0-6412-11ea-8a8e-
5c5336b32760_story.html. 5c5336b32760_story.html.
~~298~~302 Fritz, Angela and Meryl Kornfield, “President Fritz, Angela and Meryl Kornfield, “President ~~Trump~~T rump Declares a National Emergency, Freeing $50 Billion in Declares a National Emergency, Freeing $50 Billion in
Funding,”Funding,” Washington Post, March 13, 2020. https://www.washingtonpost.com/world/2020/03/13/Covid-19-latest-, March 13, 2020. https://www.washingtonpost.com/world/2020/03/13/Covid-19-latest-
news/. news/.
~~299~~303 Hellmann, Jessie, Hellmann, Jessie, ~~“Trump~~ “T rump Invokes Defense Production Act as Covid-19 Response,” Invokes Defense Production Act as Covid-19 Response,” The Hill, March 18, 2020. , March 18, 2020.
https://thehill.com/policy/healthcare/488226-trump-invokes-defense-production-act-as-Covid-19-response. https://thehill.com/policy/healthcare/488226-trump-invokes-defense-production-act-as-Covid-19-response.
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 Increased unemployment insurance benefits, expanded eligibility  Increased unemployment insurance benefits, expanded eligibility and offered and offered
workers an additional $600 a week for four month, in addition to state workers an additional $600 a week for four month, in addition to state
unemployment programs.unemployment programs.~~300~~304
 Established special rules for certain tax-favored withdrawals from retirement  Established special rules for certain tax-favored withdrawals from retirement
plans; delayed due dates for employer payroll taxes and estimated tax payments plans; delayed due dates for employer payroll taxes and estimated tax payments
for corporations; and revised other provisions, including those related to losses, for corporations; and revised other provisions, including those related to losses,
charitable deductions, and business interest. charitable deductions, and business interest.
 Provided additional  Provided additional funding for the prevention, diagnosis, and treatment of funding for the prevention, diagnosis, and treatment of
COVID-19; limited COVID-19; limited ~~liability~~ liability for volunteer health care professionals; prioritized for volunteer health care professionals; prioritized
Food and Drug Administration (FDA) review of certain drugs; Food and Drug Administration (FDA) review of certain drugs; ~~allowed~~al ow ed
emergency use of certain diagnostic tests that had not been approved by the FDA; emergency use of certain diagnostic tests that had not been approved by the FDA;
expanded health-insurance coverage for diagnostic testing and required coverage expanded health-insurance coverage for diagnostic testing and required coverage
for preventative services and vaccines; and revised other provisions, including for preventative services and vaccines; and revised other provisions, including
those regarding the medical supply chain, the national stockpile, the health care those regarding the medical supply chain, the national stockpile, the health care
workforce, the Healthy Start program, telehealth services, nutrition services, workforce, the Healthy Start program, telehealth services, nutrition services,
Medicare, and Medicaid. Medicare, and Medicaid.
 Temporarily suspended payments for federal student loans and revised provisions  Temporarily suspended payments for federal student loans and revised provisions
related to campus-based aid, supplemental educational-opportunity grants, related to campus-based aid, supplemental educational-opportunity grants,
federal work-study, subsidized loans, federal work-study, subsidized loans, ~~Pell~~ Pel grants, and foreign institutions. grants, and foreign institutions.
 Authorized the Department of the Treasury temporarily to guarantee money-  Authorized the Department of the Treasury temporarily to guarantee money-
market funds. market funds.
On April On April 23, 2020, the House passed H.R. 266 (P.L. 116-139), the Paycheck Protection Program 23, 2020, the House passed H.R. 266 (P.L. 116-139), the Paycheck Protection Program
and Health Care Enhancement Act, following similar actions by the Senate the previous day. The and Health Care Enhancement Act, following similar actions by the Senate the previous day. The
measure provided $484 measure provided $484 ~~billion for small~~ bil ion for smal business loans, health care providers, and COVID-19 business loans, health care providers, and COVID-19
testing. In particular, the law testing. In particular, the law
 Provided additional  Provided additional lending authority for certain lending authority for certain ~~Small~~ Smal Business Administration Business Administration
(SBA) programs in response to COVID-19, increased the authority for: (1) the (SBA) programs in response to COVID-19, increased 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 to ~~small~~ smal businesses during the COVID-19 pandemic; and (2) advanced on businesses during the COVID-19 pandemic; and (2) advanced 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
provision also expanded eligibilityprovision also expanded eligibility for disaster loans and advances to include for disaster loans and advances to include
agricultural enterprises. agricultural enterprises.
 Provided $100  Provided $100 ~~billion~~ bil ion in FY2020 supplemental appropriations to HHS for the in FY2020 supplemental appropriations to HHS for the
Public Health and Social Services Emergency Fund, including $75 Public Health and Social Services Emergency Fund, including $75 ~~billion~~ bil ion to to
reimburse health care providers for health care related expenses or lost revenues reimburse health care providers for health care related expenses or lost revenues
that were attributable to the coronavirus outbreak; and $25 that were attributable to the coronavirus outbreak; and $25 ~~billion~~bil ion for expenses to for expenses to
research, develop, validate, manufacture, purchase, administer, and expand research, develop, validate, manufacture, purchase, administer, and expand
capacity for COVID-19 tests to effectively monitor and suppress COVID-19. capacity for COVID-19 tests to effectively monitor and suppress COVID-19.
  ~~Allocated~~Al ocated specified portions of the $25 specified portions of the $25 ~~billion~~ bil ion for COVID-19 testing to states, for COVID-19 testing to states,
localities, territories, and tribes; the Centers for Diseases Control and Prevention; localities, territories, and tribes; the Centers for Diseases Control and Prevention;
the National Institutes of Health; the Biomedical Advanced Research and the National Institutes of Health; the Biomedical Advanced Research and
Development Authority; the Food and Drug Administration; community health Development Authority; the Food and Drug Administration; community health
centers; rural health clinics; and testing for the uninsured. centers; rural health clinics; and testing for the uninsured.

~~300~~ 304 For additional information about unemployment and sick leave provisions, see CRS For additional information about unemployment and sick leave provisions, see CRS Insight IN11249, Insight IN11249, H.R. 6201:
Paid Leave and ~~Unemployment~~Unem ploym ent Insurance Responses to COVID-19, by Sarah, by Sarah A. Donovan, Katelin P. Isaacs, and Julie A. Donovan, Katelin P. Isaacs, and Julie
M. Whittaker, and CRSM. Whittaker, and CRS In Focus IF11487, In Focus IF11487, The ~~Families~~Fam ilies 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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On May 12, House Democrats introduced H.R. 6800, the Heroes Act, to provide a $3 On May 12, House Democrats introduced H.R. 6800, the Heroes Act, to provide a $3 ~~trillion~~tril ion
supplemental spending supplemental spending ~~bill~~ bil for additional financial resources to state and local governments. The for additional financial resources to state and local governments. The
measure passed the House on May 15 and was sent to the Senate for consideration. Among other measure passed the House on May 15 and was sent to the Senate for consideration. Among other
provisions, the provisions, the ~~bill~~ bil would have: would have:
 Appropriated $200  Appropriated $200 ~~billion~~ bil ion in hazard pay to essential workers. in hazard pay to essential workers.
 Extended additional Extended additional payments to individuals, for nutrition and housing payments to individuals, for nutrition and housing
assistance, and provide funding for additional testing and contact tracing. assistance, and provide funding for additional testing and contact tracing.
 Restored the tax deduction for state and local taxes.  Restored the tax deduction for state and local taxes.
 Provided FY2020 emergency supplemental appropriations to federal agencies.  Provided FY2020 emergency supplemental appropriations to federal agencies.
 Provided payments and other assistance to state, local, tribal, and territorial  Provided payments and other assistance to state, local, tribal, and territorial
governments. governments.
 Provided additional  Provided additional direct payments of up to $1,200 per individual. direct payments of up to $1,200 per individual.
 Expanded paid sick days, family and medical leave, unemployment  Expanded paid sick days, family and medical leave, unemployment
compensation, nutrition and food assistance programs, housing assistance, and compensation, nutrition and food assistance programs, housing assistance, and
payments to farmers. payments to farmers.
 Modified and expanded the Paycheck Protection Program, which provides loans  Modified and expanded the Paycheck Protection Program, which provides loans
and grants to and grants to ~~small~~ smal businesses and nonprofit organizations.businesses and nonprofit organizations.
 Expanded several tax credits and deductions.  Expanded several tax credits and deductions.
 Provided funding and establish requirements for COVID-19 testing and contact  Provided funding and establish requirements for COVID-19 testing and contact
tracing. tracing.
 Eliminated  Eliminated cost-sharing for COVID-19 treatments; cost-sharing for COVID-19 treatments;
 Extended and expanded the moratorium on certain evictions and foreclosures;  Extended and expanded the moratorium on certain evictions and foreclosures;
and and
 Required employers to develop and implement infectious disease exposure  Required employers to develop and implement infectious disease exposure
control plans. control plans.
On December 2, the Federal Reserve released its “Beige On December 2, the Federal Reserve released its “Beige Book”—a mostly qualitativeBook”—a mostly qualitative assessment assessment
of the U.S. economy produced 8 times a year by the 12 regional Federal Reserve banks—that of 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 in November had improved modestly, although was assessment indicated that economic activity in November had improved modestly, although was
~~negligible~~ negligible in some Districts.in some Districts.~~301~~
305 On December 27, 2020, President Trump signed the Consolidated Appropriations Act of 2021 On December 27, 2020, President Trump signed the Consolidated Appropriations Act of 2021
(P.L. 116-260) that provided funding for government operations and $900 (P.L. 116-260) that provided funding for government operations and $900 ~~billion~~bil ion in additional in additional
funding for COVID-19 related programs and a $1.4 funding for COVID-19 related programs and a $1.4 ~~trillion~~tril ion budget that comprised 12 budget that comprised 12
appropriations appropriations ~~bills~~bil s. In general, the measure provided: . In general, the measure provided:
 $600 in stimulus checks to qualifying individuals, including adults and children.  $600 in stimulus checks to qualifying individuals, including adults and children.
 Extended unemployment benefits of up to $300 per week through at least March  Extended unemployment benefits of up to $300 per week through at least March
14, 2021, and Pandemic Unemployment Assistance for qualifying individuals 14, 2021, and Pandemic Unemployment Assistance for qualifying individuals up up
to 11 weeks. to 11 weeks.
 Financial assistance to businesses, including forgivable Paycheck Protection  Financial assistance to businesses, including forgivable Paycheck Protection
Program loans, extensions of the PPP program to churches and the entertainment Program loans, extensions of the PPP program to churches and the entertainment
industry, and grants through the Economic Injury Disaster Loans program. industry, and grants through the Economic Injury Disaster Loans program.

~~301~~ 305 The Beige Book: Summary of Commentary on Current Economic Conditions by Federal Reserve District,, December December
2, 2020, the Federal Reserve2, 2020, the Federal Reserve System. System.
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 A moratorium on rental evictions through January 31, 2021, and emergency  A moratorium on rental evictions through January 31, 2021, and emergency
funding for renters. funding for renters.
 Funds to support vaccine production, distribution, and testing.  Funds to support vaccine production, distribution, and testing.
 Funds for schools, colleges, and child-care assistance.  Funds for schools, colleges, and child-care assistance.
 Assistance to the transportation industry through funds for busses, roads, airports,  Assistance to the transportation industry through funds for busses, roads, airports,
and Amtrak and assistance to the airline and Amtrak and assistance to the airline workers through the Payroll Support workers through the Payroll Support
Program. Program.
 On March 11, 2021, President Biden signed the American Rescue Plan Act (P.L.  On March 11, 2021, President Biden signed the American Rescue Plan Act (P.L.
117-2) that appropriated $1.9 117-2) that appropriated $1.9 ~~trillion~~tril ion to stimulating the U.S. economy. The major to stimulating the U.S. economy. The major
features of the Act include: features of the Act include:
 Extended expanded unemployment benefits with a $300 weekly supplement  Extended expanded unemployment benefits with a $300 weekly supplement
through September 6, 2021. through September 6, 2021.
 Provided $1,400 in direct payments to individuals  Provided $1,400 in direct payments to individuals making up to $75,000, making up to $75,000,
$112,500 for single parents, and $150,000 for couples. $112,500 for single parents, and $150,000 for couples.
 Provided emergency paid leave, expanded child tax credit up to $3,600 per child,  Provided emergency paid leave, expanded child tax credit up to $3,600 per child,
expanded child and dependent care credit, and earned income tax credit. expanded child and dependent care credit, and earned income tax credit.
 Provided over $50  Provided over $50 ~~billion~~ bil ion in grants and other payments to in grants and other payments to ~~small~~ smal businesses. businesses.
 $350  $350 ~~billion~~ bil ion in assistance to state, local, and tribal governments. in assistance to state, local, and tribal governments.
 Education funding: $130  Education funding: $130 ~~billion~~ bil ion for schools; $40 for schools; $40 ~~billion~~bil ion to colleges and to colleges and
universities. universities.
 Nearly $50  Nearly $50 ~~billion~~ bil ion in housing assistance, emergency rental assistance, in housing assistance, emergency rental assistance,
homeowner assistance, and other housing programs. homeowner assistance, and other housing programs.
 Over $160  Over $160 ~~billion~~ bil ion in health care-related programs, including COVID-19 in health care-related programs, including COVID-19
vaccines, testing, contact tracing and other health-care related funding. vaccines, testing, contact tracing and other health-care related funding.
 $50  $50 ~~billion~~ bil ion for transportation provisions, including funding for airports, airlines, for transportation provisions, including funding for airports, airlines,
Amtrak and other commuter rail services. Amtrak and other commuter rail services.
 $10.4  $10.4 ~~billion~~ bil ion for agriculture, including debt relief for farmers. for agriculture, including debt relief for farmers.
 $1.9  $1.9 ~~billion~~ bil ion to improve cybersecurity. to improve cybersecurity.
 Changes to other health care provisions.  Changes to other health care provisions.
Personal Income and Outlays
~~The Bureau of Economic Analysis (BEA) reported on May 29, 2020,~~Another metric for assessing the impact of the pandemic on the U.S. economy is provided through changes in personal income, consumption, and saving. Also, given the role transfer payments from the federal government to individuals have played in supporting household income, these transfers have provided an additional measure of the impact of lockdowns on business and consumer activity. On May 29, 2020, the Bureau of Economic Analysis (BEA) reported that U.S. personal income that U.S. personal income
rose by 12.0% in April, primarily reflecting a 100% increase rose by 12.0% in April, primarily reflecting a 100% increase in government in government transfer payments to payments to
individuals from federal economic recovery programs, as indicated in individuals from federal economic recovery programs, as indicated in Figure 20..306 During the During the
same period, personal consumption same period, personal consumption ~~fell~~ fel by 13% as consumers curtailed spending. The lower level by 13% as consumers curtailed spending. The lower level
of spending combined with income transfers, a portion of which households apparently deposited of spending combined with income transfers, a portion of which households apparently deposited
into saving accounts, raised the personal into saving accounts, raised the personal 306 Personal Income and Outlays, April 2020, Bureau of Economic Analysis, May 29, 2020. Congressional Research Service 86 Global Economic Effects of COVID-19 savings rate to 33.7% in April ~~savings rate to 33.7% in April~~ at an annual rate, at an annual rate,
compared to an annual rate of 8.2% in February compared to an annual rate of 8.2% in February 2020.2020.
~~In March~~ On April 30, 2021, BEA reported that personal income 2021, BEA reported that personal income ~~fell by 7.1% in February, after rising by~~
~~10.1% in January, in part reflecting a decrease of 22.4% in~~ rose by 21% in March, after fal ing by 7.0% in February.307 The rise in personal income similarly reflected an increase of 95% in government transfer payments government transfer payments in
~~February to $4.2 trillion, down from $5.8 trillion in January; transfer payments reached a monthly~~
~~high of $6.6 trillion in April 2020. Reflecting the fall in personal income and transfer payments,~~
~~personal consumption fell by 1.0% in February; the personal savings rate also fell in February to~~
~~13/6%, down from 19.8% in January. Although the personal saving rate was down from the high~~
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~~rate of 33.6% experienced in April 2020, it nevertheless represented a high rate of saving by~~
~~historical standards.~~
to $8.2 tril ion, compared with the previous month and exceeded the previous high of $6.6 tril ion set in April 2020. The increase in personal income supported an increase in personal consumption of 4.2%. During March, however, personal saving rose by 144% and nearly doubled the personal saving rate from 13.9% in February to 27.6% in March. For 2020, the annual personal saving rate reached 16.3%, more than double the 2019 rate of 7.5%. Figure 20. U.S. Personal Income, Consumption, and Saving

Source: Personal Income and Outlays, ~~February~~ February 2021, Bureau of Economic Analysis,, Bureau of Economic Analysis, March 26, 2021. Created by March 26, 2021. Created by
CRS. CRS.
GDP Output “Gap”
Another measure of the economic impact of the COVID-19 pandemic on the global economy is Another measure of the economic impact of the COVID-19 pandemic on the global economy is
represented by the difference between actual economic performance, measured by gross domestic represented by the difference between actual economic performance, measured by gross domestic
product (GDP), and potential output, or the maximum amount an economy can produce at full product (GDP), and potential output, or the maximum amount an economy can produce at full
307 Personal Income and Outlays, March 2020, Bureau of Economic Analysis, April 30, 2020. Congressional Research Service 87 Global Economic Effects of COVID-19 employment, referred to as the output gap.employment, referred to as the output gap.~~302~~308 The IMF estimated that the loss in economic output The IMF estimated that the loss in economic output
represented by the GDP output gap among major advanced economies, which as a group account represented by the GDP output gap among major advanced economies, which as a group account
for about 60% of global GDP, would be -3.6% in 2020, or that the economies operated at a rate for about 60% of global GDP, would be -3.6% in 2020, or that the economies operated at a rate
that was 3.6% below their combined potential, as indicated in that was 3.6% below their combined potential, as indicated in Table 9~~.303~~11.309 According to the IMF’s According to the IMF’s
assessment, not only would the major advanced economies as a group operate below their assessment, not only would the major advanced economies as a group operate below their full full
potential through 2025, but none of the individual economies was projected to operate above potential through 2025, but none of the individual economies was projected to operate above

~~302 According to the Congressional Budget Office, The output gap is the difference between GDP and potential GDP,~~
~~expressed as a percentage of potential GDP. A positive value indicates that GDP exceeds potential GDP; a negative~~
~~value indicates that GDP falls short of potential GDP. Values for the output gap are for the fourth quarter of each year.~~
~~303 World Economic Outlook, International Monetary Fund, October 2020, Table A.8.~~
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potential during the 2020-2025 forecasting period. The Euro are as a whole, and France and Italy potential during the 2020-2025 forecasting period. The Euro are as a whole, and France and Italy
in particular, were projected to experience the largest output gap through 2022. At 3.2% the U.S. in particular, were projected to experience the largest output gap through 2022. At 3.2% the U.S.
output gap was among the output gap was among the ~~smallest~~smal est of the major advanced economies. of the major advanced economies.
Table 1011. IMF Forecast of Major Advanced Economy GDP Output Gap
(in percentage terms) (in percentage terms)

Projected Projected

2017 2017
2018 2018
2019 2019
2020 2020
2021 2021
2022 2022
2023 2023
2024 2024
2025 2025
Major Advanced Major Advanced
–0.5% –0.5%
0.2% 0.2%
0.4% 0.4%
-3.6% -3.6%
-2.2% -2.2%
-1.0% -1.0%
-0.4% -0.4%
-0.2% -0.2%
-0.1% -0.1%
Economies Economies
United States United States
–1.0 –1.0
0.4 0.4
1.0 1.0
-3.2 -3.2
-1.5 -1.5
-0.5 -0.5
-0.2 -0.2
-0.1 -0.1
-0.1 -0.1
Euro Area Euro Area
–0.4 –0.4
0.2 0.2
0.1 0.1
-5.1 -5.1
-3.2 -3.2
-1.6 -1.6
-0.6 -0.6
-0.2 -0.2
0.0 0.0
Germany Germany
1.0 1.0
1.2 1.2
0.4 0.4
-3.5 -3.5
-1.8 -1.8
-0.7 -0.7
-0.2 -0.2
-0.1 -0.1
0.0 0.0
France France
–1.3 –1.3
–0.5 –0.5
0.0 0.0
-5.6 -5.6
-4.0 -4.0
-2.5 -2.5
-1.4 -1.4
-0.6 -0.6
0.0 0.0
Italy Italy
–1.2 –1.2
–0.7 –0.7
–0.7 –0.7
-5.4 -5.4
-5.4 -5.4
-2.6 -2.6
-0.9 -0.9
-0.6 -0.6
-0.5 -0.5
Japan Japan
–0.3 –0.3
–0.8 –0.8
–0.7 –0.7
-3.0 -3.0
-2.1 -2.1
-1.0 -1.0
-0.4 -0.4
0.0 0.0
0.0 0.0
United Kingdom United Kingdom
0.3 0.3
0.0 0.0
0.0 0.0
-3.9 -3.9
-3.5 -3.5
-1.7 -1.7
-1.0 -1.0
-0.5 -0.5
0.0 0.0
Canada Canada
0.4 0.4
0.6 0.6
0.4 0.4
-3.8 -3.8
-1.4 -1.4
-0.3 -0.3
-0.1 -0.1
0.0 0.0
0.0 0.0
Source: International Monetary Fund. International Monetary Fund.
Notes: The output gap is the difference between GDP and potential GDP, expressed The output gap is the difference between GDP and potential GDP, expressed as a percentage of as a percentage of
potential GDP. A positive value indicates that GDP exceeds potential GDP; a negative value indicates that GDP potential GDP. A positive value indicates that GDP exceeds potential GDP; a negative value indicates that GDP
~~falls~~fal s short of potential GDP. short of potential GDP.
On February 1, 2021, the Congressional Budget Office (CBO) issued an estimate of the impact of On February 1, 2021, the Congressional Budget Office (CBO) issued an estimate of the impact of
the COVID-19 pandemic on the U.S. GDP output gap and on other major indicators. the COVID-19 pandemic on the U.S. GDP output gap and on other major indicators. ~~304~~310 In the In the
forecast, the U.S. output gap in 2020 was estimated at 3.3%, the largest difference between the forecast, the U.S. output gap in 2020 was estimated at 3.3%, the largest difference between the
actual and potential output in the U.S. economy since the period following the 2008-2009 actual and potential output in the U.S. economy since the period following the 2008-2009
financial crisis, as indicated in financial crisis, as indicated in Figure 21. The CBO also estimated that the output gap following . The CBO also estimated that the output gap following
the financial crisis persisted from 2009-2016, reflecting the lengthy period of the recovery. In the the financial crisis persisted from 2009-2016, reflecting the lengthy period of the recovery. In the
current context, the CBO estimates that current context, the CBO estimates that
 a rise in vaccinations  a rise in vaccinations ~~will~~ wil lead to reductions in social distancing and an economic lead to reductions in social distancing and an economic
recovery; recovery;
 real GDP  real GDP ~~will~~ wil expand in 2021 and reach its pre-pandemic peak in mid-2021; expand in 2021 and reach its pre-pandemic peak in mid-2021;
~~ the labor force participation rate will recover, but lag behind the pre-pandemic~~
~~rate through the estimation period.305~~

~~304~~ ~~An Overview~~ 308 According to the Congressional Budget Office, T he output gap is the difference between GDP and potential GDP, expressed as a percentage of potential GDP. A positive value indicates that GDP exceeds potential GDP; a negative value indicates that GDP falls short of potential GDP. Values for the output gap are for the fourth quarter of each year. 309 World Economic Outlook, International Monetary Fund, October 2020, T able A.8. 310 An Overview of the Economic Outlook: 2021 to 2031, Congressional Budget Office, February 2021. , Congressional Budget Office, February 2021.
~~305 Ibid, p. 2.~~
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 the labor force participation rate wil recover, but lag behind the pre-pandemic rate through the estimation period.311
Figure 21. Real and Potential U.S. GDP and the Output Gap

Source: CongressionalCongressional Budget Office, February 2021. Created by CRS. Budget Office, February 2021. Created by CRS.
Notes: The output gap is the difference between GDP and potential GDP, expressed The output gap is the difference between GDP and potential GDP, expressed as a percentage of as a percentage of
potential GDP. A positive value indicates that GDP exceeds potential GDP; a negative value indicates that GDP potential GDP. A positive value indicates that GDP exceeds potential GDP; a negative value indicates that GDP
~~falls~~fal s short of potential GDP. Values for the output gap are for the fourth quarter of each year. short of potential GDP. Values for the output gap are for the fourth quarter of each year.
CBO also estimated that U.S. GDP would grow at an annual rate of 4.6% in 2021, but then CBO also estimated that U.S. GDP would grow at an annual rate of 4.6% in 2021, but then
~~generally~~general y trend downward to pre-pandemic rates in the 2024-2031 period, as indicated in trend downward to pre-pandemic rates in the 2024-2031 period, as indicated in Table
1012. The unemployment rate was also projected to peak in 2020 at 8.1%, but trend downward and . The unemployment rate was also projected to peak in 2020 at 8.1%, but trend downward and
reach the pre-pandemic rate in the 2024 to 2025 period. Similarly, the growth rates of exports and reach the pre-pandemic rate in the 2024 to 2025 period. Similarly, the growth rates of exports and
imports were projected imports were projected ~~fall~~ fal by 13% and 10%, respectively, in 2020, before growing at positive by 13% and 10%, respectively, in 2020, before growing at positive
rates through the forecast period. The CBO indicated, however, that its forecast was subject to a rates through the forecast period. The CBO indicated, however, that its forecast was subject to a
“high degree of uncertainty,” due to the uncertain course of the pandemic, the effectiveness of “high degree of uncertainty,” due to the uncertain course of the pandemic, the effectiveness of
monetary and fiscal policies, and the response of global financial markets to increases in public monetary and fiscal policies, and the response of global financial markets to increases in public
deficits and debt.deficits and debt.~~306~~312
Table 1112. Congressional Budget Office Projection of Major U.S. Economic Indicators,
2020 to 2031
(annual percentage changes) (annual percentage changes)

Average annual

2024-
2026-
2017 2017
2018 2018
2019 2019
2020
2021
2022
2023
2025
2031

Projected
Gross Gross Domestic Domestic
2.3% 2.3%
3.0% 3.0%
2.2% 2.2%
-3.4% -3.4%
4.6% 4.6%
2.9% 2.9%
2.2% 2.2%
2.1% 2.1%
1.6% 1.6%
Product (GDP) Product (GDP)
Potential GDP Potential GDP
1.6 1.6
1.8 1.8
1.9 1.9
1.9 1.9
1.9 1.9
1.9 1.9
1.9 1.9
1.8 1.8
1.7 1.7
~~Output Gap~~
~~0.0~~
~~0.6~~
~~1.0~~
~~-3.3~~
~~-1.3~~
~~-0.8~~
~~-0.4~~
~~0.4~~
~~-0.1~~
~~Civilian Unemp.~~
~~4.4~~
~~3.9~~
~~3.7~~
~~8.1~~
~~5.7~~
~~5.0~~
~~4.7~~
~~4.0~~
~~4.1~~
~~Rate~~

~~306 Ibid,~~ 311 Ibid, p. 2. 312 Ibid, p. 4. p. 4.
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Average annual

2024-
2026-
2017 2017
2018 2018
2019 2019
2020
2021
2022
2023
2025
2031

Projected Output Gap 0.0 0.6 1.0 -3.3 -1.3 -0.8 -0.4 0.4 -0.1 Civilian Unemp. 4.4 3.9 3.7 8.1 5.7 5.0 4.7 4.0 4.1 Rate
Labor Force Labor Force
62.9 62.9
62.9 62.9
63.1 63.1
61.7 61.7
61.9 61.9
62.1 62.1
62.0 62.0
61.7 61.7
61.1 61.1
Participation Rate Participation Rate
Exports Exports
3.9 3.9
3.0 3.0
-0.1 -0.1
-13.1 -13.1
11.3 11.3
5.4 5.4
2.5 2.5
2.0 2.0
1.6 1.6
Imports Imports
4.7 4.7
4.1 4.1
1.1 1.1
-10.0 -10.0
13.9 13.9
1.6 1.6
0.5 0.5
2.9 2.9
2.1 2.1
Source: An Overview An Overview of the Economic Outlook:of the Economic Outlook: 2021 to 20312021 to 2031, CongressionalCongressional Budget Office, February 2021. Budget Office, February 2021.
Federal Reserve Forecast
On March 17, 2021, the Federal Open Market Committee released a statement reiterating On March 17, 2021, the Federal Open Market Committee released a statement reiterating
previous assessments that, “The path of the economy previous assessments that, “The path of the economy ~~will~~ wil depend significantly on the course of depend significantly on the course of
the virus, including vaccinations. The ongoing public health crisis the virus, including vaccinations. The ongoing public health crisis ~~will~~ wil continue to weigh on continue to weigh on
economic activity, employment, and inflation in the near term, and poses considerable risks to the economic activity, employment, and inflation in the near term, and poses considerable risks to the
economic outlook over the medium term.”economic outlook over the medium term.”~~307~~313 The statement also indicated that, “Following a The statement also indicated that, “Following a
moderation in the pace of the recovery, indicators of economic activity and employment have moderation in the pace of the recovery, indicators of economic activity and employment have
turned up recently, although the sectors most adversely affected by the pandemic remain weak.” turned up recently, although the sectors most adversely affected by the pandemic remain weak.”
The Fed’s March 2021 forecast was more positive than that released in December 2020 with the The Fed’s March 2021 forecast was more positive than that released in December 2020 with the
annual rate of growth for 2021 forecasted at 6.5% compared with the December forecast of 4.2%, annual rate of growth for 2021 forecasted at 6.5% compared with the December forecast of 4.2%,
as indicated as indicated in ~~Table 12~~in Table 13.
In its forecast, the Federal Open Market Committee made three projections for such major In its forecast, the Federal Open Market Committee made three projections for such major
economic variables as GDP, the unemployment rate, and the personal consumption expenditure economic variables as GDP, the unemployment rate, and the personal consumption expenditure
(PCE) measure of inflation compared with its December 2020 projections of the same variables. (PCE) measure of inflation compared with its December 2020 projections of the same variables.
The three measures include (1) the median projected change; (2) the central tendency, which 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 forecasts excludes the highest and lowest three projections; and (3) the range, which indicates forecasts
from the highest to the lowest values. from the highest to the lowest values.
According to the March median forecast, U.S. GDP between 2021 and 2023 was projected grow According to the March median forecast, U.S. GDP between 2021 and 2023 was projected grow
at a faster rate than in the previous forecast; the unemployment rate could at a faster rate than in the previous forecast; the unemployment rate could ~~fall~~ fal to 4.5%, compared to 4.5%, compared
with a rate of 5.0%; the rate of inflation could rise by 0.6% above the rate forecasted in with a rate of 5.0%; the rate of inflation could rise by 0.6% above the rate forecasted in
December. The possible range for GDP, however could vary between 5.0% and 7.3% in 2021, December. The possible range for GDP, however could vary between 5.0% and 7.3% in 2021,
with a possible rate of unemployment between 4.0% and 6.8%. The Fed also indicated its with a possible rate of unemployment between 4.0% and 6.8%. The Fed also indicated its
intentions to continue purchasing Treasury securities at $80 intentions to continue purchasing Treasury securities at $80 ~~billion~~bil ion per month and its purchases of per month and its purchases of
mortgage-backed securities of at least $40 mortgage-backed securities of at least $40 ~~billion~~ bil ion a month, “until substantial further progress has a month, “until substantial further progress has
been made toward the Committee's (Federal Open Market Committee) maximum employment been made toward the Committee's (Federal Open Market Committee) maximum employment
and price stabilityand price stability goals.goals.~~308~~314
In previous statements, the FOMC has stated that the range of estimates is necessary to represent In previous statements, the FOMC has stated that the range of estimates is necessary to represent
the “extremely elevated” uncertainty related to the economic effects of the pandemic and the the “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 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~~

~~307~~ 313 Summary of Economic Projections, Board of Governors of the Federal Reserve System, March 17, 2020. Board of Governors of the Federal Reserve System, March 17, 2020.
https://www.federalreserve.gov/newsevents/pressreleases/monetary20201216a.htm https://www.federalreserve.gov/newsevents/pressreleases/monetary20201216a.htm
~~308~~314 Federal Reserve Issues Federal Reserve Issues FOMC Statement, Board of Governors of the Federal System,FOMC Statement, Board of Governors of the Federal System, March 17, 2021. March 17, 2021.
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limited 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 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). pessimistic projection was judged to be no less pessimistic than the baseline scenario (median).
Another member of the Fed recently stated the pandemic-related economic crisis should be used Another member of the Fed recently stated the pandemic-related economic crisis should be used
to distil ~~to distill~~ lessons and “institute reforms so our system is more resilient and better able to withstand lessons and “institute reforms so our system is more resilient and better able to withstand
a variety of possible shocks in the future, including those emanating from outside the financial a variety of possible shocks in the future, including those emanating from outside the financial
system.system.~~309~~315
Table 1213. Federal Reserve Economic Projections, March 2021
Percentage change, fourth quarter over previous year fourth quarter Percentage change, fourth quarter over previous year fourth quarter

Core Core
Change in Change in ~~December~~ December Unemploy-Unemploy-
December December
PCE PCE
December December
PCE PCE
December December
real GDP real GDP
projection projection
ment rate ment rate
projection projection inflation projection inflation projection
inflation inflation
projection projection
Median1 Median1
2021 2021
6.5 6.5
4.2 4.2
4.5 4.5
5.0 5.0
2.4 2.4
1.8 1.8
2.2 2.2
1.8 1.8
2022 2022
3.3 3.3
3.2 3.2
3.9 3.9
4.2 4.2
2.0 2.0
1.9 1.9
2.0 2.0
1.9 1.9
2023 2023
2.2 2.2
2.4 2.4
3.5 3.5
3.7 3.7
2.1 2.1
2.0 2.0
2.1 2.1
2.0 2.0
Longer Longer
1.8 1.8
1.8 1.8
4 4
4.1 4.1
2.0 2.0
2.0 2.0

run run
Central Tendency2 Central Tendency2
2021 2021
5.8-6.6 5.8-6.6
3.7-5.0 3.7-5.0
4.2-4.7 4.2-4.7
4.7-5.4 4.7-5.4
2.2-2.4 2.2-2.4
1.7-1.9 1.7-1.9
2.0-2.3 2.0-2.3
1.7-1.8 1.7-1.8
2022 2022
3.0-3.8 3.0-3.8
3.0-3.5 3.0-3.5
3.6-4.0 3.6-4.0
3.8-4.6 3.8-4.6
1.8-2.1 1.8-2.1
1.8-2.0 1.8-2.0
1.9-2.1 1.9-2.1
1.8-2.0 1.8-2.0
2023 2023
2.0-2.5 2.0-2.5
2.2-2.7 2.2-2.7
3.2-3.8 3.2-3.8
3.5-4.3 3.5-4.3
2.0-2.2 2.0-2.2
1.9-2.1 1.9-2.1
2.0-2.2 2.0-2.2
1.9-2.1 1.9-2.1
Longer Longer
1.8-2.0 1.8-2.0
1.7-2.0 1.7-2.0
3.8-4.3 3.8-4.3
3.9-4.3 3.9-4.3
2.0 2.0
2.0 2.0

run run
Range3 Range3
2021 2021
5.0-7.3 5.0-7.3
0.5-5.5 0.5-5.5
4.0-5.5 4.0-5.5
4.0-6.8 4.0-6.8
2.1-2.6 2.1-2.6
1.2-2.3 1.2-2.3
1.9-2.5 1.9-2.5
1.5-2.3 1.5-2.3
2022 2022
2.5-4.4 2.5-4.4
2.5-4.0 2.5-4.0
3.2-4.2 3.2-4.2
3.5-5.8 3.5-5.8
1.8-2.3 1.8-2.3
1.5-2.2 1.5-2.2
1.8-2.3 1.8-2.3
1.6-2.2 1.6-2.2
2023 2023
1.7-2.6 1.7-2.6
2.0-3.5 2.0-3.5
3.0-4.0 3.0-4.0
3.3-5.0 3.3-5.0
1.9-2.3 1.9-2.3
1.7-2.2 1.7-2.2
1.9-2.3 1.9-2.3
1.7-2.2 1.7-2.2
Source: SummarySummary of Economic Projections,of Economic Projections, March 17, 2021.March 17, 2021.
Notes: (1) For each period, the median is the middle projection (1) For each period, the median is the middle projection when the projectionswhen the projections are arranged from lowest are arranged from lowest
to highest. (2) The central tendency excludes the three highest and three lowest projectionsto highest. (2) The central tendency excludes the three highest and three lowest projections for each variable in for each variable in
each year. (3) The range for a variable in a given year includes each year. (3) The range for a variable in a given year includes ~~all~~ al participants’ projections,participants’ projections, from lowest to from lowest to
highest, for that variable in that year. Projections for the unemployment rate representhighest, for that variable in that year. Projections for the unemployment rate represent the average civilian 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 scenarios316~~three scenarios310~~ 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-19.311 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”~~

~~309~~ 315 Brainard, Lael, Some Brainard, Lael, Some Preliminary Financial Stability Lessons From the COVIDPreliminary Financial Stability Lessons From the COVID -19 Shock, At the 2021 Annual -19 Shock, At the 2021 Annual
Washington Conference, Institute of International Bankers March 1, 2021. Washington Conference, Institute of International Bankers March 1, 2021.
~~310 The~~316 T he three scenarios include (1) a rapid, or “V”-shaped recovery; (2) a slower, or “U”-shaped recovery; and (3) a 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“W”-shaped or double-dip recession with a shortrecession with a short -lived recovery followed by a severe drop in activity later this year due -lived recovery followed by a severe drop in activity later this year due
to a second COVIDto a second COVID event. event. ~~Assessment~~Assessm ent 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.
~~311 Ibid.~~
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caused by COVID-19.317 The Fed reported that al large U.S. banks were “sufficiently 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, first and second scenarios, ~~all~~ al of the banks would remain of the banks would remain ~~well~~ wel above their minimum capital ratios, 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.~~312~~318 As a result, the Fed announced that it As a result, the Fed announced that it ~~will~~
wil  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 in 2020 as data from banks become  conduct additional stress analyses later in 2020 as data from banks become
available available and economic conditions evolve.and economic conditions evolve.~~313~~319
Other Developments
The Department of Labor announced on July 2 that an additional 1.4 The Department of Labor announced on July 2 that an additional 1.4 ~~million~~mil ion Americans had filed Americans had filed
for Unemployment Insurance, raising the total to 48.7 for Unemployment Insurance, raising the total to 48.7 ~~million~~ mil ion over the 15-week period from mid-over the 15-week period from mid-
March.March.~~314~~320 The insured The insured ~~seasonally~~seasonal y adjusted unemployment rate in June was estimated at 13.2%, 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 nonfarm payroll rose by 4.8 the employment situation in June, indicating that nonfarm payroll rose by 4.8 ~~million~~mil ion, lowering , lowering
the unemployment rate to 11.5%.the unemployment rate to 11.5%.~~315~~321 The unemployment number does not include 9.1 The unemployment number does not include 9.1 ~~million~~mil ion
individualsindividuals working part time who would prefer to work full time and 8.2 working part time who would prefer to work full time and 8.2 ~~million individuals~~ mil ion individuals who 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
individualsindividuals who were misclassified as being employed, but absent due to temporary, pandemic who were misclassified as being employed, but absent due to temporary, pandemic
closures. Had the individualsclosures. Had the individuals been classified as unemployed, the been classified as unemployed, the ~~overall~~ overal unemployment rate 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 U.S. goods and services trade deficit in May was $54.6 ~~billion~~bil ion, up 9.7% from the April deficit as , 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.~~316~~322 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.
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 August 13, the Department of Labor announced that over the 21-week period from mid-March On August 13, the Department of Labor announced that over the 21-week period from mid-March
to the beginning of August 2020, 56 to the beginning of August 2020, 56 ~~million~~mil ion Americans filed for unemployment insurance. Americans filed for unemployment insurance.~~317 On~~
~~a seasonally adjusted basis, the number of insured unemployed workers was 15.5 million in early~~
~~August, down from a peak of 25 million in mid-May. The total number of people claiming~~

~~312 Ibid., p. 2.~~
~~313 Ibid., pp. 1-2.~~
~~314~~323 On 317 Ibid. 318 Ibid., p. 2. 319 Ibid., pp. 1-2. 320 Unemployment Insurance Weekly Claims, July, July 1, 2020. https://www.dol.gov/ui/data.pdf. 1, 2020. https://www.dol.gov/ui/data.pdf.
~~315~~321 The Employment Situation—June 2020, Bureau of Labor Statistics, July 2, 2020. , Bureau of Labor Statistics, July 2, 2020.
~~316~~322 Monthly U.S. International Trade in Goods and Services, May 2020 , U.S. Census, U.S. Census Bureau,Bureau, July 2, 2020. July 2, 2020.
~~317~~323 Unemployment Insurance Weekly Claims, Department of Labor, August 13, 2020. https://www.dol.gov/;, Department of Labor, August 13, 2020. https://www.dol.gov/; Romm, Romm,
~~Tony~~T ony and Jeff Stein, 2.4 Million Americans Filed and Jeff Stein, 2.4 Million Americans Filed ~~Jobless Claims~~ Jobless Claims Last Week, BringingLast Week, Bringing Nine Week Nine Week ~~Total~~T otal to 38.6 to 38.6
Million, Million, Washington Post, May 21, 2020. https://www.washingtonpost.com/business/2020/05/21/unemployment- May 21, 2020. https://www.washingtonpost.com/business/2020/05/21/unemployment-
claims-coronavirus/ claims-coronavirus/
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~~benefits in all~~ a seasonal y adjusted basis, the number of insured unemployed workers was 15.5 mil ion in early August, down from a peak of 25 mil ion in mid-May. The total number of people claiming benefits in al programs in the week ending July 25, totaled 28.3 programs in the week ending July 25, totaled 28.3 ~~million~~mil ion, up from 1.7 , up from 1.7 ~~million~~mil ion in in
the comparable week in 2019. The insured unemployment rate was 10.6%, also down from the the comparable week in 2019. The insured unemployment rate was 10.6%, also down from the
peak reached in early May. peak reached in early May.
On August 20, the European Central, the Bank of England, the Bank of Japan, and the Swiss On August 20, the European Central, the Bank of England, the Bank of Japan, and the Swiss
National Bank jointlyNational Bank jointly announced they would reduce their emergency dollar swap operations with announced they would reduce their emergency dollar swap operations with
the Fed to once a week, down from three, as a result of reduced demand for dollars. On a broad the Fed to once a week, down from three, as a result of reduced demand for dollars. On a broad
dollar trade weighted index for goods and services, the dollar has depreciated by 7.2% since the dollar trade weighted index for goods and services, the dollar has depreciated by 7.2% since the
high value reached on March 23 2020. Reportedly, the shift by the central banks reflects market high value reached on March 23 2020. Reportedly, the shift by the central banks reflects market
sentiment that the global financial system has recovered from the initial negative impact of the sentiment that the global financial system has recovered from the initial negative impact of the
pandemic experienced in the first quarter of 2020.pandemic experienced in the first quarter of 2020.~~318~~
324 On August 27, the DOL announced that over the 23-week period from mid-March to late August On August 27, the DOL announced that over the 23-week period from mid-March to late August
2020, 58.4 2020, 58.4 ~~million~~mil ion Americans filed for unemployment insurance. Americans filed for unemployment insurance.~~319 On a seasonally~~325 On a seasonal y adjusted adjusted
basis, the number of insured unemployed workers was 14.5 basis, the number of insured unemployed workers was 14.5 ~~million~~mil ion in mid-August, down from a in mid-August, down from a
peak of 25 peak of 25 ~~million~~ mil ion in mid-May. The total number of people claiming benefits in in mid-May. The total number of people claiming benefits in ~~all~~ al programs in programs in
the week ending August 8, totaled 27 the week ending August 8, totaled 27 ~~million~~mil ion, up from 1.6 , up from 1.6 ~~million~~mil ion in the comparable week in in the comparable week in
2019. The insured unemployment rate was 9.9%, also down from the peak reached in early May. 2019. The insured unemployment rate was 9.9%, also down from the peak reached in early 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..~~320~~
326 Europe
In the early stages of the pandemic, European countries did not adopt a synchronized fiscal policy In the early stages of the pandemic, European countries did not adopt a synchronized fiscal policy
response similar to the one they developed during the 2008-2009 global financial crisis. That response similar to the one they developed during the 2008-2009 global financial crisis. That
response changed with the adoption of the €750 response changed with the adoption of the €750 ~~billion~~bil ion pandemic economic recovery package, pandemic economic recovery package,
termed the Next Generation EU (NGEU), in July 2020. For the most part, EU members have used termed the Next Generation EU (NGEU), in July 2020. For the most part, EU members have used
a combination of national fiscal policies and bond buying by the ECB to address the economic a combination of national fiscal policies and bond buying by the ECB to address the economic
impact of the pandemic. Individual countries have adopted quarantines and required business impact of the pandemic. Individual countries have adopted quarantines and required business
closures, travel and border restrictions, tax holidays for businesses, extensions of certain closures, travel and border restrictions, tax holidays for businesses, extensions of certain
payments and loan guarantees, and subsidies for workers and businesses. The European payments and loan guarantees, and subsidies for workers and businesses. The European
Commission has advocated for greater coordination among the EU members in developing and Commission has advocated for greater coordination among the EU members in developing and
implementing monetary and fiscal policies to address the economic implementing monetary and fiscal policies to address the economic ~~fallout~~fal out from the viral from the viral
pandemic.pandemic.
In its February 2021 economic forecast, the European Commission projected that EU GDP In its February 2021 economic forecast, the European Commission projected that EU GDP
growth rate would rise by 3.7% in 2021, after growth rate would rise by 3.7% in 2021, after ~~falling~~fal ing by 6.3% in 2020, nearly a full percentage by 6.3% in 2020, nearly a full percentage
point lower than it had estimated in its Autumn forecast of -7.4%, as indicated point lower than it had estimated in its Autumn forecast of -7.4%, as indicated inin Table 1314. The The
Commission indicated the EU economy was weaker in the Commission indicated the EU economy was weaker in the ~~fall~~ fal of 2020 and weaker going into of 2020 and weaker going into
2021 than its earlier forecast had indicated as a result of a resurgence of COVID-19 cases and the 2021 than its earlier forecast had indicated as a result of a resurgence of COVID-19 cases and the
emergence of new, more virulent strains of the virus in the emergence of new, more virulent strains of the virus in the ~~fall~~ fal that led countries to re-impose 324 Arnold, Martin and Eva Szalay, Central Banks Scale Back Dollar Lending Operation as Demand Drops, Financial Tim es, August ~~that led countries to re-impose~~
~~restrictions. The Commission concluded, however, that the outlook for the EU economy had~~
~~improved since its November 2020 forecast due to the development of vaccines and the pace of~~

~~318 Arnold, Martin and Eva Szalay, Central Banks Scale Back Dollar Lending Operation as Demand Drops,~~ ~~Financial~~
~~Times, August~~ 20, 2020. https://www.ft.com/content/210ef737-2628-4431-bd6b-456aa65b2024. 20, 2020. https://www.ft.com/content/210ef737-2628-4431-bd6b-456aa65b2024.
~~319~~325 Unemployment Insurance Weekly Claims, Department of Labor, August 27, 2020. https://www.dol.gov/;, Department of Labor, August 27, 2020. https://www.dol.gov/; Romm, Romm,
~~Tony~~T ony and Jeff Stein, 2.4 Million Americans Filed and Jeff Stein, 2.4 Million Americans Filed ~~Jobless Claims~~ Jobless Claims Last Week, BringingLast Week, Bringing Nine Week Nine Week ~~Total~~T otal to 38.6 to 38.6
Million, Million, Washington Post, May 21, 2020. https://www.washingtonpost.com/business/2020/05/21/unemployment- May 21, 2020. https://www.washingtonpost.com/business/2020/05/21/unemployment-
claims-coronavirus/ claims-coronavirus/
~~320~~326 CRS CRS Insight IN11235, Insight IN11235, COVID-19: Potential Economic Effects, by Marc Labonte. , by Marc Labonte.
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restrictions. The Commission concluded, however, that the outlook for the EU economy had improved since its November 2020 forecast due to the development of vaccines and the pace of vaccinations. The economic impact of the renewed lockdowns was projected to be unequal across vaccinations. The economic impact of the renewed lockdowns was projected to be unequal across
EU members due to differences in the stringency of containment measures, the severity of the EU members due to differences in the stringency of containment measures, the severity of the
infections and differences in economic institutions and policy responses.infections and differences in economic institutions and policy responses.~~321~~
327 The Commission forecast assumes that trade activity in the EU and the UK The Commission forecast assumes that trade activity in the EU and the UK ~~will~~ wil be negatively be negatively
affected beginning in January 2021 due to the UK withdrawal from the EU. By country, Spain, affected beginning in January 2021 due to the UK withdrawal from the EU. By country, Spain,
France, Italy, Portugal, and Greece are forecasted to experience the largest declines in GDP in France, Italy, Portugal, and Greece are forecasted to experience the largest declines in GDP in
2020 due to a number of factors, including a dependence on tourism, which is expected to 2020 due to a number of factors, including a dependence on tourism, which is expected to
experience a slow economic recovery. Germany and other Northern European countries are experience a slow economic recovery. Germany and other Northern European countries are
projected to experience a more modest decline in economic activity. Some analysts argue that this projected to experience a more modest decline in economic activity. Some analysts argue that this
disparity in economic effects may complicate efforts to coordinate economic policies.disparity in economic effects may complicate efforts to coordinate economic policies.~~322~~
328 In assessing the In assessing the ~~challenge~~chal enge of the crisis, the Commission argued that, “[t]he risk … is that the of the crisis, the Commission argued that, “[t]he risk … is that the
crisis crisis ~~will~~ wil lead to severe distortions within the Single Market and to entrenched economic, lead to severe distortions within the Single Market and to entrenched economic,
financial and social divergences between euro area Member States that could ultimately threaten financial and social divergences between euro area Member States that could ultimately threaten
the stability of the Economic and Monetary Union.”the stability of the Economic and Monetary Union.”~~323~~329 The Commission estimated that European The Commission estimated that European
countries would emerge from the recession at different rates and different paths, reflecting countries would emerge from the recession at different rates and different paths, reflecting
differences in the timing of when social distancing measures were introduced and removed, differences in the timing of when social distancing measures were introduced and removed,
dependency on tourism, and the magnitude and effectiveness of economic policies. The dependency on tourism, and the magnitude and effectiveness of economic policies. The
Commission also noted the rise in saving among EU households that it argued is mostly Commission also noted the rise in saving among EU households that it argued is mostly
involuntary, rather than precautionary and was projected to revert to pre-crisis levels once involuntary, rather than precautionary and was projected to revert to pre-crisis levels once
consumers resumed their regular spending patterns. consumers resumed their regular spending patterns.
Table 1314. European Commission Economic Forecast
Percentage change, real GDP Percentage change, real GDP

Winter Winter Forecast 2021 Forecast 2021
Autumn Forecast 2020 Autumn Forecast 2020
Summer Summer Forecast 2020 Forecast 2020
2021 2021
2022 2022
2020 2020
2021 2021
2022 2022
2020 2020
2021 2021

EU EU
3.7 3.7
3.9 3.9
-7.4 -7.4
4.1 4.1
3.0 3.0
-7.4 -7.4
6.1 6.1
Euro area Euro area
3.8 3.8
3.8 3.8
-7.8 -7.8
4.2 4.2
3.0 3.0
-7.7 -7.7
6.3 6.3
Belgium Belgium
3.9 3.9
3.1 3.1
-8.4 -8.4
4.1 4.1
3.5 3.5
-7.2 -7.2
6.7 6.7
Germany Germany
3.2 3.2
3.1 3.1
-5.6 -5.6
3.5 3.5
2.6 2.6
-6.5 -6.5
5.9 5.9
Ireland Ireland
3.4 3.4
3.5 3.5
-2.3 -2.3
2.9 2.9
2.6 2.6
-7.9 -7.9
6.1 6.1
Greece Greece
3.5 3.5
5.0 5.0
-9.0 -9.0
5.0 5.0
3.5 3.5
-9.7 -9.7
7.9 7.9
Spain Spain
5.6 5.6
5.3 5.3
-12.4 -12.4
5.4 5.4
4.8 4.8
-9.4 -9.4
7.0 7.0
France France
5.5 5.5
4.4 4.4
-9.4 -9.4
5.8 5.8
3.1 3.1
-8.2 -8.2
7.4 7.4
Italy Italy
3.4 3.4
3.5 3.5
-9.9 -9.9
4.1 4.1
2.8 2.8
-9.5 -9.5
6.5 6.5
Luxembourg Luxembourg
3.2 3.2
4.3 4.3
-4.5 -4.5
3.9 3.9
2.7 2.7
-5.4 -5.4
5.7 5.7
Malta Malta
4.5 4.5
5.4 5.4
-7.3 -7.3
3.0 3.0
6.2 6.2
-5.8 -5.8
6.0 6.0
Netherlands Netherlands
1.8 1.8
3.0 3.0
-5.3 -5.3
2.2 2.2
1.9 1.9
-6.8 -6.8
5.0 5.0
~~Austria~~
~~2.0~~
~~5.1~~
~~-7.1~~
~~4.1~~
~~2.5~~
~~-5.5~~
~~5.0~~

~~321~~ 327 European Economic Forecast Winter 2021, European Commission, February 2021, p. 1. , European Commission, February 2021, p. 1.
~~322~~328 Birnbaum, Michael, European Union Says Birnbaum, Michael, European Union Says ~~That~~ T hat Pandemic Recession Will be Worst in its History, Pandemic Recession Will be Worst in its History, Washington Post,
May 6, 2020. https://www.washingtonpost.com/world/european-union-says-pandemic-recession-will-be-worst-in-its-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. history/2020/05/06/e787a70e-8f96-11ea-9322-a29e75effc93_story.html.
~~323~~329 European Economic Forecast Autumn 2020. .
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Winter Winter Forecast 2021 Forecast 2021
Autumn Forecast 2020 Autumn Forecast 2020
Summer Summer Forecast 2020 Forecast 2020
2021 2021
2022 2022
2020 2020
2021 2021
2022 2022
2020 2020
2021 2021

Austria 2.0 5.1 -7.1 4.1 2.5 -5.5 5.0 Portugal Portugal
4.1 4.1
4.3 4.3
-9.3 -9.3
5.4 5.4
3.5 3.5
-6.8 -6.8
5.8 5.8
Finland Finland
2.8 2.8
2.0 2.0
-4.3 -4.3
2.9 2.9
2.2 2.2
-6.3 -6.3
3.7 3.7
Denmark Denmark
2.9 2.9
3.6 3.6
-3.9 -3.9
3.5 3.5
2.4 2.4
-5.9 -5.9
5.1 5.1
Sweden Sweden
2.7 2.7
4.0 4.0
-3.4 -3.4
3.3 3.3
2.4 2.4
-6.1 -6.1
4.3 4.3
World World
5.2 5.2
3.8 3.8
-3.8 -3.8
4.7 4.7
3.7 3.7
-3.9 -3.9
4.9 4.9
Source: European Economic Forecast Autumn 2020, European Commission,, European Commission, November 2020. November 2020.
Pandemic-related economic effects have had significant negative effects on business activity in Pandemic-related economic effects have had significant negative effects on business activity in
Europe, with some business activity indexes Europe, with some business activity indexes ~~falling~~fal ing farther then they had during the height of the farther then they had during the height of the
financial crisis and others indicating that Europe experienced a deep economic recession in the financial crisis and others indicating that Europe experienced a deep economic recession in the
first half of 2020.first half of 2020.~~324~~330 EU countries issued travel warnings and banned EU countries issued travel warnings and banned ~~all~~ al but essential travel across but essential travel across
borders, which raised concerns that even much-needed medical supplies could borders, which raised concerns that even much-needed medical supplies could ~~stall~~ stal at borders at borders
affected by traffic backups.affected by traffic backups.~~325~~331 The travel bans and border closures reportedly caused temporary The travel bans and border closures reportedly caused temporary
shortages of farm laborers in Germany, the UK, and Spain. In response, farm growers attempted shortages of farm laborers in Germany, the UK, and Spain. In response, farm growers attempted
to recruit students and workers who had been laid off due to the pandemic.to recruit students and workers who had been laid off due to the pandemic.~~326~~332
According to data released by Eurostat in April, 2021, the EU rate of GDP growth during the According to data released by Eurostat in April, 2021, the EU rate of GDP growth during the
second quarter of 2020 contracted by 11.2% in the EU and by 11.6% in the Euro area from the second quarter of 2020 contracted by 11.2% in the EU and by 11.6% in the Euro area from the
previous quarter, reflecting negative rates of growth across previous quarter, reflecting negative rates of growth across ~~all~~ al EU countries, as indicated in EU countries, as indicated in Table
1415. In contrast, the EU and the Euro area grew by 11.6% and 12.5%, respectively, in the third . In contrast, the EU and the Euro area grew by 11.6% and 12.5%, respectively, in the third
quarter. Compared with growth during the third quarter in the previous year, however, EU and quarter. Compared with growth during the third quarter in the previous year, however, EU and
Euro area growth rates were down 4.1% and 4.2%, respectively. During the fourth quarter, the Euro area growth rates were down 4.1% and 4.2%, respectively. During the fourth quarter, the
rate of economic growth declined by 0.5% in the EU and by 0.7% in the Euro area as a result of a rate of economic growth declined by 0.5% in the EU and by 0.7% in the Euro area as a result of a
lessening in business lockdowns during the period that raises the prospects of positive rate of lessening in business lockdowns during the period that raises the prospects of positive rate of
growth across most EU countries in the first quarter of 2021. At 18.8%, the United Kingdom growth across most EU countries in the first quarter of 2021. At 18.8%, the United Kingdom
experienced the largest contraction in its GDP growth rate in the second quarter compared with experienced the largest contraction in its GDP growth rate in the second quarter compared with
the previous quarter among European countries, but third quarter growth rate rebounded by the previous quarter among European countries, but third quarter growth rate rebounded by
16.6%, the third fastest rate behind France and Spain. 16.6%, the third fastest rate behind France and Spain.
Table 1415. EU Real GDP Growth Rates~~, Fourth Quarter 2020~~
~~Seasonally~~ 2020 Seasonal y adjusted data adjusted data
Percentage change compared with
Percentage change compared with the same
the previous quarter
quarter of the previous year

2020Q1 2020Q1 2020Q22020Q2 2020Q32020Q3 2020Q42020Q4
2020Q1 2020Q1
2020Q2 2020Q2
2020Q3 2020Q3
2020Q4 2020Q4
EU EU
-3.3 -3.3
-11.2 -11.2
11.6 11.6
-0.5 -0.5
-2.7 -2.7
-13.8 -13.8
-4.1 -4.1
-4.6 -4.6
Euro area Euro area
-3.8 -3.8
-11.6 -11.6
12.5 12.5
-0.7 -0.7
-3.3 -3.3
-14.6 -14.6
-4.2 -4.2
-4.9 -4.9
~~Belgium~~
~~-3.4~~
~~-11.8~~
~~11.6~~
~~-0.1~~
~~-2.0~~
~~-13.9~~
~~-4.3~~
~~-5.1~~

~~324~~ 330 Arnold, Martin and Valentina Romei, “Business Arnold, Martin and Valentina Romei, “Business Activity Crashes to Record Low in Eurozone,” 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.
~~325~~331 Birnbaum, Michael, “ Birnbaum, Michael, “ Europe Is ClosingEurope Is Closing Borders amidBorders amid Covid-19 Outbreak. Covid-19 Outbreak. ~~They~~T hey May be Hard May be Hard to Reopen,” 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.
~~326~~332 Evans, Judith Evans, Emiko Evans, Judith Evans, Emiko ~~Terazono~~T erazono, and Leila Abboud,, and Leila Abboud, “Farmers Warn over Food Supply“Farmers Warn over Food Supply with Harvest Workers with Harvest Workers
Shut Out,” Shut Out,” Financial ~~Times~~Tim es, 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.
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Percentage change compared with
Percentage change compared with the same
the previous quarter
quarter of the previous year

2020Q1 2020Q1 2020Q22020Q2 2020Q32020Q3 2020Q42020Q4
2020Q1 2020Q1
2020Q2 2020Q2
2020Q3 2020Q3
2020Q4 2020Q4
Belgium -3.4 -11.8 11.6 -0.1 -2.0 -13.9 -4.3 -5.1 Bulgaria Bulgaria
0.4 0.4
-10.1 -10.1
4.3 4.3
2.2 2.2
2.3 2.3
-8.6 -8.6
-5.2 -5.2
-3.8 -3.8
Czechnia Czechnia
-3.1 -3.1
-8.7 -8.7
6.9 6.9
0.6 0.6
-1.8 -1.8
-10.8 -10.8
-5.1 -5.1
-4.8 -4.8
Denmark Denmark
-1.3 -1.3
-6.7 -6.7
6.3 6.3
0.7 0.7
0.2 0.2
-7.5 -7.5
-2.2 -2.2
-1.5 -1.5
Germany Germany
-2.0 -2.0
-9.7 -9.7
8.5 8.5
0.3 0.3
-2.2 -2.2
-11.3 -11.3
-4.0 -4.0
-3.6 -3.6
Estonia Estonia
-1.1 -1.1
-5.2 -5.2
2.5 2.5
2.1 2.1
0.2 0.2
-5.5 -5.5
-3.5 -3.5
-1.9 -1.9
Ireland Ireland
-3.9 -3.9
-2.1 -2.1
11.8 11.8
-5.1 -5.1
4.1 4.1
-2.7 -2.7
8.9 8.9
-0.2 -0.2
Greece Greece
0.4 0.4
-13.4 -13.4
3.1 3.1
2.7 2.7
0.1 0.1
-13.8 -13.8
-10.5 -10.5
-7.9 -7.9
Spain Spain
-5.4 -5.4
-17.8 -17.8
17.1 17.1
0.0 0.0
-4.3 -4.3
-21.6 -21.6
-8.6 -8.6
-8.9 -8.9
France France
-5.9 -5.9
-13.5 -13.5
18.5 18.5
-1.4 -1.4
-5.6 -5.6
-18.6 -18.6
-3.7 -3.7
-4.9 -4.9
Croatia Croatia
-1.1 -1.1
-15.4 -15.4
8.2 8.2
2.7 2.7
0.3 0.3
-15.7 -15.7
-9.8 -9.8
-7.1 -7.1
Italy Italy
-5.5 -5.5
-13.0 -13.0
15.9 15.9
-1.9 -1.9
-5.8 -5.8
-18.2 -18.2
-5.2 -5.2
-6.6 -6.6
Cyprus Cyprus
-0.5 -0.5
-13.1 -13.1
8.9 8.9
1.4 1.4
1.4 1.4
-12.6 -12.6
-4.7 -4.7
-4.5 -4.5
Latvia Latvia
-2.3 -2.3
-7.0 -7.0
6.9 6.9
1.1 1.1
-1.2 -1.2
-8.6 -8.6
-2.8 -2.8
-1.8 -1.8
Lithuania Lithuania
-0.3 -0.3
-6.2 -6.2
6.1 6.1
-0.2 -0.2
2.5 2.5
-4.7 -4.7
0.1 0.1
-1.0 -1.0
Luxem- Luxem-
-1.6 -1.6
-7.3 -7.3
9.3 9.3
1.6 1.6
1.3 1.3
-7.9 -7.9
0.0 0.0
1.4 1.4
bourg bourg
Hungary Hungary
-0.5 -0.5
-14.3 -14.3
11.0 11.0
1.3 1.3
1.8 1.8
-13.4 -13.4
-4.8 -4.8
-4.1 -4.1
Malta Malta
-2.4 -2.4
-14.2 -14.2
8.0 8.0
3.8 3.8
2.1 2.1
-14.6 -14.6
-8.6 -8.6
-6.2 -6.2
Nether- Nether-
-1.6 -1.6
-8.4 -8.4
7.7 7.7
-0.1 -0.1
-0.4 -0.4
-9.1 -9.1
-2.4 -2.4
-3.0 -3.0
lands lands
Austria Austria
-3.0 -3.0
-10.7 -10.7
11.8 11.8
-2.7 -2.7
-3.6 -3.6
-13.6 -13.6
-3.8 -3.8
-5.9 -5.9
Poland Poland
-0.3 -0.3
-9.0 -9.0
7.9 7.9
-0.7 -0.7
1.9 1.9
-8.0 -8.0
-1.8 -1.8
-2.7 -2.7
Portugal Portugal
-4.0 -4.0
-14.0 -14.0
13.4 13.4
0.2 0.2
-2.2 -2.2
-16.4 -16.4
-5.6 -5.6
-6.1 -6.1
Romania Romania
0.6 0.6
-11.8 -11.8
5.6 5.6
4.8 4.8
2.7 2.7
-10.0 -10.0
-5.4 -5.4
-1.8 -1.8
Slovenia Slovenia
-4.8 -4.8
-10.1 -10.1
12.2 12.2
-1.0 -1.0
-3.3 -3.3
-13.0 -13.0
-3.0 -3.0
-5.0 -5.0
Slovakia Slovakia
-5.1 -5.1
-8.3 -8.3
11.6 11.6
0.2 0.2
-3.8 -3.8
-12.1 -12.1
-2.3 -2.3
-2.6 -2.6
Finland Finland
-0.6 -0.6
-4.7 -4.7
3.3 3.3
0.4 0.4
-0.6 -0.6
-6.1 -6.1
-2.7 -2.7
-1.7 -1.7
Sweden Sweden
-0.3 -0.3
-7.6 -7.6
6.4 6.4
-0.2 -0.2
0.1 0.1
-7.7 -7.7
-2.2 -2.2
-2.1 -2.1
Other countries Other countries

United United
-3.0 -3.0
-18.8 -18.8
16.0 16.0
: :
-2.4 -2.4
-20.8 -20.8
-8.6 -8.6
: :
Kingdom Kingdom
Iceland Iceland
: :
: :
: :
: :
: :
: :
: :
: :
Norway Norway
-1.4 -1.4
-4.6 -4.6
4.5 4.5
0.6 0.6
0.4 0.4
-4.4 -4.4
-0.1 -0.1
-1.1 -1.1
Switzer- Switzer-
-1.9 -1.9
-7.2 -7.2
7.6 7.6
0.3 0.3
-0.6 -0.6
-8.1 -8.1
-1.6 -1.6
-1.7 -1.7
land land
Source: Eurostat,, April 13, 2021. April 13, 2021.
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In previous actions, the European Commission announced that it would relax rules on In previous actions, the European Commission announced that it would relax rules on
government debt to government debt to ~~allow~~al ow countries more flexibility countries more flexibility in using fiscal policies. Also, the European in using fiscal policies. Also, the European
Central Bank (ECB)Central Bank (ECB) announced that it was ready to take “appropriate and targeted measures,” if 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.~~327~~333 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.~~328~~334 ECB President-designate Christine Lagarde ECB President-designate Christine Lagarde ~~called~~cal ed on EU leaders to take more urgent on EU leaders to take more urgent
action to avoid the spread of COVID-19 from triggering a serious economic slowdown. The action to avoid the spread of COVID-19 from triggering a serious economic slowdown. The
European Commission indicated that it was creating a $30 European Commission indicated that it was creating a $30 ~~billion~~ bil ion investment fund to address investment fund to address
COVID-19 issues.COVID-19 issues.~~329~~335 In other actions In other actions
 On March 12, 2020, the ECB decided to (1) expand its longer-term refinance  On March 12, 2020, the ECB decided to (1) expand its longer-term refinance
operations (LTRO) to provide low-cost loans to Eurozone banks to increase bank operations (LTRO) to provide low-cost loans to Eurozone banks to increase bank
liquidity;liquidity; (2) extend targeted longer-term refinance operations (TLTRO) to (2) extend targeted longer-term refinance operations (TLTRO) to
provide loans at below-market rates to businesses, provide loans at below-market rates to businesses, ~~especially small~~ especial y smal and medium-and medium-
sized businesses, directly affected by COVID-19; (3) provide an additional €120 sized businesses, directly affected by COVID-19; (3) provide an additional €120
~~billion~~ bil ion (about $130 (about $130 ~~billion)~~ bil ion) for the Bank’s asset purchase program to provide for the Bank’s asset purchase program to provide
~~liquidity~~ liquidity to firms that was in addition to €20 to firms that was in addition to €20 ~~billion~~ bil ion a month it previously had a month it previously had
committed to purchasing.committed to purchasing.~~330~~
336  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.~~331~~337 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.~~332~~
338  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
activity (activity (~~initially~~ initial y providing $555 providing $555 ~~billion),~~ bil ion), tax breaks for businesses,tax breaks for businesses,~~333~~339 and export and export
credits and guarantees.credits and guarantees.~~334~~

~~327~~340 333 Dombey, Daniel Dombey, Guy Dombey, Daniel Dombey, Guy Chazan, and Jim Brunsden,Chazan, and Jim Brunsden, “Nine Eurozone Countries Issue“Nine Eurozone Countries Issue Call for Call for
‘Coronabonds,’” ‘Coronabonds,’” Financial Times, March 26, 2020. https://www.ft.com/content/258308f6-6e94-11ea-89df- March 26, 2020. https://www.ft.com/content/258308f6-6e94-11ea-89df-
41bea055720b. 41bea055720b.
~~328~~334 “US Fed’s “US Fed’s Covid-19 Rate Cut Is First Move in a Dance with Markets,” Covid-19 Rate Cut Is First Move in a Dance with Markets,” Financial Times, March 4, 2020. , March 4, 2020.
https://www.ft.com/content/83c07594-5e3a-11ea-b0ab-339c2307bcd4. Giles, Chris, Martin Arnold, Samhttps://www.ft.com/content/83c07594-5e3a-11ea-b0ab-339c2307bcd4. Giles, Chris, Martin Arnold, Sam Jones, and Jones, and
Jamie Smyth,Jamie Smyth, “Finance Ministers ‘ReadyFinance Ministers ‘Ready ~~to Take~~ to T ake Action’ on Covid-19,” Action’ on Covid-19,” Financial ~~Times~~Tim es, 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.
~~329~~335 Arnold, Martin and Guy Arnold, Martin and Guy Chazan, “Christine Lagarde CallsChazan, “Christine Lagarde Calls on EU Leaders to Ramp up Covid-19 Response,” on EU Leaders to Ramp up Covid-19 Response,”
Financial ~~Times~~Tim es, 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.
~~330~~336 Monetary Policy Decisions, , ~~The~~T he European Central Bank, March 12, 2020. https://www.ecb.europa.eu/press/pr/date/ European Central Bank, March 12, 2020. https://www.ecb.europa.eu/press/pr/date/
2020/html/ecb.mp200312~8d3aec3ff2.en.htm. 2020/html/ecb.mp200312~8d3aec3ff2.en.htm.
~~331~~337 Stafford, Philip and Adam Samson, Stafford, Philip and Adam Samson, “European Regulators Intervene in Bid to Stabilize“European Regulators Intervene in Bid to Stabilize Stock and Bond Prices,” Stock and Bond Prices,”
Financial ~~Times~~Tim es, 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.
~~332~~338 Arnold, Martin, “ECB Enters Damage-Limitation Mode with Pledge Arnold, Martin, “ECB Enters Damage-Limitation Mode with Pledge of More Action,” of More Action,” Financial Times, March 13, , March 13,
2020. https://www.ft.com/content/f1cbd4f8-650f-11ea-b3f3-fe4680ea68b5. 2020. https://www.ft.com/content/f1cbd4f8-650f-11ea-b3f3-fe4680ea68b5.
~~333~~339 Loveday, Morris and Louisa Loveday, Morris and Louisa Beck, “Germany Announces ‘Bazooka’ Economic Plan to Mitigate Covid-19 Hit,” Beck, “Germany Announces ‘Bazooka’ Economic Plan to Mitigate Covid-19 Hit,”
Washington Post, March 13, 2020. https://www.washingtonpost.com/world/2020/03/13/Covid-19-latest-news/. , March 13, 2020. https://www.washingtonpost.com/world/2020/03/13/Covid-19-latest-news/.
~~334~~340 Arnold, Martin, Guy Arnold, Martin, Guy Chazan, Victor Mallet, Miles Johnson, and Daniel Dombey, “How European Economies Are Chazan, Victor Mallet, Miles Johnson, and Daniel Dombey, “How European Economies Are
~~Trying~~T rying to Mitigate the Covid-19 Shock,” to Mitigate the Covid-19 Shock,” Financial ~~Times~~Tim es, March 17, 2020. https://www.ft.com/content/26af5520- March 17, 2020. https://www.ft.com/content/26af5520-
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 On March 18, the ECB indicated that it would: create a €750  On March 18, the ECB indicated that it would: create a €750 ~~billion~~ bil ion (about $800 (about $800
~~billion)~~ bil ion) Pandemic Emergency Purchase Program to purchase public and private Pandemic Emergency Purchase Program to purchase public and private
securities; expand the securities it securities; expand the securities it ~~will~~ wil purchase to include nonfinancial purchase to include nonfinancial
commercial paper; and ease some collateral standards.commercial paper; and ease some collateral standards.~~335~~341 In announcing the In announcing the
program, President-designate Lagarde indicated that the ECB would, “do program, President-designate Lagarde indicated that the ECB would, “do
everything necessary.” In creating the program, the ECB removed or significantly everything necessary.” In creating the program, the ECB removed or significantly
loosened almost loosened almost ~~all~~ al constraints that applied to previous asset-purchase programs, constraints that applied to previous asset-purchase programs,
including a self-imposed limit of buying no more than one-third of any one including a self-imposed limit of buying no more than one-third of any one
country’s eligible bonds, a move that was expected to benefit Italy. country’s eligible bonds, a move that was expected to benefit Italy.
 The ECB also indicated that it would make available  The ECB also indicated that it would make available up to €3 up to €3 ~~trillion~~ tril ion in liquidity in liquidity
through refinancing operations. through refinancing operations.~~336~~342 Britain ($400 Britain ($400 ~~billion~~bil ion) and France ($50 ) and France ($50 ~~billion~~bil ion) )
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.~~337~~
343  On March 23, 2020, Germany announced that it would adopt a €750  On March 23, 2020, Germany announced that it would adopt a €750 ~~billion~~bil ion (over (over
$800 $800 ~~billion)~~ bil ion) package in economic stimulus funding. package in economic stimulus funding.
 On April  On April 15, Eurozone finance ministers announced a €500 15, Eurozone finance ministers announced a €500 ~~billion~~bil ion (about $550 (about $550
~~billion)~~ bil ion) emergency spending package to support governments, businesses, and emergency spending package to support governments, businesses, and
workers and workers and ~~will~~ wil provide funds to the European Stability Mechanism, the provide funds to the European Stability Mechanism, the
European Investment Bank, and for unemployment insurance.European Investment Bank, and for unemployment insurance.~~338~~344
On May 5, 2020, Germany’s Constitutional Court issued a ruling On May 5, 2020, Germany’s Constitutional Court issued a ruling ~~challenging~~chal enging the legality the legality of a 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 legal mandate. The German government has not yet indicated how it ~~will formally~~wil formal y respond to the respond to the
ruling, but many analysts contend that the ruling—and the ruling, but many analysts contend that the ruling—and the ~~challenge~~chal enge to the authority of the ECB 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 activities. This could ~~potentially include challenges~~potential y include chal enges to the ECB’s Pandemic Emergency Purchase 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 acquire up to €750 ~~billion~~ bil ion (about $820 (about $820 ~~billion)~~ bil ion) in private and public sector securities to address in private and public sector securities to address
the economic effects of the pandemic crisis. the economic effects of the pandemic crisis.
The German court’s ruling has heightened tensions between the court and the European Court of The German court’s ruling has heightened tensions between the court and the European Court of
Justice. Following the 2008-2009 financial crisis and the subsequent Eurozone financial crisis, the Justice. Following the 2008-2009 financial crisis and the subsequent Eurozone financial crisis, the
ECB launched four asset purchase programs in 2014 to provide assistance to ECB launched four asset purchase programs in 2014 to provide assistance to ~~financially~~financial y strapped strapped
Eurozone governments and to sustain financial liquidityEurozone governments and to sustain financial liquidity in Eurozone banks. Those programs in Eurozone banks. Those programs
included the Corporate Sector Purchase Program (CSPP), the Public Sector Purchase Program included the Corporate Sector Purchase Program (CSPP), the Public Sector Purchase Program
(PSPP), the Asset-Backed Securities Purchase Program (ABSPP), and the Third Covered Bond (PSPP), the Asset-Backed Securities Purchase Program (ABSPP), and the Third Covered Bond
Purchase Program (CBPP3). The programs operated from 2014 to 2018; the PSPP was restarted Purchase Program (CBPP3). The programs operated from 2014 to 2018; the PSPP was restarted

6793-11ea-800d-da70cff6e4d3. 6793-11ea-800d-da70cff6e4d3.
~~335~~341 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.
~~336~~342 Lagarde, Christine, “ Lagarde, Christine, “~~The~~T he ECB Will Do Everything Necessary to Counter the Virus,” ECB Will Do Everything Necessary to Counter the Virus,” Financial Times, March 20, , March 20,
2020. https://www.ft.com/content/281d600c-69f8-11ea-a6ac-9122541af204. 2020. https://www.ft.com/content/281d600c-69f8-11ea-a6ac-9122541af204.
~~337~~343 “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.
~~338~~344 Fleming, Sam Fleming, Sam and Mehreen Khan, “Eurozone Countries Strike Emergency Deal on Coronavirus Rescue,”and Mehreen Khan, “Eurozone Countries Strike Emergency Deal on Coronavirus Rescue,” Financial
~~Times~~Tim es, 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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in November 2019. As of May 8, the PSPP program held €2.2 in November 2019. As of May 8, the PSPP program held €2.2 ~~trillion~~tril ion (about $2.5 (about $2.5 ~~trillion~~tril ion) with ) with
another €600 another €600 ~~billion~~ bil ion (about $700 (about $700 ~~billion~~bil ion) held under other asset purchase programs.) held under other asset purchase programs.~~339~~345 Various Various
groups in Germany groups in Germany ~~challenged~~chal enged the legality of the ECB bond-buying programs before the German the legality of the ECB bond-buying programs before the German
Constitutional Court arguing that the programs exceeded the ECB’s legal mandate. In turn, the Constitutional Court arguing that the programs exceeded the ECB’s legal mandate. In turn, the
German court referred the case to the European Court of Justice, which ruled in December 2019 German court referred the case to the European Court of Justice, which ruled in December 2019
that the ECB’s actions were fully within the ECB’s authority. that the ECB’s actions were fully within the ECB’s authority.
In the German Constitutional Court’s May 5 ruling, the German judges characterized the ECJ’s In the German Constitutional Court’s May 5 ruling, the German judges characterized the ECJ’s
ruling as “incomprehensible,” and directly ruling as “incomprehensible,” and directly ~~challenged~~chal enged the ECB and the European Court of Justice the ECB and the European Court of Justice
and the primacy of the European Court of Justice ruling over national law. The German justices and the primacy of the European Court of Justice ruling over national law. The German justices
argued that the ECB had exceeded its authority by not fully evaluating the economic costs and argued that the ECB had exceeded its authority by not fully evaluating the economic costs and
benefits of previous bond-buying activities, including the impact on national budgets, property benefits of previous bond-buying activities, including the impact on national budgets, property
values, stock markets, life insurance and other economic effects. The German court also argued values, stock markets, life insurance and other economic effects. The German court also argued
that the ECB’s lack of a strategy for reducing its holdings of sovereign debt of Eurozone that the ECB’s lack of a strategy for reducing its holdings of sovereign debt of Eurozone
members increased risks for national governments that back up the ECB, and it members increased risks for national governments that back up the ECB, and it ~~challenged~~chal enged the 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 programs. The ECB reportedly ~~will~~ wil also provide the unpublished full minutes of the central 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.~~340~~346
On March 26, 2021, Germany’s highest court stopped a law that would have ratified the PEPP On March 26, 2021, Germany’s highest court stopped a law that would have ratified the PEPP
bond-buying program. The program requires ratification by each of the EU member’s national bond-buying program. The program requires ratification by each of the EU member’s national
parliaments. The legislation had been passed by both of Germany’s houses of Parliament and was parliaments. The legislation had been passed by both of Germany’s houses of Parliament and was
expected to be signed by German president, Frank-Walter Steinmeier when the court expected to be signed by German president, Frank-Walter Steinmeier when the court
intervened.intervened.~~341~~
347 On May 18, German On May 18, German ~~Chancellor~~Chancel or Angela Merkel and French President Emmanuel Macron Angela Merkel and French President Emmanuel Macron
proposed a €500 proposed a €500 ~~billion~~ bil ion (about $620 (about $620 ~~billion~~bil ion) EU recovery fund in an effort to gain a coordinated ) EU recovery fund in an effort to gain a coordinated
EU fiscal response to the pandemic.EU fiscal response to the pandemic.~~342~~348 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 On May 27, ECB President Lagarde indicated that the ECB projected a drop in the EU economy economy
of 8% to 12% in 2020, twice as severe as the recession following the 2008 financial crisis, and of 8% to 12% in 2020, twice as severe as the recession following the 2008 financial crisis, and
~~called~~cal ed for a €500 for a €500 ~~billion~~ bil ion (about $620 (about $620 ~~billion)~~ bil ion) stimulus package.stimulus package.~~343~~349 In addition, European In addition, European
Commission President Ursula von der Leyen proposed a €750 Commission President Ursula von der Leyen proposed a €750 ~~billion~~ bil ion (about $820 (about $820 ~~billion)~~ bil ion) EU EU
recovery fund, termed the “Next Generation Fund,” that would provide €500 recovery fund, termed the “Next Generation Fund,” that would provide €500 ~~billion ($550~~
~~billion)~~ bil ion ($550 bil ion) in grants in a Recovery and Resilience Facility and €250 in grants in a Recovery and Resilience Facility and €250 ~~billion ($270 billion) in loans.~~

~~339~~bil ion ($270 bil ion) in loans. 345 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.
~~340~~346 Arnold, Martin, Berlin and Arnold, Martin, Berlin and ECB SignalECB Signal End to Legal Impasse Over Bond-Buying,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.
~~341~~347 Chazan, Guy, Chazan, Guy, Germany’s Highest Court Blocks Ratification of EU Recovery Fund,Germany’s Highest Court Blocks Ratification of EU Recovery Fund, Financial Times, March 26, , March 26,
2021. https://www.ft.com/content/74841ea6-4fbf-4c7a-b015-66ba191ffc9b. 2021. https://www.ft.com/content/74841ea6-4fbf-4c7a-b015-66ba191ffc9b.
~~342~~348 Fleming, Sam, Fleming, Sam, Victor Mallet, and GuyVictor Mallet, and Guy Chazan, Germany and France Unite in CallChazan, Germany and France Unite in Call for €500 Billion Europe for €500 Billion Europe
Recovery Fund,Recovery Fund, Financial ~~Times~~Tim es, 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.
~~343~~349 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 The proposal would take the unprecedented step of ~~allowing~~al owing the EU to issues bonds the EU to issues bonds
independently from the other EU central banks.independently from the other EU central banks.~~344~~350 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.~~345~~351 Proposals for raising funds include issuing 30-year bonds and Proposals for raising funds include issuing 30-year bonds and
raising taxes on large technology firms, such as Google and Facebook. In addition to the recovery raising taxes on large technology firms, such as Google and Facebook. In addition to the recovery
fund, von der Leyen proposed a revised EC seven-year budget, the Multiannual Financial fund, von der Leyen proposed a revised EC seven-year budget, the Multiannual Financial
Framework (MFF), of €1.Framework (MFF), of €1.~~1trillion~~1tril ion for 2021 to 2027. for 2021 to 2027.
On May 28, several key political On May 28, several key political groups within the EU Parliament voiced their support for new groups within the EU Parliament voiced their support for new
rules that would rules that would ~~allow~~al ow the EU to retaliate the EU to retaliate in such trade areas as services and in such trade areas as services and ~~intellectual~~intel ectual property property
protection without waiting for a WTO ruling. Some Parliamentarians reportedly argued that such protection without waiting for a WTO ruling. Some Parliamentarians reportedly argued that such
expanded authority, termed a “trade bazooka,” was necessary to respond to trade disputes, expanded authority, termed a “trade bazooka,” was necessary to respond to trade disputes,
because the United States had blocked the appointment of judges to the WTO’s because the United States had blocked the appointment of judges to the WTO’s ~~appellate body.346~~appel ate body.352
European leaders, reportedly interested in finalizingEuropean leaders, reportedly interested in finalizing an investment agreement with China, an investment agreement with China,
announced they would not follow President Trump in applying trade restrictions on China for announced they would not follow President Trump in applying trade restrictions on China for
positioning itself to limitpositioning itself to limit Hong Kong’s autonomy granted by the “one country two systems” Hong Kong’s autonomy granted by the “one country two systems”
principle after the end of British rule in 1997.principle after the end of British rule in 1997.~~347~~353
The European Central Bank announced on June 4 that it would double to $1.5 The European Central Bank announced on June 4 that it would double to $1.5 ~~trillion~~ tril ion its 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.~~348~~354 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 of fiscal measures, including tax cuts, aid to ~~small~~ smal businesses, cash payments to parent, and other businesses, cash payments to parent, and other
measures totaling €135 measures totaling €135 ~~billion~~ bil ion (about $150 (about $150 ~~billion~~bil ion). Austria, Denmark, the Netherland, and ). 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 reduce households’ utility ~~bills~~bil s. The plan also includes about $6 . The plan also includes about $6 ~~billion~~ bil ion for the social security for the social security
system, $11 system, $11 ~~billion~~bil ion to assist cities cover housing and other costs, about $2 to assist cities cover housing and other costs, about $2 ~~billion~~bil ion for cultural for cultural
institutions and nonprofit groups and incentives for purchases of electric vehicles.institutions and nonprofit groups and incentives for purchases of electric vehicles.~~349~~355
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 government would provide more than €300 ~~million~~mil ion (about $330 (about $330 ~~million~~mil ion), to acquire a 25% stake ), 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

~~344~~ 350 Birnbaum, Michael, and Loveday Morris, E.U. Proposes $825 Billion Coronavirus Rescue Birnbaum, Michael, and Loveday Morris, E.U. Proposes $825 Billion Coronavirus Rescue Plan GivingPlan Giving Brussels Brussels
Power to Raise Money for First Power to Raise Money for First ~~Time~~T ime, , 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.
~~345~~351 Brunsden, Brunsden, Jim and Sam Fleming,Jim and Sam Fleming, How WouldHow Would ~~Ursula~~ Ursula von der Leyen’s Coronavirus Recovery Fundvon der Leyen’s Coronavirus Recovery Fund Work?, Work?,
Financial ~~Times~~Tim es, 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.
~~346~~352 Vela, Vela, Jakob Hanke, Jakob Hanke, ~~Trade~~T rade Bazooka Gets Backing Bazooka Gets Backing From Main Political GroupsFrom Main Political Groups in EU Parliament, in EU Parliament, Politico Pro, May , May
28, 2020; 28, 2020; Draft Report, 2019/10273(COD), European Parliament, Committee on International , 2019/10273(COD), European Parliament, Committee on International ~~Trade~~T rade, May 6, 2020., May 6, 2020.
~~347~~ 353 Lau, Stuart Lau, Jakob Hanke Vela, Lau, Stuart Lau, Jakob Hanke Vela, Jacopo Barigazzi,Jacopo Barigazzi, and Finbarr Bermingham, EU Won't Follow and Finbarr Bermingham, EU Won't Follow ~~Trump~~T rump Into a Into a
~~Trade~~T rade War Over Hong Kong, Politico Pro, May 28, 2020. War Over Hong Kong, Politico Pro, May 28, 2020.
~~348~~ 354 Arnold, Martin, ECB Boosts Bond-Buying Arnold, Martin, ECB Boosts Bond-Buying ~~Stimulus~~ Stimulus Package by €600, 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.
~~349~~355 Ewing, Ewing, Jack, and MelissaJack, and Melissa Eddy,Eddy, ‘Europe Finally Got the Message’:‘Europe Finally Got the Message’: Leaders Act Leaders Act ~~Together~~T ogether on Message, on Message, The New
York ~~Times~~Tim es, 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=action=click&module=~~Top~~T op%20Stories&pgtype=Homepage. %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.~~350~~356
On July 17, the European Commission met to approve the proposed €750 On July 17, the European Commission met to approve the proposed €750 ~~billion~~bil ion support fund to support fund to
assist European countries address the economic effects of the pandemic. assist European countries address the economic effects of the pandemic. ~~Initially~~Initial y, the Commission , 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 resumed on July 20. European leaders announced on July 21 they had approved a €750 ~~billion~~bil ion
(about $859 (about $859 ~~billion~~bil ion) pandemic relief package and a multi-year EU budget, referred to as the ) pandemic relief package and a multi-year EU budget, referred to as the
~~Multiannual~~ Multiannual Financial Framework (MFF), with a combined value of over €2 Financial Framework (MFF), with a combined value of over €2 ~~trillion~~tril ion. The . 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.~~351~~357
The €750 The €750 ~~billion~~ bil ion relief fund reportedly includes a Recovery and Resilience Facility of €672.5 relief fund reportedly includes a Recovery and Resilience Facility of €672.5
~~billion,~~ bil ion, which includes €360 which includes €360 ~~billion~~bil ion in loans and €312.5 in loans and €312.5 ~~billion~~ bil ion in grants and half a dozen other in grants and half a dozen other
~~initiatives~~ initiatives to assist to assist ~~economically~~economical y weakened member states. The relief fund was coupled with weakened member states. The relief fund was coupled with
rebates on EU budget contributions for so-rebates on EU budget contributions for so-~~called~~cal ed “frugal” states, or EU members with stronger “frugal” states, or EU members with stronger
fiscal balances. Austria, the Netherlands, Denmark, and Sweden reportedly fiscal balances. Austria, the Netherlands, Denmark, and Sweden reportedly ~~will~~ wil receive such receive such
budget rebates.budget rebates.~~352~~358
On September 3, 2020, French Prime Minister Jean Castex announced that France would On September 3, 2020, French Prime Minister Jean Castex announced that France would
implement a €100 implement a €100 ~~billion~~ bil ion (about $130 (about $130 ~~billion~~bil ion) spending plan to speed the economy’s recovery ) spending plan to speed the economy’s recovery
from the economic effects of the COVID-19 pandemic. Reportedly, the plan includes funding for from the economic effects of the COVID-19 pandemic. Reportedly, the plan includes funding for
green energy (including hydrogen energy), transportation (state railways), and industrial green energy (including hydrogen energy), transportation (state railways), and industrial
innovation.innovation.~~353~~359
The United Kingdom
The United Kingdom has taken a number of steps to support economic activity. These steps are The United Kingdom has taken a number of steps to support economic activity. These steps are
expected to limit the damage to the UK economy. The Bank of England (BOE)expected to limit the damage to the UK economy. The Bank of England (BOE) forecasted in May forecasted in May
2020 that the UK2020 that the UK economy would contract by 30% in the first half of 2020, but then rebound economy would contract by 30% in the first half of 2020, but then rebound
sharply in the second half of the year, exhibiting a “V” shaped recovery. The Bank of England has sharply in the second half of the year, exhibiting a “V” shaped recovery. The Bank of England has
announced a number of policy initiativesannounced a number of policy initiatives including 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 historic low of 0.25%; the reintroduction of the Term Funding Scheme for ~~Small~~
Smal and Medium-sized Enterprises (TFSME) that provides banks with over $110 and Medium-sized Enterprises (TFSME) that provides banks with over $110
~~billion~~ bil ion for loans at low interest rates; a lowering of banks’ countercyclical capital for loans at low interest rates; a lowering of banks’ countercyclical capital
buffer from 1% to zero, which is estimated to support over $200 buffer from 1% to zero, which is estimated to support over $200 ~~billion~~bil ion of bank of bank
lending to businesses; and a freeze in banks’ dividend payments.lending to businesses; and a freeze in banks’ dividend payments.~~354~~

~~350~~360 356 Miller, Joe, Germany Flexes its Muscles Miller, Joe, Germany Flexes its Muscles on Foreign Investment, 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.
~~351~~357 Special Special Meeting of the European Council-Conclusions, EUCP 10/20, July 21, 2020. Meeting of the European Council-Conclusions, EUCP 10/20, July 21, 2020.
~~352~~358 Fleming, Sam, Fleming, Sam, Mehreen Khan and Jim Brunsden, EU LeadersMehreen Khan and Jim Brunsden, EU Leaders Strike Deal on €750bn Recovery FundStrike Deal on €750bn Recovery Fund After After
Marathon SummitMarathon Summit , , Financial ~~Times~~Tim es, 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.
~~353~~359 Mallet, Victor, France Launches €100 Billion Coronavirus Recovery Mallet, Victor, France Launches €100 Billion Coronavirus Recovery Plan, Plan, Financial Times, September 3, 2020. , September 3, 2020.
https://www.ft.com/content/0921c871-17b5-4e2e-bdea-aab78c2d0090. https://www.ft.com/content/0921c871-17b5-4e2e-bdea-aab78c2d0090.
~~354~~360 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. .
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 On March 15, the BOE reinstituted U.S. dollar swap lines with the Federal  On March 15, the BOE reinstituted U.S. dollar swap lines with the Federal
Reserve. Reserve.
 On March 17, the BOE and the UK Treasury introduced the COVID Corporate  On March 17, the BOE and the UK Treasury introduced the COVID Corporate
Financing Facility (CCFF) to provide assistance to UK firms to bridge through Financing Facility (CCFF) to provide assistance to UK firms to bridge through
Covid-19-related disruptions to their cash flow. Covid-19-related disruptions to their cash flow.
 On March 19, during a Special Monetary Policy Meeting, the Bank of England  On March 19, during a Special Monetary Policy Meeting, the Bank of England
reduced its main interest rate to 0.1%, increased the size of its TFSME fund, and reduced its main interest rate to 0.1%, increased the size of its TFSME fund, and
increased the stock of asset purchases by £200 increased the stock of asset purchases by £200 ~~billion~~bil ion to a total of £645 to a total of £645 ~~billion~~
bil ion financed by issuing UKfinanced by issuing UK government bonds and some additional nonfinancial government bonds and some additional nonfinancial
investment-grade corporate bonds.investment-grade corporate bonds.~~355~~361
 On March 20, the BOE participated in an  On March 20, the BOE participated in an ~~internationally~~ international y coordinated central bank coordinated central bank
expansion of liquidity expansion of liquidity through U.S. standing dollar liquiditythrough U.S. standing dollar liquidity swap line swap line
arrangements. arrangements.
 On March, the BOE activated the Contingent Term Repo Facility (CTRF).  On March, the BOE activated the Contingent Term Repo Facility (CTRF).
 On April On April 6, announced the activation of the TFSME ahead of schedule. 6, announced the activation of the TFSME ahead of schedule.
 On April On April 23, the Bank of England indicated it would quadruple its borrowing 23, the Bank of England indicated it would quadruple its borrowing
over the second quarter of 2020, reflecting a contraction in the UK economy, over the second quarter of 2020, reflecting a contraction in the UK economy,
lower tax revenues, and increased financial demands to support fiscal policy lower tax revenues, and increased financial demands to support fiscal policy
measures.measures.~~356~~
362 In terms of fiscal policy, UK In terms of fiscal policy, UK ~~Chancellor~~Chancel or of the Exchequer Rishi Sunak proposed a national of the Exchequer Rishi Sunak proposed a national
budget on March 11, 2020, that included nearly $3.5 budget on March 11, 2020, that included nearly $3.5 ~~billion~~ bil ion in fiscal spending to counter adverse in fiscal spending to counter adverse
economic effects of the pandemic and increased in statutory sick leave by about $2.5 economic effects of the pandemic and increased in statutory sick leave by about $2.5 ~~billion~~bil ion in in
funds to funds to ~~small~~ smal and medium businesses to provide up to 14 days of sick leave for affected and medium businesses to provide up to 14 days of sick leave for affected
employees. The plan provides affected workers up to 80% of their salary, or up to £2,500 a month employees. The plan provides affected workers up to 80% of their salary, or up to £2,500 a month
(about $2,800) if they are laid off. Some estimates indicate that UK spending to support its (about $2,800) if they are laid off. Some estimates indicate that UK spending to support its
economy could rise to about $60 economy could rise to about $60 ~~billion~~ bil ion in 2020.in 2020.~~357~~363 Identified as the Coronavirus Job Retention Identified as the Coronavirus Job Retention
Scheme (CJRS), the program was backdated to start on March 1 and had been expected to run Scheme (CJRS), the program was backdated to start on March 1 and had been expected to run
through May, but was extended to expire the end of June 2020. Prime Minister Johnson also through May, but was extended to expire the end of June 2020. Prime Minister Johnson also
announced that announced that ~~all~~ al pubs, cafés, restaurants, theatres, cinemas, nightclubs, gyms and leisure centers pubs, cafés, restaurants, theatres, cinemas, nightclubs, gyms and leisure centers
would be closed.would be closed.~~358~~364 Part of the fiscal spending package includes open-ended funding for the Part of the fiscal spending package includes open-ended funding for the
National Health Service (NHS), $6 National Health Service (NHS), $6 ~~billion~~ bil ion in emergency funds to the NHS, $600 in emergency funds to the NHS, $600 ~~million~~mil ion hardship hardship
fund to assist vulnerable people, and tax cuts and tax holidays for fund to assist vulnerable people, and tax cuts and tax holidays for ~~small~~ smal businesses in certain businesses in certain
affected sectors.affected sectors.~~359~~

365 https://www.ft.com/content/4e60c08e-6380-11ea-b3f3-fe4680ea68b5. https://www.ft.com/content/4e60c08e-6380-11ea-b3f3-fe4680ea68b5.
~~355~~361 Johnson, Miles, Chris Giles, Johnson, Miles, Chris Giles, Martin Arnold, and James Politi, “Italy’s PM Urges BrusselsMartin Arnold, and James Politi, “Italy’s PM Urges Brussels to Unleash €500bn to Unleash €500bn
RescueRescue Fund,”Fund,” Financial ~~Times~~Tim es, 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.
~~356~~362 Giles, Giles, Chris, and Chris, and ~~Tommy~~T ommy Stubbington, UK Stubbington, UK ~~Treasury~~T reasury to Quadruple to Quadruple ~~Borrowing~~ Borrowing to £180bn Over Next Quarter, to £180bn Over Next Quarter,
Financial ~~Times~~Tim es, 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.
~~357~~363 Parker, George, Chris Giles, Parker, George, Chris Giles, and Sebastianand Sebastian Payne, “Sunak Payne, “Sunak ~~Turns~~T urns on Financial Firepower to Help Workers,” on Financial Firepower to Help Workers,”
Financial ~~Times~~Tim es, 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.
~~358~~364 Ibid. Ibid.
~~359~~365 Payne, Sebastian and Chris Giles, Payne, Sebastian and Chris Giles, “Budget“Budget 2020: Sunak Unveils £30bn Stimulus2020: Sunak Unveils £30bn Stimulus to Counter UK Covid-19 Shock,” to Counter UK Covid-19 Shock,”
Financial ~~Times~~Tim es. https://www.ft.com/content/f7b27264-6384-11ea-a6cd-df28cc3c6a68. . https://www.ft.com/content/f7b27264-6384-11ea-a6cd-df28cc3c6a68.
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On July 8, On July 8, ~~Chancellor~~Chancel or Sunak proposed additional fiscal measures to support the UK economy. Sunak proposed additional fiscal measures to support the UK economy.~~360~~366
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 companies that bring employees out of furlough, estimated at around 9 ~~million~~ mil ion workers, and a 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
50% discount on meals and nonalcoholic drinks eaten at restaurants and cafes during August, 50% discount on meals and nonalcoholic drinks eaten at restaurants and cafes during August,
with some restrictions. with some restrictions.
On On ~~December 22~~March 31, 2021, the UK Government announced that UK GDP in the , the UK Government announced that UK GDP in the ~~second~~fourth quarter of 2020 quarter of 2020
~~contracted by 18.8% (revised) from the previous quarter and increased by 16.0%~~ grew by 1.3%, after contracting by 19.5% (revised) in the second quarter and growing by 16.9% in the third in the third
quarter based on market prices, as indicated in quarter based on market prices, as indicated in Figure 22..~~361 Despite the Q3 growth~~367 Figure 22. UK Month Over Month Quarterly Percentage Change in GDP Source: GDP Quarterly National Accounts, UK: October to December 2020, Office for National Statistics, March 31, 2021. Created by CRS. Despite the growth in the 3rd and 4th quarters, the UK , the UK
economy remained economy remained ~~8.6~~7.3% below where it % below where it was at the end of 2019. For the year as a whole, the rate of growth of the UK economic contracted by 9.8%, as indicated in Table 16. The Q2 decline~~was at the end of 2019. The Q2 contraction~~ was driven was driven
by lower levels of activity in services (-19.9%), production (16.9%)-primarily manufacturing, and by lower levels of activity in services (-19.9%), production (16.9%)-primarily manufacturing, and
construction (35%) and constituted the largest quarterly decline since 1955.construction (35%) and constituted the largest quarterly decline since 1955.~~362~~368 In contrast, the Q3 In contrast, the Q3
~~expansion~~ and Q4 expansion occurred in services, industrial production, and construction.occurred in services, industrial production, and construction. ~~In addition, household~~
~~consumption contracted by 22.2% in Q2, reportedly the largest quarterly contraction on record,~~
~~while consumption increased by 19.5% in the third quarter, also a record percentage change.~~
~~In other areas~~
~~ Business investment fell by 22.8% in Q2, but rose by 19.5% in Q3;~~
~~ Government consumption fell by 14.5% in Q2, but rose by 10.4% in Q3;~~
~~ Imports (-28.9%) and exports (-15.0%) fell in Q2, and fell further in Q3 (imports~~
~~-22.2 and exports -19.1%).~~
~~The Bank of England’s August Monetary Policy Report projected that fourth quarter 2020 UK~~
~~GDP would recover from the steep drop in activity in the second quarter by posting an overall~~
~~year-over-year decline of 5.6%, based primarily on an anticipated recovery in personal~~
~~consumption. The forecast also indicated that GDP was projected to grow at a rate of 8.6% in~~
~~2021, although the Bank indicated that there was higher than usual uncertainty surrounding the~~
~~forecast, given the uncertainty concerning the course of the pandemic.363 The Bank also~~
In other areas  Household consumption fel by 10.6% in 2020, primarily as a result of large declines in the first and second quarters.  Business investment (gross fixed capital formation) fel by 8.8% over the year, despite growing by 19.0% in the third quarter; 366 Pickard, Jim and Chris Giles, Sunak’s Summer Statement: UK Government to Pay Companies to Bring Workers Back From Furlough, Financial Tim es, July 7, 2020. https://www.ft.com/content/ad1688ee-3d8d-4e52-9b16-a3632eed8be9. 367 Giles, Chris and Valentina Romei, BoE Economist Warns Against Pessimism After Record Drop in GDP, Financial Tim es, September 30, 2020. https://www.ft.com/content/fed4fe06-8c6a-4272-b0b3-a0759805eb64. 368 GDP Quarterly National Accounts, UK: October to December 2020, Office for National Statistics, March 31, 2021. Congressional Research Service 103 Global Economic Effects of COVID-19  Government spending fel by 6.5% during the year, despite growing by 19.0% in the third quarter and 4.4% in the fourth quarter reflecting increased spending on health care;  Imports (-11.8%) and exports (-15.8%) fel in 2020 compared with 2019, reflecting large declines in the first and second quarters of 2020. Table 16. UK Major GDP Aggregates 2019-2020 Percent change from preceding period GDP Households Gross Fixed Government Exports Imports Capital Formation 2019 1.4% 1.1% 1.5% 4.0% 2.7% 1.9% Q1 0.6 0.0 2.1 1.4 -1.2 6.5 Q2 0.1 0.6 -1.1 2.3 -0.8 -9.0 Q3 0.5 0.1 1.3 -0.9 5.3 1.5 Q4 0.0 -0.3 -1.6 0.0 3.8 -3.1 2020 -9.8 -10.6 -8.8 -6.5 -15.8 -11.8 Q1 -2.8 -2.6 -1.2 -1.8 -14.5 -7.4 Q2 -19.5 -20.8 -20.7 -17.3 -10.1 -21.1 Q3 16.9 19.7 19.0 15.8 -0.5 14.6 Q4 1.3 -1.7 4.4 6.7 6.1 11.0 Source: Office of National Statistics, GDP Quarterly National Accounts, UK; October to December 2020. Notes: Chained volume measures. The Bank of England’s February 2021 Monetary Policy Report indicated that its GDP forecast remained “unusual y” uncertain and depended on the evolving nature of the pandemic, the measure that are taken to protect public health, and how households, businesses and financial markets respond to these developments.369The forecast projected that UK GDP growth rate could fal by 4% in the first quarter of 2021, or to about 12% below the level of the fourth quarter of 2019.370 The Bank assumed that social and business restrictions in January 2021 remained in place through the first quarter. The UK-EU trade arrangement, the Trade and Cooperation Agreement, which became effective on December 24, 2020, is projected to raise some barriers on UK-EU trade and increase administrative costs, which could reduce UK trade and GDP by 10.5% and 3.25%, respectively, over the long run, compared with earlier forecasts. Trade during the first quarter was also projected to be dampened as a consequence of UK firms adjusting to the new trade rules.371 As lockdowns and restrictions are lessened or removed in the second half of 2021, the Bank forested that consumer spending would revive with households spending the extra 5% of savings they accumulated during 2020. As indicated in Table 17, the growth catch-up period is projected to last through 2022, before slowing in 2023. The Bank of England also conducted stress tests on UK banks in 2020 ~~conducted stress tests on UK banks~~ and concluded the banks had sufficient capital buffers to and concluded the banks had sufficient capital buffers to
~~absorb the losses that could arise under the Bank’s main projections. 364~~

~~360 Pickard, Jim and Chris Giles, Sunak’s Summer Statement: UK Government to Pay Companies to Bring Workers~~
~~Back From Furlough, Financial Times, July 7, 2020. https://www.ft.com/content/ad1688ee-3d8d-4e52-9b16-~~
~~a3632eed8be9.~~
~~361 Giles, Chris and Valentina Romei, BoE Economist Warns Against Pessimism After Record Drop in GDP,~~ ~~Financial~~
~~Times,~~ ~~September 30, 2020. https://www.ft.com/content/fed4fe06-8c6a-4272-b0b3-a0759805eb64.~~
~~362 GDP First Quarterly Estimate, UK: April to June 2020, Office for National Statistics, August 12, 2020.~~
~~363 Monetary Policy Report, August 2020, Bank of England, August 2020, p. 3.~~
~~364 Financial Stability Report, August 2020, Bank of England, August 2020, p. ii.~~
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~~Figure 22. UK Month Over Month Quarterly Percentage Change in GDP~~

Source: GDP Quarterly National Accounts, UK: July to September 2020, Office for National Statistics, December 22,
~~2020. Created by CRS.~~
~~On November 5, 2020, the Bank of England announced that it anticipated the UK economy~~
~~would fall~~ absorb the losses that 369 Monetary Policy Report, Bank of England, February 2021, p. ii. 370 Ibid, p. 3. 371 Ibid, p. 4. Congressional Research Service 104 Global Economic Effects of COVID-19 could arise under the Bank’s main projections.372 The Bank also concluded that UK businesses had successfully raised the funds they needed to satisfy their cash-flow requirements. In addition, the government extended three financing facilities for businesses – the Bounce Back Loan Scheme (BBLS), the Coronavirus Business Interruption Loan Scheme and the Coronavirus Large Business Interruption Loan Scheme -through to the end of January 2021.373 The forecast also projects an increase in unemployment and business insolvencies in 2021. Table 17. UK Forecast of Major Aggregate National Accounts, 2020-2023 Percent change from the preceding period Averages Projection 2010-2019 2021 2022 2023 GDP 1.75% 5.00% 7.25% 1.25% Households 1.75 4.25 11.75 1.00 Business 3.75 4.00 12.00 4.50 Exports 3.25 -3.00 5.25 4.25 Imports 3.50 5.25 12.75 3.50 Source: GDP Quarterly National Accounts, UK: October to December 2020, Office of National Statistics, March 31, 2021. On November 5, 2020, the Bank of England announced that it anticipated the UK economy would fal back into recession in the fourth quarter of 2020 as a result of a decline in consumer back into recession in the fourth quarter of 2020 as a result of a decline in consumer
spending and businesses investment due to social distancing requirements and business spending and businesses investment due to social distancing requirements and business
lockdowns imposed in response to a resurgence of COVID-19 cases in October and November. lockdowns imposed in response to a resurgence of COVID-19 cases in October and November.
The Bank also announced an additional £150 The Bank also announced an additional £150 ~~billion~~ bil ion in government bond purchases and increase in government bond purchases and increase
in quantities easing, or additional bond purchases, to provide monetary stimulus in 2021.in quantities easing, or additional bond purchases, to provide monetary stimulus in 2021.~~365~~374 In In
addition, the Bank indicated that it estimated the pandemic would reduce UK GDP by 1.75 addition, the Bank indicated that it estimated the pandemic would reduce UK GDP by 1.75
percentage points below where it had forecasted at the beginning of 2020. percentage points below where it had forecasted at the beginning of 2020.
On March 3, 2021, On March 3, 2021, ~~Chancellor~~Chancel or of the Exchequer Sunak proposed a £65 of the Exchequer Sunak proposed a £65 ~~billion~~bil ion financial assistance financial assistance
package spread out over two-years to assist UK businesses and households recover from the package spread out over two-years to assist UK businesses and households recover from the
economic effects of the pandemic. The economic effects of the pandemic. The ~~Chancellor~~Chancel or argued the spending was necessary, because argued the spending was necessary, because
the UKthe UK economy was projected to not fully recover for at least five years. With a continuation of economy was projected to not fully recover for at least five years. With a continuation of
state supported measures into the summer, the total cost to the UK economy of addressing the state supported measures into the summer, the total cost to the UK economy of addressing the
pandemic-related economic recession was estimated at £407 pandemic-related economic recession was estimated at £407 ~~billion~~bil ion over two years. The spending over two years. The spending
initiativeinitiative is expected to be followed by large increases in corporate and individual taxes starting is expected to be followed by large increases in corporate and individual taxes starting
in 2023.in 2023.~~366~~375 Given the announced planned tax increases in subsequent years, some economists Given the announced planned tax increases in subsequent years, some economists
could argue the spending initiativecould argue the spending initiative could could ~~fall~~ fal short of the estimated stimulative effects. short of the estimated stimulative effects.
~~Japan~~
~~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~~
~~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~~
~~school closures.367 On March 24, 2020, Japan announced that the Summer Olympics set to take~~

~~365 Giles,~~ 372 Financial Stability Report, Bank of England, December 2020, p. ii. 373 Ibid, p. 3. 374 Giles, Chris, Bank of England Launches £150bn StimulusChris, Bank of England Launches £150bn Stimulus to Boost Consumer Spending,to Boost Consumer Spending, Financial Financial ~~Times~~T imes, ,
November 5, 2020. https://www.ft.com/content/18ade542-d2a9-438a-ba5c-37b51475993b. November 5, 2020. https://www.ft.com/content/18ade542-d2a9-438a-ba5c-37b51475993b.
~~366~~375 Pickard, Jim, Chris Giles Pickard, Jim, Chris Giles and Georgeand George Parker, Rishi SunakParker, Rishi Sunak Delivers SpendDelivers Spend Now, Now, ~~Tax~~T ax Later Budget to Kickstart UK Later Budget to Kickstart UK
Economy, Economy, Financial ~~Times~~Tim es, March 3, 2021. https://www.ft.com/content/da66ce9a-6dfc-4a3a-bde7-d4f4faed6c4a. March 3, 2021. https://www.ft.com/content/da66ce9a-6dfc-4a3a-bde7-d4f4faed6c4a.
367 Harding, Robin and Hudson Lockett, “BoJ Spurs Asia Markets Rebound with Vow to Fight Covid-19,” Financial
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Congressional Research Service 105 Global Economic Effects of COVID-19 Japan The Bank of Japan, with already-low interest rates, injected $4.6 bil ion in liquidity into Japanese 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 government also pledged to provide wage subsidies for parents forced to take time off due to school closures.376 On March 24, 2020, Japan announced that the Summer Olympics set to take place in Tokyo would be postponed by a year, delaying a projected boost to the Japanese place in Tokyo would be postponed by a year, delaying a projected boost to the Japanese
economy that was expected from the event. Japan adopted an emergency fiscal package of about economy that was expected from the event. Japan adopted an emergency fiscal package of about
$1.1 $1.1 ~~trillion~~tril ion, roughly equivalent to 10% of Japan’s annual gross domestic product (GDP). On , 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 amounts of 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 low and government bonds and quadruple its purchases of corporate debt to keep interest rates low and
stimulate the Japanese economy.stimulate the Japanese economy.~~368~~377
The Japanese Cabinet proposed a second supplemental appropriation measure that included $296 The Japanese Cabinet proposed a second supplemental appropriation measure that included $296
~~billion~~ bil ion in spending and a total value of about $1.1 in spending and a total value of about $1.1 ~~trillion~~ tril ion in loans and guarantees, funded through in loans and guarantees, funded through
new bonds. This and a previous set of spending measures reportedly were comparable to 40% of new bonds. This and a previous set of spending measures reportedly were comparable to 40% of
Japan’s GDP and included grants for businesses to pay rents through the Development Bank of Japan’s GDP and included grants for businesses to pay rents through the Development Bank of
Japan and funds to Japan and funds to ~~small~~ smal and medium-sized businesses through the Regional Economy and medium-sized businesses through the Regional Economy
VitalizationVitalization Corporation of Japan, payments to assist furloughed workers, and a reserve fund to Corporation of Japan, payments to assist furloughed workers, and a reserve fund to
provide capital injections to struggling firms through the Japan Investment Corporation.provide capital injections to struggling firms through the Japan Investment Corporation.~~369~~378
In terms of monetary policy, the Bank of Japan (BOJ) maintained its low interest rates policy of - In terms of monetary policy, the Bank of Japan (BOJ) maintained its low interest rates policy of -
0.1%, even as it increased its coronavirus lending facility from $700 0.1%, even as it increased its coronavirus lending facility from $700 ~~billion to $1 trillion~~ bil ion to $1 tril ion and and
stated it would continue purchasing commercial paper, corporate bonds, and exchange traded stated it would continue purchasing commercial paper, corporate bonds, and exchange traded
funds at the rate of $12 funds at the rate of $12 ~~trillion~~tril ion a year. a year.~~370~~379 The COVID-19 lending facility assisted banks in The COVID-19 lending facility assisted banks in
providing zero interest rate loans to businesses. In a separate program, the BOJ provided about providing zero interest rate loans to businesses. In a separate program, the BOJ provided about
$110 $110 ~~trillion~~ tril ion to buy commercial paper and corporate bonds and provided dollars through swap to buy commercial paper and corporate bonds and provided dollars through swap
arrangements with the U.S. Federal Reserve. Japan reported on August 17 that its economy had arrangements with the U.S. Federal Reserve. Japan reported on August 17 that its economy had
contracted by 7.8% in the second quarter of 2020, compared with the previous quarter, or at an contracted by 7.8% in the second quarter of 2020, compared with the previous quarter, or at an
annual a rate of 27.8%. This drop in economic activity was precipitated by a drop in exports of annual a rate of 27.8%. This drop in economic activity was precipitated by a drop in exports of
18.5% from the preceding quarter (56.0% at an annual rate) and a decline in personal 18.5% from the preceding quarter (56.0% at an annual rate) and a decline in personal
consumption of 8.6% (30.1% at an annual rate).consumption of 8.6% (30.1% at an annual rate).~~371~~380
On October 29, the Bank of Japan issued a revised forecast that indicated Japan’s GDP would On October 29, the Bank of Japan issued a revised forecast that indicated Japan’s GDP would
contract by 5.5% in the fiscal year ending March 2021. The economy was projected to grow by contract by 5.5% in the fiscal year ending March 2021. The economy was projected to grow by
3.6% in 2021 and by 1.6% the following year. The Bank indicated, however, that the outlook 3.6% in 2021 and by 1.6% the following year. The Bank indicated, however, that the outlook
remained, “highly uncertain,” with big downside risks.remained, “highly uncertain,” with big downside risks.~~372~~381
Japan also indicated on November 25 that its GDP grew by 4.7% in the third quarter, reportedly Japan also indicated on November 25 that its GDP grew by 4.7% in the third quarter, reportedly
better than government Ministers and economists had projected, but they remained cautious over better than government Ministers and economists had projected, but they remained cautious over
~~prospects for the fourth quarter rate of growth.373 The Bank of Japan announced on January 20,~~
~~2021, that the Japanese economy could grow at a slightly faster pace of 3.9% in 2021. An~~
~~increase in viral cases in January 2021, however, led to a renewed effort at quarantines and~~
~~lockdowns and raised questions about the timing of an economic recovery.374~~

~~Times~~ 376 Harding, Robin and Hudson Lockett, “ BoJ Spurs Asia Markets Rebound with Vow to Fight Covid-19,” Financial Tim es, 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.
~~368~~377 Harding, Robin, Bank of Japan Steps up Coronavirus Stimulus Harding, Robin, Bank of Japan Steps up Coronavirus Stimulus With Bond-buyingWith Bond-buying Pledge, Pledge, Financial Times, April , April
27, 2020. https://www.ft.com/content/7ba5c507-df9e-4107-87eb-73afa2c13e91. 27, 2020. https://www.ft.com/content/7ba5c507-df9e-4107-87eb-73afa2c13e91.
~~369~~378 Harding, Robin, Japan’s Cabinet Approves Extra $1.1 Harding, Robin, Japan’s Cabinet Approves Extra $1.1 ~~Trillion~~T rillion Budget to Counter Recession, Budget to Counter Recession, Financial Times, May , May
27, 2020. https://www.ft.com/content/ce7f3564-c997-339c-ad3d-c6d092fb7f1e. 27, 2020. https://www.ft.com/content/ce7f3564-c997-339c-ad3d-c6d092fb7f1e.
~~370~~379 Harding, Bank of Japan Pledges Harding, Bank of Japan Pledges $1 trillion in Coronavirus Lending. $1 trillion in Coronavirus Lending.
~~371~~380 Quarterly ~~Estimates~~Estim ates of GDP for April - June 2020 (First Preliminary Estimates), Cabinet Office, August Cabinet Office, August 17, 2020. 17, 2020.
~~372~~381 Bank of Japan Bank of Japan ~~Trims~~T rims Growth Forecasts But Predicts Stronger Rebound Growth Forecasts But Predicts Stronger Rebound in 2021, in 2021, Financial ~~Times~~Tim es, October 29, , October 29,
2020. https://www.ft.com/content/6d01dee6-7de4-48bb-8d27-50d3d4e11d16. 2020. https://www.ft.com/content/6d01dee6-7de4-48bb-8d27-50d3d4e11d16.
~~373 Harding, Robin, Japan’s Economy Rebounds 5% in the Third Quarter, Financial Times, November 24, 2020.~~
~~https://www.ft.com/content/2ec0b9b3-ecc4-4056-bacf-cb45c83e4629.~~
~~374 Kihara, Leika, Tetsushi Kajimoto, Bank of Japan Lifts Next Year’s Growth Forecast, Saves Ammunition as Virus~~
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~~China~~
~~According to a recent CRS In Focus,375~~Congressional Research Service 106 Global Economic Effects of COVID-19 prospects for the fourth quarter rate of growth.382 The Bank of Japan announced on January 20, 2021, that the Japanese economy could grow at a slightly faster pace of 3.9% in 2021. An increase in viral cases in January 2021, however, led to a renewed effort at quarantines and lockdowns and raised questions about the timing of an economic recovery.383 China According to a recent CRS In Focus,384 China emerged in June 2020 as the first major country to China emerged in June 2020 as the first major country to
announce a return to economic growth since the outbreak of the COVID-19 pandemic. The announce a return to economic growth since the outbreak of the COVID-19 pandemic. The
government reported 3.2% gross domestic product (GDP) growth in the second quarter and 4.9% government reported 3.2% gross domestic product (GDP) growth in the second quarter and 4.9%
GDP growth in the third quarter of 2020. China is GDP growth in the third quarter of 2020. China is ~~still~~ stil grappling with the economic effects of the grappling with the economic effects of the
COVID-19 pandemic, however, including sluggish domestic consumption, slow recovery in its COVID-19 pandemic, however, including sluggish domestic consumption, slow recovery in its
top export markets, and reliance on government spending and exports to boost initial growth. top export markets, and reliance on government spending and exports to boost initial growth.
China also is facing growing restrictions on its overseas commercial activities and access to China also is facing growing restrictions on its overseas commercial activities and access to
foreign technology and pressures for firms to diversify China-based supply chains. Against this foreign technology and pressures for firms to diversify China-based supply chains. Against this
backdrop, China’s leadership is deliberating the country’s economic direction and national backdrop, China’s leadership is deliberating the country’s economic direction and national
industrial plans for the next 5 to 15 years. industrial plans for the next 5 to 15 years.
To boost economic growth, China has provided an estimated $506 To boost economic growth, China has provided an estimated $506 ~~billion~~ bil ion in stimulus since in stimulus since
February 2020 and increased the government’s budget deficit target to a record high of 3.6% of February 2020 and increased the government’s budget deficit target to a record high of 3.6% of
GDP, up from 2.8% in 2019. China reduced the value-added tax (VAT) rate and introduced VAT GDP, up from 2.8% in 2019. China reduced the value-added tax (VAT) rate and introduced VAT
exemptions for certain goods and services. China’s central bank extended monetary support with exemptions for certain goods and services. China’s central bank extended monetary support with
interest rate cuts, eased loan terms, and injected liquidity into banks. Shifting from efforts to interest rate cuts, eased loan terms, and injected liquidity into banks. Shifting from efforts to
reduce debt, the government announced the issuance of $142.9 reduce debt, the government announced the issuance of $142.9 ~~billion~~bil ion of special treasury bonds of special treasury bonds
for the first time since 2007; increased the quota for local government special bonds (a source of for the first time since 2007; increased the quota for local government special bonds (a source of
infrastructure funding); and fast-tracked issuance of corporate bonds to cover pandemic costs but infrastructure funding); and fast-tracked issuance of corporate bonds to cover pandemic costs but
with potential broader uses. The IMF estimates that the fiscal measures and financing plans with potential broader uses. The IMF estimates that the fiscal measures and financing plans
announced amounted to 4.1% of the China’s GDP, as of July 2020. The government says it seeks announced amounted to 4.1% of the China’s GDP, as of July 2020. The government says it seeks
to control credit risk but the need for additional fiscal and monetary support to boost growth may to control credit risk but the need for additional fiscal and monetary support to boost growth may
undermine this goal. undermine this goal.
Multilateral ~~Response376~~Response385
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,~~377~~386 and IMF Managing Director Kristalina 382 Harding, Robin, Japan’s Economy Rebounds 5% in the T hird Quarter, Financial Times, November 24, 2020. https://www.ft.com/content/2ec0b9b3-ecc4-4056-bacf-cb45c83e4629. 383 Kihara, Leika, T etsushi Kajimoto, Bank of Japan Lifts Next Year’s Growth Forecast, Saves Ammunition as Virus Risks Linger, Reuters, January 20, 2021. 384 CRS In Focus ~~and IMF Managing Director Kristalina~~
~~Georgieva stated the IMF stands ready to deploy the entirety of its current lending capacity—~~
~~approximately $1 trillion—in response to the pandemic and resulting economic crises.378 The~~
~~IMF has already approved several COVID-related programs, including for Bolivia, Chad, the~~

~~Risks Linger, Reuters, January 20, 2021.~~
~~375 CRS In Focus~~ IF11667, IF11667, China’s Economy: Current Trends and Issues, by Karen M. Sutter and Michael D. , by Karen M. Sutter and Michael D.
Sutherland. Sutherland.
~~376~~385 For more information, see CRS For more information, see CRS Report R46342, Report R46342, COVID-19: Role of the International Financial Institutions, by , by
RebeccaRebecca M. Nelson and Martin A. Weiss. M. Nelson and Martin A. Weiss.
~~377~~386 Remarks by IMF Managing Remarks by IMF Managing Director Kristalina Georgieva DuringDirector Kristalina Georgieva During the G20 Finance Ministers and Central Bank Congressional Research Service 107 Global Economic Effects of COVID-19 Georgieva stated the IMF stands ready to deploy the entirety of its current lending capacity—approximately $1 tril ion—in response to the pandemic and resulting economic crises.387 The IMF has already approved several COVID-related programs, including for Bolivia, Chad, the ~~the G20 Finance Ministers and Central Bank~~
~~Governors Meeting, International Monetary Fund, April 15, 2020.~~
~~378 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~~
~~billion.~~
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Democratic Republic of Congo, Kyrgyz Republic, Nigeria, Niger, Rwanda, Madagascar, Democratic Republic of Congo, Kyrgyz Republic, Nigeria, Niger, Rwanda, Madagascar,
Mozambique, Pakistan, and Togo, among others, and additional programs are expected.Mozambique, Pakistan, and Togo, among others, and additional programs are expected.~~379~~388
In addition to loans, the IMF has taken a number of other policy steps to bolster its COVID-19 In addition to loans, the IMF has taken a number of other policy steps to bolster its COVID-19
response. The IMF is tapping its Catastrophe Containment and Relief Trust (CCRT), a donor response. The IMF is tapping its Catastrophe Containment and Relief Trust (CCRT), a donor
country trust fund at the IMF, to cover six months of debt payments owed by 29 lowcountry trust fund at the IMF, to cover six months of debt payments owed by 29 low -income -income
countries to the IMF. The IMF also created a new a new Short-term Liquidity Line.countries to the IMF. The IMF also created a new a new Short-term Liquidity Line.~~380~~389 It is a It is a
revolving and renewable backstop for member countries with very strong economic policies in revolving and renewable backstop for member countries with very strong economic policies in
need of short-term and moderate financial support, and intends to support a country’s liquidity need of short-term and moderate financial support, and intends to support a country’s liquidity
buffers. The IMF also adopted proposals to accelerate Board consideration of member financing buffers. The IMF also adopted proposals to accelerate Board consideration of member financing
requests for emergency financing and doubled (to about $100 requests for emergency financing and doubled (to about $100 ~~billion~~bil ion) access to IMF emergency ) access to IMF emergency
assistance. The International Monetary Fund (IMF) is providing funding to poor and emerging assistance. The International Monetary Fund (IMF) is providing funding to poor and emerging
market economies that are short on financial resources.market economies that are short on financial resources.~~381~~390 If the economic effects of the virus If the economic effects of the virus
persist, countries may need to be proactive in coordinating fiscal and monetary policy responses, persist, 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. similar to actions taken by of the G-20 following the 2008-2009 global financial crisis.
For FY2021, the Administration had requested authorization for about $38 For FY2021, the Administration had requested authorization for about $38 ~~billion~~ bil ion for a 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,
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 additional resources to the IMF, whether the IMF should raise funds by ~~selling~~sel ing a portion of its 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 through a process ~~called~~cal ed an SDR an SDR ~~allocation~~al ocation. .
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.~~382~~391 As of June 1, 2020, the World Bank had approved, or was in As of June 1, 2020, the World Bank had approved, or was in
the process of approving, 150 COVID-19 projects, totaling $15 the process of approving, 150 COVID-19 projects, totaling $15 ~~billion~~bil ion, in 99 countries., in 99 countries.~~383~~392
Examples of approved projects include $47 Examples of approved projects include $47 ~~million~~mil ion for the Democratic Republic of Congo to for the Democratic Republic of Congo to
support containment strategies, train medical staff, and provide equipment for diagnostic testing support containment strategies, train medical staff, and provide equipment for diagnostic testing
to ensure rapid case detection; $11.3 to ensure rapid case detection; $11.3 ~~million~~mil ion for Tajikistan to expand intensive care capacity; $20 for Tajikistan to expand intensive care capacity; $20
~~million~~ mil ion for Haitifor Haiti to support diagnostic testing, rapid response teams, and outbreak containment; to support diagnostic testing, rapid response teams, and outbreak containment;
~~and $1 billion for India to support screening, contract tracing, and laboratory diagnostics, procure~~
~~personal protective equipment, and set up new isolation wards, among other projects.384~~
~~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~~
~~FY2019. In April 2020, the World Bank also announced its plans to establish a new multi-donor~~

~~379 IMF Lending Tracker, https://www.imf.org/en/Topics/imf-and-covid19/COVID-Lending-Tracker.~~
~~380 “IMF Adds Liquidity~~ Governors Meeting, International Monetary Fund, April 15, 2020. 387 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 billion. 388 IMF Lending T racker, https://www.imf.org/en/T opics/imf-and-covid19/COVID-Lending-T racker. 389 “IMF Adds Liquidity Line to Strengthen COVID-19 Response,” International Monetary Fund, April 15, 2020. Line to Strengthen COVID-19 Response,” International Monetary Fund, April 15, 2020.
~~381~~390 Politi, James, “ Politi, James, “ IMF Sets AsideIMF Sets Aside $50bn for Covid-19-Hit Countries,” $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.
~~382~~391 Remarks by World Bank Group President David Malpass Remarks by World Bank Group President David Malpass on G20 Finance Ministers Conference Call on COVIDon G20 Finance Ministers Conference Call on COVID -19, -19,
March 23, 2020. March 23, 2020.
~~383~~392 https://maps.worldbank.org/. Accessed https://maps.worldbank.org/. Accessed ~~on June 1, 2020.~~
~~384 World Bank, “World Bank Group Launches First Operations for COVID-19 (Coronavirus) Emergency Health~~
~~Support, Strengthening Developing Country Response,” Press Release, April 2, 2020.~~
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on June 1, 2020. Congressional Research Service 108 Global Economic Effects of COVID-19 and $1 bil ion for India to support screening, contract tracing, and laboratory diagnostics, procure personal protective equipment, and set up new isolation wards, among other projects.393 Over the next 15 months, the World Bank Group estimates it could deploy as much as $160 bil ion 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 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).~~385~~394 The new fund is to complement, and augment, the The new fund is to complement, and augment, the
$160 bil ion ~~$160 billion~~ of financing provided by the World Bank. of financing provided by the World Bank.
In addition to the World Bank, which has a near-global membership and operates in many sectors In addition to the World Bank, which has a near-global membership and operates in many sectors
in developing countries worldwide, a number of in developing countries worldwide, a number of ~~smaller~~smal er and more specialized multilateral and more specialized multilateral
development banks (MDBs) are also mobilizingdevelopment banks (MDBs) are also mobilizing resources in response to the COVID-19 resources in response to the COVID-19
pandemic. The United States is a member of a number of pandemic. The United States is a member of a number of ~~regionally~~ regional y focused MDBs, including the focused MDBs, including the
African Development Bank, the Asian Development Bank, the European Bank for Reconstruction African Development Bank, the Asian Development Bank, the European Bank for Reconstruction
and Development, and the Inter-American Development Bank, as and Development, and the Inter-American Development Bank, as ~~well as the functionally~~wel as the functional y focused focused
International Fund for Agricultural Development. The United States does not belong to some International Fund for Agricultural Development. The United States does not belong to some
MDBs, including the Chinese-led Asian Infrastructure Investment Bank and the New MDBs, including the Chinese-led Asian Infrastructure Investment Bank and the New
Development Bank created by the BRICS countries (Brazil, Russia, India, China, and South Development Bank created by the BRICS countries (Brazil, Russia, India, China, and South
Africa), the European Investment Bank, or the Islamic Development Bank. Africa), the European Investment Bank, or the Islamic Development Bank.
In response to COVID-19, MDBs are reprogramming existing projects, establishing and funding In response to COVID-19, MDBs are reprogramming existing projects, establishing and funding
with existing resources lending facilities dedicated to the COVID-19 response, and streamlining with existing resources lending facilities dedicated to the COVID-19 response, and streamlining
approval procedures. According to the President of the World Bank, other multilateral approval procedures. According to the President of the World Bank, other multilateral
development banks have committed roughly $80 development banks have committed roughly $80 ~~billion~~ bil ion over the next 15 months to respond to over the next 15 months to respond to
COVID-19.COVID-19.~~386~~395 Together with the World Bank’s commitment of $160 Together with the World Bank’s commitment of $160 ~~billion, $240 billion~~ bil ion, $240 bil ion in in
financing is to be made availablefinancing is to be made available to developing countries from the MDBs during this time to developing countries from the MDBs during this time
period.period.~~387~~396
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 should pursue fiduciary reforms that would ~~allow~~al ow them to expand their lending based on existing them to expand their lending based on existing
resources, particularly lending against donor country guarantees to the institutions (resources, particularly lending against donor country guarantees to the institutions (~~called~~
~~“callable~~cal ed “cal able” capital). ” capital).
International Economic Cooperation
On March 16, 2020, the leaders of the G-7 countries (Canada, France, Germany, Italy, Japan, the On March 16, 2020, the leaders of the G-7 countries (Canada, France, Germany, Italy, Japan, the
United Kingdom, and the United States) held an emergency summit by teleconference to discuss United Kingdom, and the United States) held an emergency summit by teleconference to discuss
and coordinate their policy responses to the economic and coordinate their policy responses to the economic ~~fallout~~fal out from the global spread of COVID- from the global spread of COVID-
19. In the joint statement released by the G-7 leaders after the emergency teleconference summit, 19. In the joint statement released by the G-7 leaders after the emergency teleconference summit,
the leaders stressed they are committed to doing “whatever is necessary to ensure a strong global the leaders stressed they are committed to doing “whatever is necessary to ensure a strong global
~~response through closer cooperation and enhanced cooperation of efforts.”388 The 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 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 World Bank~~

~~385~~ 393 World Bank, “World Bank Group Launches First Operations for COVID-19 (Coronavirus) Emergency Health Support, Strengthening Developing Country Response,” Press Release, April 2, 2020. 394 World Bank, “World Bank Group to Launch New World Bank, “World Bank Group to Launch New Multi-donor Multi-donor ~~Trust~~T rust Fund to help Countries Prepare for Disease Fund to help Countries Prepare for Disease
Outbreaks,” Press Release,Outbreaks,” Press Release, April 17, 2020. April 17, 2020.
~~386~~395 David Malpass, “ David Malpass, “ Remarks to G20 Finance Ministers,” World Bank, April 15, 2020. Remarks to G20 Finance Ministers,” World Bank, April 15, 2020.
~~387~~396 World Bank Group President David Malpass: World Bank Group President David Malpass: Remarks to G20 Finance Ministers, April 15, 2020.Remarks to G20 Finance Ministers, April 15, 2020.
~~388 White House, G-7 Leaders’ Statement, March 16, 2020, https://www.whitehouse.gov/briefings-statements/g7-~~
~~leaders-statement/.~~
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~~Group, as well~~ response through closer cooperation and enhanced cooperation of efforts.”397 The 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 wel as 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 World Bank Group, as wel as other international organizations, to support countries worldwide as part of a as other international organizations, to support countries worldwide as part of a
coordinated global response.coordinated global response.~~389~~
398 Saudi Arabia, the 2020 chair of the G-20, Saudi Arabia, the 2020 chair of the G-20, ~~called~~cal ed an emergency G-20 summit on March 25 to an emergency G-20 summit on March 25 to
discuss a response to the pandemic.discuss a response to the pandemic.~~390~~399 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.~~391~~400 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.~~392~~401
Analysts are hopeful that the recent G-7 summit, and a G-20 summit, Analysts are hopeful that the recent G-7 summit, and a G-20 summit, ~~will~~ wil mark a shift towards mark a shift towards
greater international cooperation at the highest (leader) levels in combatting the economic greater international cooperation at the highest (leader) levels in combatting the economic ~~fallout~~
fal out from the spread of COVID-19.from the spread of COVID-19.~~393~~402 An emergency meeting of G-7 finance ministers on March 3, An emergency meeting of G-7 finance ministers on March 3,
2020, 2020, ~~fell~~ fel short of the aggressive and concrete coordinated action that investors and economists short of the aggressive and concrete coordinated action that investors and economists
had been hoping for, and U.S. and European stock markets had been hoping for, and U.S. and European stock markets ~~fell~~ fel after the meeting.after the meeting.~~394~~403 More More
~~generally~~general y, governments have been divided over the appropriate response and in some cases have , governments have been divided over the appropriate response and in some cases have
acted acted ~~unilaterally~~unilateral y, particularly when closing borders and imposing export restrictions on medical , 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 needed to address the economic ~~fallout~~fal out from COVID-19, but several concerns loom about the G- from COVID-19, but several concerns loom about the G-
20’s ability to deliver.20’s ability to deliver.~~395~~404 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 Meanwhile, international organizations including the IMF and multilateral development banks, development banks,
have tried to forge ahead with economic support given their current resources. have tried to forge ahead with economic support given their current resources. ~~Additionally~~Additional y, the , the
Financial Stability Board (FSB), an international body including the United States that monitors Financial Stability Board (FSB), an international body including the United States that monitors
the global financial system and makes regulations to ensure stability, released a statement on the global financial system and makes regulations to ensure stability, released a statement on
March 20, 2020, that its members are actively cooperating to maintain financial stability during March 20, 2020, that its members are actively cooperating to maintain financial stability during
market stress related to COVID-19.market stress related to COVID-19.~~396~~405 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~~
~~participants and for businesses and households facing temporary difficulties from COVID-19,~~
~~while noting that many FSB members have already taken action to release available capital and~~
~~liquidity buffers.~~

~~389 Ibid.~~
~~390 “Spain Says Saudi~~ 397 White House, G-7 Leaders’ Statement, March 16, 2020, https://www.whitehouse.gov/briefings-statements/g7-leaders-statement/. 398 Ibid. 399 “Spain Says Saudi Arabia to Cal G-20 to Meet on Covid-19 in Coming Days,” Arabia to Cal G-20 to Meet on Covid-19 in Coming Days,” Reuters, March 16, 2020. , March 16, 2020.
~~391 The~~400 T he G-20 includes G-20 includes the G-7 countries plusthe G-7 countries plus Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia, Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia,
SaudiSaudi Arabia,Arabia, South Africa, South Korea, South Africa, South Korea, ~~Turkey~~T urkey, and the European Union (EU). , and the European Union (EU).
~~392~~401 For more information about the G-20, see CRS For more information about the G-20, see CRS Report R40977, Report R40977, International Economic Policy Coordination at the
G-7 and the G-20, by Rebecca, by Rebecca M. Nelson. M. Nelson.
~~393~~402 See See for example, Jennifer Rankin, “EU Leaders Dividedfor example, Jennifer Rankin, “EU Leaders Divided on Howon How to Protect Economies after Covid-19,” to Protect Economies after Covid-19,” The
Guardian, March 14, 2020. , March 14, 2020.
~~394~~403 Jack Ewing Jack Ewing and Jeanna Smialek,and Jeanna Smialek, “Economic Powers Vow“Economic Powers Vow to Fight Crisis,”to Fight Crisis,” New York Times, March 3, 2020. , March 3, 2020.
~~395~~404 Matthew Goodman and Mark Sobel, Matthew Goodman and Mark Sobel, ~~“Time~~ “T ime to Pull the G-20 Fire Bell,” Center for Strategic and International to Pull the G-20 Fire Bell,” Center for Strategic and International
Studies,Studies, March 18, 2020. March 18, 2020.
~~396~~405 “FSB “FSB Coordinates Financial Sector Work to Buttress the Economy in Response to Covid-19,” Financial StabilityCoordinates Financial Sector Work to Buttress the Economy in Response to Covid-19,” Financial Stability
~~Board, Press Release 6/2020, March 20, 2020.~~
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within existing international standards to provide continued access to funding for market participants and for businesses and households facing temporary difficulties from COVID-19, while noting that many FSB members have already taken action to release available c apital and 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 2020 was tepid, but ~~still~~ stil was estimated to be positive. Countries highly dependent on trade—was estimated to be positive. Countries highly dependent on trade—
Canada, Germany, Italy, Japan, Mexico, and South Korea—and commodity exporters are now Canada, Germany, Italy, Japan, Mexico, and South Korea—and commodity exporters are now
projected to be the most negatively affected by the slowdown in economic activity associated projected to be the most negatively affected by the slowdown in economic activity associated
with the pandemic.with the pandemic.~~397~~406 In addition, travel bans and quarantines continue to take heavy economic In addition, travel bans and quarantines continue to take heavy economic
toll on a broad range of countries. The OECD notes that production declines in China have toll on a broad range of countries. The OECD notes that production declines in China have
~~spillover~~spil over effects around the world given China’s role in producing computers, electronics, 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 pharmaceuticals and transport equipment, and as a primary source of demand for many
commodities.commodities.~~398~~407 Across Asia, some forecasters argue that recent data indicate that Japan, South Across Asia, some forecasters argue that recent data indicate that Japan, South
Korea, Thailand, the Philippines, Indonesia, Malaysia, and VietnamKorea, Thailand, the Philippines, Indonesia, Malaysia, and Vietnam could experience an could experience an
economic recession in 2020.economic recession in 2020.~~399~~408
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
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.~~400~~
409 These projections likely These projections likely ~~will~~ wil be revised downward due to the slowdown in global trade associated 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 countries, in particular, likely ~~will~~ wil experience a greater slowdown in growth than forecasted in 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.
Asian Development Bank 2020 Forecast
According to the Asian Development Bank’s (ADB) September 2020 forecast, GDP growth for According to the Asian Development Bank’s (ADB) September 2020 forecast, GDP growth for
developing Asia is projected to contract by 0.7% in 2020, reportedly the first decline in economic developing Asia is projected to contract by 0.7% in 2020, reportedly the first decline in economic
activity in the region in six decades, reflecting the slowdown in global trade and national activity in the region in six decades, reflecting the slowdown in global trade and national
quarantines.quarantines.~~401~~410 Similar to other groups, the ADB’s forecasts indicate progressively more negative Similar to other groups, the ADB’s forecasts indicate progressively more negative
rates of growth over the April through September period, while also forecasting a rebound in rates of growth over the April through September period, while also forecasting a rebound in
growth rates in 2021, including a growth rate of 6.8% in developing Asia. Annual rates of growth growth rates in 2021, including a growth rate of 6.8% in developing Asia. Annual rates of growth
in three-fourths of the region’s economies are projected to decline in 2020. in three-fourths of the region’s economies are projected to decline in 2020.
~~ADB sub-regional forecasts indicate that East Asia is projected to experience an overall positive~~
~~rate of growth in 2020, primarily reflecting the dominating influence of the Chinese economy,~~
~~which is projected to grow by nearly 2% in 2020 and 7% in 2021 as indicated in Figure 23. In~~
~~contrast, Hong Kong, which had already experienced a slowing rate of growth primarily as a~~
~~result of domestic political turmoil and trade issues between the United States and China, was~~
~~projected to experience a 6.5% decline in economic growth in 2020, but rebound by 5.1% in~~

~~397~~ Board, Press Release 6/2020, March 20, 2020. 406 OECD Interim Economic Assessment, p. 7. p. 7.
~~398~~407 Ibid., Ibid., p. 5. p. 5.
~~399~~408 Arnold, Martin Arnold and Valentina Romei, “European Factory Output Plummets as Covid-19 Shutdown Arnold, Martin Arnold and Valentina Romei, “European Factory Output Plummets as Covid-19 Shutdown Bites,” Bites,”
Financial ~~Times~~Tim es, 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.
~~400~~409 Tentative Stabilization, Sluggish Recovery? World Economic Outlook Update, January 20, 2020, , January 20, 2020, ~~The~~T he International 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.
~~401~~410 Asian Development Outlook 2020 Update, Asian Development Bank, September 2020. , Asian Development Bank, September 2020.
Congressional Research Service Congressional Research Service

~~109~~111 Global Economic Effects of COVID-19 ADB sub-regional forecasts indicate that East Asia is projected to experience an overal positive rate of growth in 2020, primarily reflecting the dominating influence of the Chinese economy, which is projected to grow by nearly 2% in 2020 and 7% in 2021 as indicated in Figure 23. In contrast, Hong Kong, which had already experienced a slowing rate of growth primarily as a result of domestic political turmoil and trade issues between the United States and China, was projected to experience a 6.5% decline in economic growth in 2020, but rebound by 5.1% in

~~Global Economic Effects of COVID-19~~

2021. South Asia, which includes India, is projected to experience a decline in its annual GDP 2021. South Asia, which includes India, is projected to experience a decline in its annual GDP
growth rate of 6.8% in 2020, but a positive rate of growth in 2021 by 7.1%, driven in part by a growth rate of 6.8% in 2020, but a positive rate of growth in 2021 by 7.1%, driven in part by a
turn-around in India’s growth rate from -9.0 in 2020 to a positive 8.0% in 2021. Countries in the turn-around in India’s growth rate from -9.0 in 2020 to a positive 8.0% in 2021. Countries in the
region have implemented different measures to contain the spread of the virus, reflecting region have implemented different measures to contain the spread of the virus, reflecting
differences in the extent of viral infections. Across governments within the region, total fiscal differences in the extent of viral infections. Across governments within the region, total fiscal
support totaled $3.6 support totaled $3.6 ~~trillion~~tril ion by the end of August 2020, divided between income support measures by the end of August 2020, divided between income support measures
and measures intended to support liquidity. Similar to other regions and countries, growth and measures intended to support liquidity. Similar to other regions and countries, growth
prospects in developing Asia depend on the length and depth of the health crisis and the prospects in developing Asia depend on the length and depth of the health crisis and the
protracted nature of trade tensions between the United States and China. protracted nature of trade tensions between the United States and China.
Figure 23. Asian Development Bank 2020 and 2021 GDP Forecasts
In percentage change In percentage change

Source: Asian DevelopmentAsian Development Bank. Created by CRS. Bank. Created by CRS.
Emerging Markets
The combined impact of COVID-19, an increase in the value of the dollar, and an oil price war The combined impact of COVID-19, an increase in the value of the dollar, and an oil price war
between Saudi Arabia and Russia are hitting developing and emerging economies hard. Not between Saudi Arabia and Russia are hitting developing and emerging economies hard. Not ~~all~~ al of of
these countries have the resources or policy flexibility to respond effectively. According to figures these countries have the resources or policy flexibility to respond effectively. According to figures
compiled by the Institute for International Finance (IIF), cumulative capital outflows from compiled by the Institute for International Finance (IIF), cumulative capital outflows from
developing countries since January 2020 are double the level experienced during the 2008/2009 developing countries since January 2020 are double the level experienced during the 2008/2009
crisis and crisis and ~~substantially~~substantial y higher than recent market events ( higher than recent market events (Figure 24).).~~402~~

~~402 These~~411 411 T hese include concerns in 2015 over China’s renminbi devaluation and the so include concerns in 2015 over China’s renminbi devaluation and the so -called “-called “~~Taper Tantrum~~T aper T antrum” in 2013 when ” in 2013 when
the Federal Reserve announced that it would slowthe Federal Reserve announced that it would slow ~~down~~ down the pace of its post global financial crisis asset the pace of its post global financial crisis asset ~~purchases~~purchase s. .
SergeiSergei Lanau andLanau and Jonathan Fortun, “Economic Views—Jonathan Fortun, “Economic Views—~~The~~T he COVID-19 Shock to EM Flows,” COVID-19 Shock to EM Flows,” Institute for Institute for
International Finance, March 17, 2020. International Finance, March 17, 2020.
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Figure 24. Capital Flows to Emerging Markets in Global Shocks

Source: OriginalOriginal graphic and data fromgraphic and data from International Institute for Finance using data from Haver. Edited by CRS International Institute for Finance using data from Haver. Edited by CRS
for clarification. for clarification.
The impact of the price war and lower energy demand associated with a COVID-19-related The impact of the price war and lower energy demand associated with a COVID-19-related
economic slowdown is economic slowdown is ~~especially~~especial y hard on oil and gas exporters, some of whose currencies are at hard on oil and gas exporters, some of whose currencies are at
record lows (record lows (Figure 25). 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;
South Africa’s rand has South Africa’s rand has ~~fallen 18%403~~fal en 18%412 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%.~~404~~413 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.~~405~~414
Depending on individual Depending on individual levels of foreign exchange reserves and the duration of the capital flow levels of foreign exchange reserves and the duration of the capital flow
slowdown, some countries may have sufficient buffers to weather the slowdown, while others slowdown, some countries may have sufficient buffers to weather the slowdown, while others
~~will likely~~ wil likely need to make some form of current account adjustment (reduce spending, raise taxes, need to make some form of current account adjustment (reduce spending, raise taxes,
etc.). Several countries, such as Iran and Venezuela, have already asked the IMF for financial etc.). Several countries, such as Iran and Venezuela, have already asked the IMF for financial
assistance and others are likely to follow.assistance and others are likely to follow.~~406~~415 (Venezuela’s request was quickly rebuffed due to (Venezuela’s request was quickly rebuffed due to

~~403~~ 412 Paul Wallace, “Here’s How Paul Wallace, “Here’s How the Oil Crash isthe Oil Crash is Hitting Emerging Market Currencies,” 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.
~~404~~413 Nevzat Devranoglu, “ Nevzat Devranoglu, “~~Turkish~~T urkish Lira Hits Weakest Level Since Lira Hits Weakest Level Since 2018 Currency Crisis2018 Currency Crisis ~~Due~~ Due to Covid-19,” to Covid-19,” Nasdaq, ,
March 17, 2020, https://www.nasdaq.com/articles/turkish-lira-hits-weakestMarch 17, 2020, https://www.nasdaq.com/articles/turkish-lira-hits-weakest -level-since-2018-currency-crisis-due-to--level-since-2018-currency-crisis-due-to-
Covid-19-2020-03-17. Covid-19-2020-03-17.
~~405~~414 Johnson, Steve, “Currency Sell-Off Johnson, Steve, “Currency Sell-Off ~~Threatens~~T hreatens Emerging Market Response to Covid-19,” Emerging Market Response to Covid-19,” Financial Times, March 3, , March 3,
2020. https://www.ft.com/content/94ad9d70-2ca2-4490-96fb-5b01b509ed37. 2020. https://www.ft.com/content/94ad9d70-2ca2-4490-96fb-5b01b509ed37.
~~406~~415 “COVID-19-Hit Iran Asks IMF for Aid “COVID-19-Hit Iran Asks IMF for Aid amid USamid US Sanctions,” Sanctions,” Deutsche Walle, March 13, 2020, , March 13, 2020,
https://www.dw.com/en/covid-19-hit-iran-asks-imf-for-aid-amid-us-sanctions/a-52763114. Iran is currently under U.S. https://www.dw.com/en/covid-19-hit-iran-asks-imf-for-aid-amid-us-sanctions/a-52763114. Iran is currently under U.S.
sanctions, which include,sanctions, which include, among other things, among other things, ~~prohibitions~~prohibitio ns on the ability of the United States to vote in favor of lending on the ability of the United States to vote in favor of lending
IMF or World Bank assistance to Iran. IMF or World Bank assistance to Iran. ~~The~~T he United States, however, cannot unilaterally block lending to a particular United States, however, cannot unilaterally block lending to a particular
country. Approving an IMF or World Bank loan requirescountry. Approving an IMF or World Bank loan requires a majority of the a majority of the ~~total~~t otal voting power and the U.S. voting power and the U.S. voting voting
power is 16.5% of the total voting power at the IMF and 15.4% at the World Bank. Iran has not borrowed from the IMF power is 16.5% of the total voting power at the IMF and 15.4% at the World Bank. Iran has not borrowed from the IMF
since 1962, but didsince 1962, but did ~~borrow~~ borrow from the World Bank between 2003 and 2005 over U.S. opposition. from the World Bank between 2003 and 2005 over U.S. opposition.
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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.~~407~~416) )
Figure 25.Depreciation Against the Dollar Since January 1, 2020

Source: Created by CRS. Data from Bloomberg. Created by CRS. Data from Bloomberg.
International Economic Cooperation
InitialInitial efforts at coordinating the economic response to the COVID-19 pandemic across countries 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 have acted ~~unilaterally~~unilateral y, particularly when closing borders and imposing export restrictions on , particularly when closing borders and imposing export restrictions on
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, Italy, Japan, the United Kingdom, and the United States) finance ministers on March 3, 2020, ~~fell~~
fel 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 hoping for, and U.S. and European stock markets ~~fell~~ fel sharply after the meeting.sharply after the meeting.~~408~~417 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 discuss and coordinate their policy responses to the economic ~~fallout~~fal out from the global spread of 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.”~~409~~418 The The
countries pledged to coordinate research efforts, increase the availability of medical equipment; countries pledged to coordinate research efforts, increase the availability of medical equipment;
mobilizemobilize “the full range” of policy instruments, including monetary and fiscal measures as “the full range” of policy instruments, including monetary and fiscal measures as ~~well~~ wel as as
targeted actions, to support workers, companies, and sectors most affected by the spread of targeted actions, to support workers, companies, and sectors most affected by the spread of
COVID-19; task the finance ministers to coordinate on a weekly basis, and direct the IMF and the COVID-19; task the finance ministers to coordinate on a weekly basis, and direct the IMF and the
World Bank Group, as World Bank Group, as ~~well~~ wel as other international organizations, to support countries worldwide as other international organizations, to support countries worldwide
as part of a coordinated global response.as part of a coordinated global response.~~410~~419 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.~~411~~

~~407~~420 416 Joshua Goodman, “ Joshua Goodman, “ IMF Rejects Maduro’sIMF Rejects Maduro’s ~~Bid~~ Bid for Emergency Loan to Fight Virus,”for Emergency Loan to Fight Virus,” StarTribune, ,
http://www.startribune.com/venezuela-seeks-emergency-5-billion-imf-loan-to-fight-virus/568868442/. http://www.startribune.com/venezuela-seeks-emergency-5-billion-imf-loan-to-fight-virus/568868442/.
~~408~~417 Jack Ewing Jack Ewing and Jeanna Smialek,and Jeanna Smialek, “Economic Powers Vow“Economic Powers Vow to Fight Crisis,”to Fight Crisis,” New York Times, March 3, 2020. , March 3, 2020.
~~409~~418 White House, G-7 White House, G-7 Leaders’ Statement, March 16, 2020, https://www.whitehouse.gov/briefings-statements/g7-Leaders’ Statement, March 16, 2020, https://www.whitehouse.gov/briefings-statements/g7-
leaders-statement/. leaders-statement/.
~~410~~419 Ibid. Ibid.
~~411~~420 “Pompeo, G-7 Foreign Ministers Spar over ‘Wuhan Virus’,” “Pompeo, G-7 Foreign Ministers Spar over ‘Wuhan Virus’,” Politico, March 25, 2020; Katrin Bennhold and David , March 25, 2020; Katrin Bennhold and David
E. Sanger,E. Sanger, “U.S. Offered ‘Large Sum’“U.S. Offered ‘Large Sum’ to German Company for Access to Coronavirus Vaccine Research, German to German Company for Access to Coronavirus Vaccine Research, German
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link to page link to page ~~118~~120 link to page link to page ~~118~~120 Global Economic Effects of COVID-19

The United States is chairing the G-7 in 2020, and while the June summit at Camp David had The United States is chairing the G-7 in 2020, and while the June summit at Camp David had
been canceled due to concerns about COVID-19, on May 20, President Trump indicated that the been canceled due to concerns about COVID-19, on May 20, President Trump indicated that the
summit may be held after summit may be held after ~~all~~al . .
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.~~412~~421 Even though G-20 Even though G-20
coordination is widely viewed as critical in the response to the global financial crisis of 2008-coordination is widely viewed as critical in the response to the global financial crisis of 2008-
2009, several factors may have complicated G-20 coordination in the current context: the Trump 2009, several factors may have complicated G-20 coordination in the current context: the Trump
Administration’s prioritization of an “America First” foreign policy over one committed to Administration’s prioritization of an “America First” foreign policy over one committed to
multilateralism;multilateralism; the 2020 chair of the G-20, Saudi Arabia, is embroiled in its own domestic the 2020 chair of the G-20, Saudi Arabia, is embroiled in its own domestic
political issues and oil price war; and U.S.-China tensions make G-20 consensus more difficult.political issues and oil price war; and U.S.-China tensions make G-20 consensus more difficult.~~413~~422
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.~~414~~423 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 (seewith 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 Meanwhile, international organizations including the IMF and multilateral development banks, development banks,
have tried to forge ahead with economic support given their current resources. have tried to forge ahead with economic support given their current resources. ~~Additionally~~Additional y, the , the
Financial Stability Board (FSB), an international body including the United States that monitors Financial Stability Board (FSB), an international body including the United States that monitors
the global financial system and makes regulations to ensure stability, released a statement on the global financial system and makes regulations to ensure stability, released a statement on
March 20, 2020, that its members are actively cooperating to maintain financial stability during March 20, 2020, that its members are actively cooperating to maintain financial stability during
market stress related to COVID-19.market stress related to COVID-19.~~415~~424 The FSB is encouraging governments to use flexibility The FSB is encouraging governments to use flexibility
within existing international standards to provide continued access to funding for market within existing international standards to provide continued access to funding for market
participants and for businesses and households facing temporary difficulties from COVID-19, participants and for businesses and households facing temporary difficulties from COVID-19,
while noting that many FSB members have already taken action to release availablewhile noting that many FSB members have already taken action to release available capital and capital and
~~liquidity~~ liquidity buffers. buffers.
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.~~416~~425 In Q3 2019—before the In Q3 2019—before the
outbreak of COVID-19—global debt levels reached an outbreak of COVID-19—global debt levels reached an ~~all~~al -time high of nearly $253 -time high of nearly $253 ~~trillion~~tril ion, about , about
320% of global GDP.320% of global GDP.~~417~~426 About 70% of global debt is held by advanced economies and about 30% About 70% of global debt is held by advanced economies and about 30%
is held by emerging markets. is held by emerging markets. ~~Globally~~Global y, most debt is held by nonfinancial corporations (29%), , most debt is held by nonfinancial corporations (29%),
governments (27%) and financial corporations (24%), followed by households (19%). Debt in governments (27%) and financial corporations (24%), followed by households (19%). Debt in

~~Officials Say,” New York Times, March 15, 2020.~~
~~412 The G-20 includes the G-7 countries plus~~ Officials Say,” New York T imes, March 15, 2020. 421 T he G-20 includes the G-7 countries plus Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia, Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia,
SaudiSaudi Arabia,Arabia, South Africa, South Korea, South Africa, South Korea, ~~Turkey~~T urkey, and the European Union (EU)., and the European Union (EU).
~~413~~ 422 Matthew Goodman and Mark Sobel, Matthew Goodman and Mark Sobel, ~~“Time~~ “T ime to Pull the G-20 Fire Bell,” Center for Strategic and International to Pull the G-20 Fire Bell,” Center for Strategic and International
Studies,Studies, March 18, 2020. March 18, 2020.
~~414~~423 Matthew Goodman, Stephanie Segal, Matthew Goodman, Stephanie Segal, and Mark Sobel,and Mark Sobel, “Assessing“Assessing the G20 Virtualthe G20 Virtual Summit,” Center for Strategic Summit,” Center for Strategic
and International Studies, March 27, 2020. and International Studies, March 27, 2020.
~~415~~424 “FSB “FSB Coordinates Financial Sector Work to Buttress the Economy in Response to Covid-19,” Financial Stability Coordinates Financial Sector Work to Buttress the Economy in Response to Covid-19,” Financial Stability
Board, Press Release 6/2020, March 20, 2020. Board, Press Release 6/2020, March 20, 2020.
~~416~~425 John Plender, “ John Plender, “~~The~~T he Seeds of the Next Debt Crisis,” Seeds of the Next Debt Crisis,” Financial Times, March 4, 2020. , March 4, 2020.
~~417~~426 Emre Emre ~~Tiftik~~T iftik, Khadija Mahmood, Jadranka Poljak, and Sonja Gibbs,, Khadija Mahmood, Jadranka Poljak, and Sonja Gibbs, “Global Debt Monitor: Sustainability Matters,” “Global Debt Monitor: Sustainability Matters,”
Institute for International Finance, January 13, 2020.This includes debt heldInstitute for International Finance, January 13, 2020.This includes debt held by governments, financial institutions, by governments, financial institutions,
nonfinancial institutions, and households. nonfinancial institutions, and households.
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emerging markets has nearly doubled since 2010, primarily driven by borrowing from state- emerging markets has nearly doubled since 2010, primarily driven by borrowing from state-
owned enterprises. owned enterprises.
High debt levels make borrowers vulnerable to shocks that disrupt revenue and inflows of new High debt levels make borrowers vulnerable to shocks that disrupt revenue and inflows of new
financing. The disruption in economic activity associated with COVID-19 is a wide-scale financing. The disruption in economic activity associated with COVID-19 is a wide-scale
exogenous shock that exogenous shock that ~~will~~ wil make it significantly more difficult for many private borrowers make it significantly more difficult for many private borrowers
(corporations and households) and public borrowers (governments) around the world to repay (corporations and households) and public borrowers (governments) around the world to repay
their debts. COVID-19 has hit the revenue of corporations in a range of industries: factories are their debts. COVID-19 has hit the revenue of corporations in a range of industries: factories are
ceasing production, brick-and-mortar retail stores and restaurants are closing, commodity prices ceasing production, brick-and-mortar retail stores and restaurants are closing, commodity prices
have plunged (Bloomberg commodity price index—a basket of oil, metals, and food prices—has have plunged (Bloomberg commodity price index—a basket of oil, metals, and food prices—has
dropped 27% since the start of the year and is now at its lowest level since 1986), and overseas dropped 27% since the start of the year and is now at its lowest level since 1986), and overseas
and in some cases domestic travel is being curtailed.and in some cases domestic travel is being curtailed.~~418~~427 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.~~419~~428
Households are facing a rapid increase in unemployment and, in many developing countries, a Households are facing a rapid increase in unemployment and, in many developing countries, a
decline in remittances. With fewer resources, corporations and households may default on their decline in remittances. With fewer resources, corporations and households may default on their
debts, absent government intervention. These defaults debts, absent government intervention. These defaults ~~will~~ wil result in a decline in bank assets, result in a decline in bank assets,
making it difficult for banks to extend new loans during the crisis or, more severely, creating making it difficult for banks to extend new loans during the crisis or, more severely, creating
solvency problems for banks. Meanwhile, many governments are solvency problems for banks. Meanwhile, many governments are ~~dramatically~~dramatical y increasing increasing
spending to combat the pandemic, and are likely to face sharp reductions in revenue, putting spending to combat the pandemic, and are likely to face sharp reductions in revenue, putting
pressure on public finances and raising the likelihoodpressure on public finances and raising the likelihood of sovereign (government) defaults. Debt of sovereign (government) defaults. Debt
dynamics are particularly problematic in emerging economies, where debt obligations dynamics are particularly problematic in emerging economies, where debt obligations
denominated in foreign currencies (denominated in foreign currencies (~~usually~~usual y U.S. dollars). Many emerging market currencies have U.S. dollars). Many emerging market currencies have
depreciated since the outbreak of the pandemic, raising the value of their debts in terms of local depreciated since the outbreak of the pandemic, raising the value of their debts in terms of local
currency. currency.
Governments Governments ~~will~~ wil face difficult choices if there is a widespread wave of defaults. Most face difficult choices if there is a widespread wave of defaults. Most
governments have signaled a commitment to or already implemented policies to support those governments have signaled a commitment to or already implemented policies to support those
~~economically~~economical y impacted by the pandemic. These governments face decisions about the type of impacted by the pandemic. These governments face decisions about the type of
assistance to provide (loans versus direct payments), the amount of assistance to provide, how to assistance to provide (loans versus direct payments), the amount of assistance to provide, how to
~~allocate~~al ocate rescue funds, and what conditions if any to attach to funds. Governments have rescue funds, and what conditions if any to attach to funds. Governments have
undertaken extraordinary fiscal and monetary measures to combat the crisis. However, undertaken extraordinary fiscal and monetary measures to combat the crisis. However,
developing countries that are constrained by limited financial resources and where health systems developing countries that are constrained by limited financial resources and where health systems
could quickly become overloaded are particularly vulnerable. could quickly become overloaded are particularly vulnerable.
In terms of defaults by governments (sovereign defaults), emergency assistance is In terms of defaults by governments (sovereign defaults), emergency assistance is ~~generally~~general y
provided by the IMF, and sometimes paired with additional rescue funds from other governments provided by the IMF, and sometimes paired with additional rescue funds from other governments
on a bilateral basis. The IMF and other potential donor countries on a bilateral basis. The IMF and other potential donor countries ~~will~~ wil need to consider whether need to consider whether
the IMF has adequate resources to respond to the crisis, how to the IMF has adequate resources to respond to the crisis, how to ~~allocate~~al ocate funding if the demand for funding if the demand for
funding exceeds the amount available, what conditions should be attached to rescue funding, and funding exceeds the amount available, what conditions should be attached to rescue funding, and
whether IMF programs should be paired with a restructuring of the government’s debt (“burden whether IMF programs should be paired with a restructuring of the government’s debt (“burden
sharing” with private investors). sharing” with private investors).
International efforts are underway to help the most vulnerable developing countries grapple with International efforts are underway to help the most vulnerable developing countries grapple with
debt pressures. In mid-April 2020, the IMF tapped its Catastrophe Containment and Relief Trust debt pressures. In mid-April 2020, the IMF tapped its Catastrophe Containment and Relief Trust
(CRRT), funded by donor countries, to provide grants to cover the debt payments of 25 poor and (CRRT), funded by donor countries, to provide grants to cover the debt payments of 25 poor and

~~418~~ 427 “Covid-19 Worsens Debt Crisis “Covid-19 Worsens Debt Crisis in Poor Countries,” Jubileein Poor Countries,” Jubilee Debt Campaign, March 22, 2020.Debt Campaign, March 22, 2020.
~~419 Trieu~~ 428 T rieu Pham, “EM Sovereign Debt Issuance: Pham, “EM Sovereign Debt Issuance: Encouraging SignsEncouraging Signs but Not Yet Back to Businessbut Not Yet Back to Business as Usual,”as Usual,” ING, May , May
26, 2020. 26, 2020.
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vulnerable countries to the IMF for six months. The IMF hopes that additional donor vulnerable countries to the IMF for six months. The IMF hopes that additional donor
contributions contributions ~~will allow~~wil al ow this debt service relief to be extended for two years. this debt service relief to be extended for two years. ~~Additionally~~Additional y, the G-, the G-
20 finance ministers agreed to suspend debt service payments for the world’s poorest countries 20 finance ministers agreed to suspend debt service payments for the world’s poorest countries
through the end of 2020. The Institute for International Finance (IIF), which represents 450 through the end of 2020. The Institute for International Finance (IIF), which represents 450
banks, hedge funds, and other global financial funds, also announced that private creditors banks, hedge funds, and other global financial funds, also announced that private creditors ~~will~~
wil join the debt relief effort on a voluntary basis. This debt join the debt relief effort on a voluntary basis. This debt ~~standstill will~~ standstil wil free up more than $20 free up more than $20
~~billion~~ bil ion for these countries to spend on improving their health systems and fighting the for these countries to spend on improving their health systems and fighting the
pandemic.pandemic.~~420~~429 Private sector commitments were critical for official creditors, so that developing Private sector commitments were critical for official creditors, so that developing
countries could redirect funds to improving health systems rather than repaying private creditors. countries could redirect funds to improving health systems rather than repaying private creditors.
However, the debt However, the debt ~~standstill~~ standstil is complicated. There is debate among creditor governments about is complicated. There is debate among creditor governments about
what debts should be included in the what debts should be included in the ~~standstill~~standstil , and how it can be enforced. On May 1, the IIF in a , and how it can be enforced. On May 1, the IIF in a
letter laid out some of the obstacles facing private sector participation in the debt letter laid out some of the obstacles facing private sector participation in the debt ~~still~~stil , including , including
reliance on “voluntary” participation, each participating creditor reliance on “voluntary” participation, each participating creditor ~~will~~ wil need to make its own need to make its own
assessments, the assessments, the ~~standstill~~ standstil could require a lengthy contract-by-contract approach, and the could require a lengthy contract-by-contract approach, and the
participating borrowing countries may face risks, such as rating downgrades and inability to participating borrowing countries may face risks, such as rating downgrades and inability to
borrow from financial markets (often referred to as “loss of market access”). Some economists borrow from financial markets (often referred to as “loss of market access”). Some economists
have characterized the letter as a list of reasons private creditors may cite as justification for their have characterized the letter as a list of reasons private creditors may cite as justification for their
refusal to participate in the debt refusal to participate in the debt ~~standstill.421~~standstil .430 Reportedly, some African countries are opting to Reportedly, some African countries are opting to
negotiate debt relief negotiate debt relief ~~individually~~ individual y with China and other creditor nations because of concerns they with China and other creditor nations because of concerns they
~~will~~ wil be blocked from financial markets if they participate in the G-20 debt be blocked from financial markets if they participate in the G-20 debt ~~standstill.422~~standstil .431
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”).~~423~~432 School closures have affected 1.5 School closures have affected 1.5 ~~billion~~bil ion children worldwide, children worldwide, ~~challenging~~chal enging parental leave parental leave
policies.policies.~~424~~433 Other countries have limited the size of public gatherings. Other countries have limited 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.~~425~~

~~420~~434 429 Davide Barbuscia, Davide Barbuscia, Marwa Rashad,Marwa Rashad, and Andrea Shalal,and Andrea Shalal, “G20 Countries Agree Debt Freeze for World’s Poorest “G20 Countries Agree Debt Freeze for World’s Poorest
Countries,” Countries,” Reuters, April 15, 2020 , April 15, 2020
~~421~~430 Patrick Bolton, Lee Buchheit, Pierre-Olivier Gourinchas, et. al, “Sovereign Debt Standstills: Patrick Bolton, Lee Buchheit, Pierre-Olivier Gourinchas, et. al, “Sovereign Debt Standstills: An Update” An Update” VoxEU, ,
May 28, 2020. May 28, 2020.
~~422~~431 Jevans Nyabiage, “All Eyes on China as Africa Spurns Jevans Nyabiage, “All Eyes on China as Africa Spurns G20 Debt Relief Plan,” G20 Debt Relief Plan,” South China Morning Post, May 26, , May 26,
2020. 2020.
~~423~~432 Rosenberg, Rosenberg, Alyssa, “Covid-19 Shut Down Mona Lisa and James Bond. We Can’t Let it Isolate Us,” Alyssa, “Covid-19 Shut Down Mona Lisa and James Bond. We Can’t Let it Isolate Us,” Washington
Post, March 4, 2020. https://www.washingtonpost.com/opinions/2020/03/04/Covid-19-shut-down-mona-lisa-james- March 4, 2020. https://www.washingtonpost.com/opinions/2020/03/04/Covid-19-shut-down-mona-lisa-james-
bond-we-cantbond-we-cant -let-it-isolate-us/. -let-it-isolate-us/.
~~424 Taylor~~433 T aylor, Adam, , Adam, ~~Teo~~T eo Armus, Rick Noak, “Covid-19 Armus, Rick Noak, “Covid-19 ~~Turmoil~~T urmoil Widens as U.S. Widens as U.S. Death Death ~~Toll~~T oll Mounts; Xi Cancels Japan Mounts; Xi Cancels Japan
~~Trip~~T rip,” ,” Washington Post, March 5, 2020; Strauss, Valerie,, March 5, 2020; Strauss, Valerie, “ “1.5 Billion Children Around Globe1.5 Billion Children Around Globe Affected by School Affected by School
Closure.Closure. What Countries Are Doing to Keep KidsWhat Countries Are Doing to Keep Kids Learning During Pandemic,” Learning During Pandemic,” Washington Post, March 27, 2020. , March 27, 2020.
https://www.washingtonpost.com/education/2020/03/26/nearly-14-billion-children-around-globe-are-out-school-heres-https://www.washingtonpost.com/education/2020/03/26/nearly-14-billion-children-around-globe-are-out-school-heres-
whatwhat -countries-are-doing-keep-kids-learning-during-pandemic/. -countries-are-doing-keep-kids-learning-during-pandemic/.
~~425~~434 Hill, Andrew Hill, Andrew and Emma Jacobs,and Emma Jacobs, “Covid-19 May Create Lasting Workplace Change,” “Covid-19 May Create Lasting Workplace Change,” Financial Times, February 27, , February 27,
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Microsoft and Amazon Microsoft and Amazon ~~initially instructed all~~ initial y instructed al of their Seattle-based employees to work from of their Seattle-based employees to work from
home until the end of March 2020, but Microsoft indicated in October it would home until the end of March 2020, but Microsoft indicated in October it would ~~allow~~al ow a large a large
share of its employees to work from home permanently.share of its employees to work from home permanently.~~426~~435
The drop in business and tourist travel caused a sharp drop in scheduled airline flights by as much The drop in business and tourist travel caused a sharp drop in scheduled airline flights by as much
as 10%; airlines estimated they lost $113 as 10%; airlines estimated they lost $113 ~~billion~~ bil ion in 2020 (an estimate that could prove optimistic in 2020 (an estimate that could prove optimistic
given the Trump Administration’s announced restrictions on flights from Europe to the United 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),States and the growing list of countries that are similarly restricting flights),~~427~~436 while airports in while airports in
Europe estimated they lost $4.3 Europe estimated they lost $4.3 ~~billion~~ bil ion in revenue due to fewer flights.in revenue due to fewer flights.~~428~~437 Industry experts Industry experts
estimated that many airlinesestimated that many airlines could face bankruptcy in 2020 under current conditions as a result of could face bankruptcy in 2020 under current conditions as a result of
travel restrictions imposed by a growing number of countries.travel restrictions imposed by a growing number of countries.~~429~~438 The loss of Chinese tourists was The loss of Chinese tourists was
another economic blow to countries in Asia and elsewhere that benefitted from the growing another economic blow to countries in Asia and elsewhere that benefitted from the growing
market for Chinese tourists and the stimulus such tourism provided. market for Chinese tourists and the stimulus such tourism provided.
The decline in industrial activity reduced demand for energy products such as crude oil, causing The decline in industrial activity reduced demand for energy products such as crude oil, causing
prices to drop sharply, which negatively affects energy producers, renewable energy producers, prices to drop sharply, which negatively affects energy producers, renewable energy producers,
and electric vehicle manufacturers, but and electric vehicle manufacturers, but ~~generally~~general y is positive for consumers and businesses. Saudi is positive for consumers and businesses. Saudi
Arabia pushed other OPEC (Organization of the Petroleum Exporting Countries) members Arabia pushed other OPEC (Organization of the Petroleum Exporting Countries) members
collectively to reduce output by 1.5 collectively to reduce output by 1.5 ~~million~~mil ion barrels a day to raise market prices. U.S. shale oil barrels a day to raise market prices. U.S. shale oil
producers, who are not represented by OPEC, support the move to raise prices.producers, who are not represented by OPEC, support the move to raise prices.~~430 An~~
~~unwillingness~~439 An unwil ingness by Russia to agree to output reductions added to other downward pressures on oil by Russia to agree to output reductions added to other downward pressures on oil
prices and caused Saudi Arabia to engage in a price war with Russia that drove oil prices below prices and caused Saudi Arabia to engage in a price war with Russia that drove oil prices below
$25 per barrel at times, half the estimated $50 per barrel break-even point for most oil producing $25 per barrel at times, half the estimated $50 per barrel break-even point for most oil producing
countries.countries.~~431~~440 Rising oil supplies and Rising oil supplies and ~~falling~~ fal ing demand combined to create an estimated surplus of 25 demand combined to create an estimated surplus of 25
~~million~~ mil ion barrels a day and overwhelmed storage capacity at times and barrels a day and overwhelmed storage capacity at times and ~~challenged~~chal enged the viability the viability of of
U.S. shale oil production.U.S. shale oil production.~~432~~441 In 2019, low energy prices combined with high debt levels reportedly In 2019, low energy prices combined with high debt levels reportedly
caused U.S. energy producers to reduce their spending on capital equipment, reduced their profits caused U.S. energy producers to reduce their spending on capital equipment, reduced their profits
and, in some cases, led to bankruptcies.and, in some cases, led to bankruptcies.~~433~~442 Reportedly, in late 2019 and early 2020, bond and Reportedly, in late 2019 and early 2020, bond and

2020. https://www.ft.com/content/5801a710-597c-11ea-abe5-8e03987b7b20. 2020. https://www.ft.com/content/5801a710-597c-11ea-abe5-8e03987b7b20.
~~426~~435 Armus, Armus, ~~Teo, “~~T eo, “ Live Updates: Covid-19 Live Updates: Covid-19 ~~Turmoil~~T urmoil Widens as U.S. Widens as U.S. Death Death ~~Toll~~T oll Mounts; Xi Cancels Mounts; Xi Cancels Japan Japan ~~Trip~~T rip,”,”
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/.
~~427 Taylor~~436 T aylor, Adam, “Airlines Could, Adam, “Airlines Could ~~Suffer~~ Suffer up to $113 Billion in Lost Revenue Dueup to $113 Billion in Lost Revenue Due to Covid-19 Crisis,to Covid-19 Crisis, ~~IATA~~ IAT A Says,” Says,”
Washington Post, March 5, 2020. https://www.washingtonpost.com/world/2020/03/05/Covid-19-live-updates/. , March 5, 2020. https://www.washingtonpost.com/world/2020/03/05/Covid-19-live-updates/.
~~428~~437 “Airlines Slash “Airlines Slash Flights to Cut Costs as Covid-19 Hits Flights to Cut Costs as Covid-19 Hits ~~Travel~~T ravel Demand,” Demand,” Financial Times. https://www.ft.com/. https://www.ft.com/
content/c28b5790-62c6-11ea-a6cd-df28cc3c6a68. content/c28b5790-62c6-11ea-a6cd-df28cc3c6a68.
~~429~~438 Smyth, Jamie Smyth, Andrew Smyth, Jamie Smyth, Andrew Edgecliffe-Johnson, Peggy Hollinger, Myles McCormick, David Keohane, and Edgecliffe-Johnson, Peggy Hollinger, Myles McCormick, David Keohane, and
Richard Milne, “Richard Milne, “ Most Airlines Face Bankruptcy by End of May, Industry Body Warns,Most Airlines Face Bankruptcy by End of May, Industry Body Warns, ” ” Financial ~~Times~~Tim es, March 16, March 16,
2020. 2020.
~~430~~439 Brower, Derek, “ Brower, Derek, “ Cash-Strapped USCash-Strapped US Shale Producers Pray for OPEC Aid,”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.
~~431~~440 Strauss, Strauss, Delphine, “Why Delphine, “Why ~~There~~T here Are No Winners from the Oil Price Plunge Are No Winners from the Oil Price Plunge ~~This Time~~T his T ime,” ,” Financial Times, March 10, March 10,
2020. https://www.ft.com/content/da2b0700-622c-11ea-b3f3-fe4680ea68b5; Mufson, Steve and Will Englund,2020. https://www.ft.com/content/da2b0700-622c-11ea-b3f3-fe4680ea68b5; Mufson, Steve and Will Englund, “ “Oil Oil
Price War Price War ~~Threatens~~T hreatens Widespread Collateral Damage,” Widespread Collateral Damage,” Washington Post, March 10, 2020. , March 10, 2020.
https://www.washingtonpost.com/climate-environment/oil-price-war-threatens-widespread-collateral-damage/2020/03/https://www.washingtonpost.com/climate-environment/oil-price-war-threatens-widespread-collateral-damage/2020/03/
09/3e42c9e2-6207-11ea-acca-80c22bbee96f_story.html. 09/3e42c9e2-6207-11ea-acca-80c22bbee96f_story.html.
~~432~~441 Sheppard, David and Derek Brower, “U.S. Crude Sheppard, David and Derek Brower, “U.S. Crude Oil Price Drops BelowOil Price Drops Below $20,” $20,” Financial Times, March 29, 2020. , March 29, 2020.
https://www.ft.com/content/bc938195-82d3-43eb-b031-740028451382. https://www.ft.com/content/bc938195-82d3-43eb-b031-740028451382.
~~433 “Texas~~442 “T exas Oil Groups: Oil Groups: Panhandling Ahead,” Panhandling Ahead,” The Financial Times, January 20, 2020. , January 20, 2020.
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equity investors, as equity investors, as ~~well~~ wel as banks, reduced their lending to shale oil producers and other energy as banks, reduced their lending to shale oil producers and other energy
producers that producers that ~~typically~~typical y use oil and gas reserves as collateral. use oil and gas reserves as collateral.~~434~~443
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~~ cel phones, toys, and medical equipment.phones, toys, and medical equipment.~~435~~444 Factory output in China, the United States, Japan, Factory output in China, the United States, Japan,
and South Korea and South Korea ~~all~~ al declined in the first months of 2020.declined in the first months of 2020.~~436~~445 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.~~437~~446 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.~~438~~447 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.~~439~~448
Conclusions
The quickly evolving nature of the COVID-19 crisis The quickly evolving nature of the COVID-19 crisis ~~creates~~continues to raise a number of issues that a number of issues that make it make it
difficult to estimate the full cost to global economic activity. These issues include, but are difficult to estimate the full cost to global economic activity. These issues include, but are not not
limited to the following: limited to the following:
 How long  How long ~~will~~ wil the crisis last? the crisis last?
 How many workers  How many workers ~~will~~ wil be affected both temporarily and permanently? be affected both temporarily and permanently?
 How many countries  How many countries ~~will~~ wil be infected and how much economic activity be infected and how much economic activity ~~will~~ wil be be
reduced? reduced?
 When  When ~~will~~ wil the economic effects peak? the economic effects peak?
 How much economic activity  How much economic activity ~~will be lost~~ wil be lost in the short run and over the long term as a result of the viral outbreak? as a result of the viral outbreak?
 What  What ~~are~~have been the most effective monetary and fiscal policies at the national the most effective monetary and fiscal policies at the national ~~and~~
and global level to address the crisis? global level to address the crisis?
  ~~What~~Wil the crisis have temporary temporary ~~and~~or permanent effects permanent effects ~~will the crisis have~~ on how businesses on how businesses
organize organize their work forces? 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(with plant closures, travel restrictions, and so forth). How are government and policymakers weighing the tradeoffs 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?~~

~~434 Ibid.~~
~~435~~of the virus? 443 Ibid. 444 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~~Tim es, March3, 2020. https://www.ft.com/content/72742872-5c31-11ea-b0ab-339c2307bcd4. March3, 2020. https://www.ft.com/content/72742872-5c31-11ea-b0ab-339c2307bcd4.
~~436~~445 Newmyer, Newmyer, ~~Tory, “~~T ory, “ The Finance 202: Stocks Stage Major Comeback, butThe Finance 202: Stocks Stage Major Comeback, but Manufacturing Report Points to Continued Manufacturing Report Points to Continued
Covid-19 Pain,” Covid-19 Pain,” Washington Post, March 3, 2020. https://www.washingtonpost.com/news/powerpost/paloma/the-, March 3, 2020. https://www.washingtonpost.com/news/powerpost/paloma/the-
finance-202/2020/03/03/the-finance-202-stocks-stage-major-comeback-but-manufacturing-reportfinance-202/2020/03/03/the-finance-202-stocks-stage-major-comeback-but-manufacturing-report -points-to-continued--points-to-continued-
Covid-19-pain/5e5d84a6602ff10d49ac081f/?itid=hp_hp-cards_hp-card-politics%3Ahomepage%2Fcard-ans. Covid-19-pain/5e5d84a6602ff10d49ac081f/?itid=hp_hp-cards_hp-card-politics%3Ahomepage%2Fcard-ans.
~~437~~446 Lynch, David J., “ Lynch, David J., “ Economic Fallout from China’s Covid-19 Mounts AroundEconomic Fallout from China’s Covid-19 Mounts Around the World,” the World,” Washington Post,
February 13, 2020. https://www.washingtonpost.com/business/economy/economic-falloutFebruary 13, 2020. https://www.washingtonpost.com/business/economy/economic-fallout -from-chinas-Covid-19--from-chinas-Covid-19-
mounts-across-the-globe/2020/02/13/7bb69a12-4e8c-11ea-9b5c-eac5b16dafaa_story.html?itid=lk_inline_manual_12 mounts-across-the-globe/2020/02/13/7bb69a12-4e8c-11ea-9b5c-eac5b16dafaa_story.html?itid=lk_inline_manual_12
~~438~~447 Ibid. Ibid.
~~439~~448 Ibid. Ibid.
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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 reverseExpanded reverse repo operations,repo operations, adding $1.5 adding $1.5 ~~trillion~~ tril ion of liquidity to the of liquidity to the
banking system. banking system.
March 15: Cut the target range for the federal funds rate by a Cut the target range for the federal funds rate by a ~~full~~ ful percentage point 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 least $500 ~~billion~~bil ion in Treasury securities in Treasury securities and $200 and $200 ~~billion~~ bil ion in mortgage-backed in mortgage-backed
securities. securities.
March 16: Increased reverse Increased reverse repo operations by another $500 repo operations by another $500 ~~billion~~bil ion. .
March 17: U.S. Treasury Secretary Mnuchin approved the Federal U.S. Treasury Secretary Mnuchin approved the Federal Reserve’sReserve’s creation creation
of a “Commercialof a “Commercial Paper Funding Facility,"Paper Funding Facility," (CPFF) through March 17, 2021, (CPFF) through March 17, 2021, ~~which will~~
~~allows~~wh ich wil al ows the Fed to create a corporation which can purchase commercial the Fed to create a corporation which can purchase commercial paper, short-paper, short-
term,term, unsecured loans made by businessesunsecured loans made by businesses for everyday expenses and authorized up for everyday expenses and authorized up
to $10 to $10 ~~billion~~bil ion from the Treasury to help cover loan losses from the Treasury to help cover loan losses incurred under this incurred under this
program.program.
March 17: Relaunched the Primary Relaunched the Primary ~~Dealer~~ Dealer Credit Facility (PDCF) for at least six Credit Facility (PDCF) for at least six
months. Starting March 20, the PDCF months. Starting March 20, the PDCF ~~will~~ wil offer short-termoffer short-term loans to banks secured by loans to banks secured by
~~collateral~~ col ateral such as municipal bonds or investment-grade corporate debt. such as municipal bonds or investment-grade corporate debt.
March 18: Launched the Money Market Mutual Fund Liquidity Facility (MMLF) Launched the Money Market Mutual Fund Liquidity Facility (MMLF)
through the end of September,through the end of September, a new program to lend money to banks so they can a new program to lend money to banks so they can
purchase assets from money marketpurchase assets from money market funds. Treasury is offering up to $10 funds. Treasury is offering up to $10 ~~billion~~bil ion to to
cover loan lossescover loan losses the Fed incurs fromthe Fed incurs from the program. the program.
March 23: Announced a series Announced a series of measuresof measures designed to stabilize markets,designed to stabilize markets, enhance enhance
liquidity and stimulate growth. The measuresliquidity and stimulate growth. The measures included the included the ~~roll~~ rol out of 2 new facilities, out of 2 new facilities,
the Primarythe Primary Market Corporate Credit Facility (PMCCF) for new bond and loan Market Corporate Credit Facility (PMCCF) for new bond and loan
issuance and the Secondary Market Corporate Credit Facility (SMCCF) to provide issuance and the Secondary Market Corporate Credit Facility (SMCCF) to provide
liquidity for outstanding corporate bonds. The FOMC removedliquidity for outstanding corporate bonds. The FOMC removed its caps on planned its caps on planned
QE purchases and QE purchases and ~~will~~ wil now purchase Treasuriesnow purchase Treasuries and agency mortgage-backed and agency mortgage-backed
securitiessecurities “in the amounts needed to support smooth market“in the amounts needed to support smooth market functioning and functioning and
effective transmissioneffective transmission of monetary policy to broader financial conditions and the of monetary policy to broader financial conditions and the
economy.” economy.”

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

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

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

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

Government of Australia
March 12: Announced a AU$17.6 Announced a AU$17.6 ~~billion ($11.4 billion~~bil ion ($11.4 bil ion) stimulus package that ) stimulus package that
includes support for business investment, cash flow assistance for includes support for business investment, cash flow assistance for ~~small~~ smal and medium and medium
sized business and employees,sized business and employees, and household stimulusand household stimulus payments. payments.
March 16: The Australian Securities The Australian Securities and Investments Commissionand Investments Commission ordered large ordered large
equity market participants to reduce their number of executed trades by 25% from equity market participants to reduce their number of executed trades by 25% from
the levelsthe levels executed on March 13, 2020, until further notice. executed on March 13, 2020, until further notice.
March 19: Announced that the Australian Office of Financial Management (AOFM) Announced that the Australian Office of Financial Management (AOFM)
~~will~~ wil be provided with an investment capacity of $15 be provided with an investment capacity of $15 ~~billion~~bil ion to enable to enable ~~smaller~~ smal er lenders lenders
to continue supporting Australian consumersto continue supporting Australian consumers ~~and small~~ and smal businesses.businesses. (AOFM (AOFM ~~will~~ wil be be
able to purchase residentialable to purchase residential mortgage backed securitiesmortgage backed securities and invest in a range of other and invest in a range of other
asset backed securitiesasset backed securities and warehouse facilitiesand warehouse facilities over the next 12 months.) over the next 12 months.)
March 22: Announced an additional AU$66.4 Announced an additional AU$66.4 ~~billion~~bil ion ($38.5 ($38.5 ~~billion~~bil ion) fiscal package, ) fiscal package,
which extends income support measureswhich extends income support measures for existing welfarefor existing welfare and newly unemployed and newly unemployed
workers,workers, and boosted previously announced measuresand boosted previously announced measures for businesses such as cash for businesses such as cash
flow and wage subsidies.flow and wage subsidies. The government is also expected to give local businesses The government is also expected to give local businesses
AU$100,000 if the company has a turnover of less than AU$50 AU$100,000 if the company has a turnover of less than AU$50 ~~million~~ mil ion each year and each year and
underwrite 50% of up AU$40 bil ion in loans offered by local lendersunderwrite 50% of up AU$40 bil ion in loans offered by local lenders ~~to small~~ to smal and and
mediummedium sized companies. sized companies.
March 30: Unveiled an economic package of AU$130 Unveiled an economic package of AU$130 ~~billion~~bil ion ($79.85 ($79.85 ~~billion~~bil ion) to ) to
subsidize the wages of an estimated 6 subsidize the wages of an estimated 6 ~~million~~ mil ion people, marking a third tranche of people, marking a third tranche of
stimulus designed to limitstimulus designed to limit ~~the fallout~~ the fal out of the COVID-19 pandemic on the country’s of the COVID-19 pandemic on the country’s
economy.economy. The “job keeper” The “job keeper” ~~allowance,~~ al owance, which would bring the country’s COVID-19-which would bring the country’s COVID-19-
related stimulus so far to A$320 related stimulus so far to A$320 ~~billion~~bil ion (about 15% of Australia’s (about 15% of Australia’s ~~gross~~ gross domestic domestic
product), product), ~~will~~ wil provide eligibleprovide eligible companies with AU$1,500 every fortnight for six companies with AU$1,500 every fortnight for six
months for each employee.months for each employee. Any company that lost 30% of its revenue can apply for Any company that lost 30% of its revenue can apply for
the funds. the funds.
Austria
Government of Austria
March 14: Set up an initial 4 Set up an initial 4 ~~billion~~ bil ion euro ($4.4 euro ($4.4 ~~billion~~bil ion) “corona crisis) “corona crisis fund” to cover, fund” to cover,
among other things, benefits for affected workers,among other things, benefits for affected workers, ~~as well~~ as wel as bridge loans and credit as bridge loans and credit
guarantees to shore up businesses’guarantees to shore up businesses’ liquidity. liquidity.
March 18: Announced that it Announced that it ~~will~~ wil spend up to 38 spend up to 38 ~~billion~~bil ion euros ($42 euros ($42 ~~billion~~bil ion) to secure ) to secure
jobs and keep companies afloat, and it jobs and keep companies afloat, and it ~~will~~ wil provide another 9 provide another 9 ~~billion~~ bil ion euros in euros in
guarantees and warranties,guarantees and warranties, ~~15 billion~~ 15 bil ion euros in emergencyeuros in emergency aid, and 10 aid, and 10 ~~billion~~ bil ion euros in euros in
tax deferrals. tax deferrals.
Bosnia and
March 17: The prime The prime ~~minister~~ minister met with the IMF Resident Representative in Bosnia met with the IMF Resident Representative in Bosnia
Herzegovina
to request assistance from the IMF. The IMF indicated that it may extend a 165 to request assistance from the IMF. The IMF indicated that it may extend a 165
~~million euros ($181 million~~mil ion euros ($181 mil ion) loan to Bosnia under a Rapid Financing Instrument (RFI) ) loan to Bosnia under a Rapid Financing Instrument (RFI)
to finance the increasing costs sustained by the country’s health systemto finance the increasing costs sustained by the country’s health system in combating in combating
COVID-19. COVID-19.
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 the economic blow of the COVID-19 pandemic. It also sold $830 ~~million~~ mil ion in two in two
rounds of spot foreign exchange intervention and announced a repurchase program rounds of spot foreign exchange intervention and announced a repurchase program
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for for ~~dollar~~dol ar-denominated sovereign-denominated sovereign bonds held by Brazilian banks, which bonds held by Brazilian banks, which ~~will~~ wil be carried be carried
out in conjunction with the Treasury. out in conjunction with the Treasury.
March 23: Announced that it planned to inject 1.2 Announced that it planned to inject 1.2 ~~trillion~~ tril ion reais ($233.81 reais ($233.81 ~~billion~~bil ion) into ) into
the country’s financial systemthe country’s financial system to counteract the effects of the COVID-19 outbreak, to counteract the effects of the COVID-19 outbreak,
with morewith more than half that amount comprising loans to banks. Under the program, than half that amount comprising loans to banks. Under the program,
lenderslenders ~~will~~ wil be able to package their loan portfolios into long-termbe able to package their loan portfolios into long-term deposits to be deposits to be
acquired by the central bank in a move aimed at freeing up 670 acquired by the central bank in a move aimed at freeing up 670 ~~billion~~bil ion reais reais for fresh for fresh
loans. It also (1) cut long-term reserveloans. It also (1) cut long-term reserve ~~requirements~~ requirements to 17% from 25%, freeing up 68 to 17% from 25%, freeing up 68
~~billion reais~~ bil ion reais currently in compulsorycurrently in compulsory deposits with the central bank to banks, (2) deposits with the central bank to banks, (2)
announced measuresannounced measures ~~allowing small~~ al owing smal and mid-sized lendersand mid-sized lenders to issue up to 2 to issue up to 2 ~~billion~~bil ion
reaisreais in special long-term bonds guaranteed by a privately held deposit insurance fund, in special long-term bonds guaranteed by a privately held deposit insurance fund,
limitedlimited to an amount equivalent to its shareholders’to an amount equivalent to its shareholders’ equity, and (3) equity, and (3) ~~will~~ wil extend loans 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 Announced a fiscal stimulus package of 147.1 ~~billion~~bil ion reais reais ($28.6 ($28.6 ~~billion~~bil ion) )
to mitigate the impact of the COVID-19 and boost the economy.to mitigate the impact of the COVID-19 and boost the economy. It does not contain It does not contain
new money,new money, but is a range of measuresbut is a range of measures that aim to protect the most vulnerable that aim to protect the most vulnerable
population through social assistance payments (83.4 population through social assistance payments (83.4 ~~billion~~ bil ion reais), support domestic reais), support domestic
companies and defer business taxes (59.4 companies and defer business taxes (59.4 ~~billion~~ bil ion reais), and increase investmentsreais), and increase investments in in
healthcare to combat the COVID-19 (4.5 healthcare to combat the COVID-19 (4.5 ~~billion~~ bil ion reais). The government also reais). The government also
announced a 3.1 announced a 3.1 ~~billion~~ bil ion reais boost to the “Bolsa Família”reais boost to the “Bolsa Família” assistance for someassistance for some of of
Brazil’sBrazil’s poorest families. poorest families.
March 16: The National Monetary Council (CMN) approved the measures The National Monetary Council (CMN) approved the measures that wil al ow~~that will~~
~~allow~~ banks to (1) increase banks to (1) increase loans and offer better terms to firms and households over loans and offer better terms to firms and households over
the next six months and (2) extend certain loan maturitiesthe next six months and (2) extend certain loan maturities for the next six months. It for the next six months. It
also loweredalso lowered capital requirementscapital requirements for banks. for banks.
April 1: Announced that it Announced that it ~~will~~ wil cut the IOF financial tax for 90 days. It cut the IOF financial tax for 90 days. It ~~will~~ wil be be
temporary and cost 7 temporary and cost 7 ~~billion~~bil ion reais. reais. ~~It will~~ It wil also extend the deadline for submitting the also extend the deadline for submitting the
2019 base year net income2019 base year net income report to June 30 from Aprilreport to June 30 from April 30 and 30 and ~~allow~~al ow companies to companies to
postpone payment of certain tax contributions for two months and reduce wages by postpone payment of certain tax contributions for two months and reduce wages by
up to 70% (or the minimumup to 70% (or the minimum wage) for three months, among other measures. wage) for three months, among other measures.
Bulgaria
Government of Bulgaria
March 30: Announced it Announced it ~~will~~ wil spend morespend more than 1 than 1 ~~billion~~bil ion levs ($566 levs ($566 ~~million)~~ mil ion) to pay to pay
part of workers’part of workers’ ~~salaries~~ salaries in companies whose operations have been hit by the in companies whose operations have been hit by the
COVID-19 crisis,COVID-19 crisis, part of part of an part of part of an ~~overall 4.5 billion-lev~~ overal 4.5 bil ion-lev package. package.
March 31: Announced plans to raise Announced plans to raise the ceiling on new debt it can raise to 10 the ceiling on new debt it can raise to 10 ~~billion~~bil ion
levs due to the COVID-19 pandemic. levs due to the COVID-19 pandemic.
Cambodia
Government of Cambodia
March 5: Announced that it would Announced that it would ~~allocate $30 million~~ al ocate $30 mil ion to finance Cambodia’s to finance Cambodia’s
COVID-19 screening and monitoring efforts. COVID-19 screening and monitoring efforts.
March 10: ~~Allocated~~Al ocated between $800 between $800 ~~million to $2 billion~~ mil ion to $2 bil ion to address the economic to address the economic
impacts of the novel COVID-19 outbreak.impacts of the novel COVID-19 outbreak.
Canada
Bank of Canada
March 4: Lowered Lowered its target for the overnight rate by 50 basis points to 1.25% its target for the overnight rate by 50 basis points to 1.25%
(setting the bank rate to 1.5% and the deposit rate to 1%). (setting the bank rate to 1.5% and the deposit rate to 1%).
March 12: Announced that it Announced that it ~~will~~ wil broaden the scope of the current Governmentbroaden the scope of the current Government of of
Canada bond buyback program and temporarilyCanada bond buyback program and temporarily add new Term Repo operations. add new Term Repo operations.
March 13: Lowered Lowered its benchmark overnight rate to 1.25% from 1.75% in response its benchmark overnight rate to 1.25% from 1.75% in response
to the epidemic. to the epidemic.
March 13: Announced its intention to launch the Bankers’Announced its intention to launch the Bankers’ Acceptance Purchase Acceptance Purchase
Facility (BAPF), starting the week of March 23, 2020, in an effort to support the Facility (BAPF), starting the week of March 23, 2020, in an effort to support the
continuous functioning of financial markets; it continuous functioning of financial markets; it ~~will~~ wil conduct secondary market conduct secondary market
purchases of one-month Bankers’purchases of one-month Bankers’ Acceptances issued and guaranteed by any Acceptances issued and guaranteed by any
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Canadian bank and of sufficiently high quality. BAPF operations Canadian bank and of sufficiently high quality. BAPF operations ~~will~~ wil be conducted be conducted
weeklyweekly with the purchase amount and reservewith the purchase amount and reserve rate being adjusted to reflect market rate being adjusted to reflect market
conditions. (For the first operation,conditions. (For the first operation, the Bank of Canada the Bank of Canada ~~will~~ wil purchase up to $10 purchase up to $10
~~billion~~bil ion of one-month Bankers’ of one-month Bankers’ Acceptances with a reserveAcceptances with a reserve rate of the overnight index rate of the overnight index
swap rate plus 20 basis points.) swap rate plus 20 basis points.)
March 16: Announced that it Announced that it ~~will~~ wil broaden eligiblebroaden eligible ~~collateral~~ col ateral for its term repo facility for its term repo facility
and increaseand increase purchases of mortgage-backed securitiespurchases of mortgage-backed securities (Canada Mortgage Bonds). (Canada Mortgage Bonds).
March 27: Cut its overnight interestCut its overnight interest rate by 50 basis points to 0.25%, its lowestrate by 50 basis points to 0.25%, its lowest level level
since June 2010 and the third cut in March, to support an economy hit hard by the since June 2010 and the third cut in March, to support an economy hit hard by the
outbreak of COVID-19. It also announced that it would begin purchases of CA$5 outbreak of COVID-19. It also announced that it would begin purchases of CA$5
~~billion~~bil ion per week of Government of Canada securities per week of Government of Canada securities in the secondary market. in the secondary market.

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

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

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

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

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

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

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

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

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

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

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

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

Government of Iran
March 12: Asked the United Nations to Asked the United Nations to ~~allocate~~al ocate resources resources to help it tackleto help it tackle COVID-COVID-
19 and facilitate imports19 and facilitate imports as a way of boosting the country’sas a way of boosting the country’s sanctions-hit healthcare sanctions-hit healthcare
system. system.
March 15: Announced a seriesAnnounced a series of banking, welfare and tax reliefof banking, welfare and tax relief ~~measures~~ measures to to
support businesses and familiessupport businesses and families as the COVID-19 outbreak puts severeas the COVID-19 outbreak puts severe strain on the strain on the
economy.economy. Employees Employees ~~will~~ wil be able to defer health insurance, tax and utility be able to defer health insurance, tax and utility ~~bill~~
bil payments for the next three months, while the 3 payments for the next three months, while the 3 ~~million~~ mil ion poorest Iranians poorest Iranians ~~will~~ wil receive receive
an additional cash subsidy starting March 17, 2020. an additional cash subsidy starting March 17, 2020.
March 23: The European Union’s High Representative The European Union’s High Representative of the Union for Foreign of the Union for Foreign
Affairs and Security Policy (Josep Affairs and Security Policy (Josep ~~Borrell)~~ Borrel ) announced that the EU would provide 20 announced that the EU would provide 20
~~million euros~~ mil ion euros in humanitarian aid to Iran to help in humanitarian aid to Iran to help ~~alleviate~~ al eviate the COVID-19 and support the COVID-19 and support
Iran’s request for IMF financial help. Iran’s request for IMF financial help.
March 26: President Hassan Rouhani wrote to Supreme President Hassan Rouhani wrote to Supreme ~~Leader Ayatollah~~ Leader Ayatol ah Ali Ali
Khamenei requesting permissionKhamenei requesting permission to withdraw $1 to withdraw $1 ~~billion from~~ bil ion from the country’s sovereign the country’s sovereign
wealth fund (the National Developmentwealth fund (the National Development Fund) to support the healthcare system, Fund) to support the healthcare system,
which is overstretched by the COVID-19 outbreak. which is overstretched by the COVID-19 outbreak.
March 28: Announced that it would Announced that it would ~~allocate~~al ocate 20% of its annual state budget to 20% of its annual state budget to
fighting the pandemic in the country. The budget fighting the pandemic in the country. The budget ~~allocation~~al ocation, amounting to about 1,000 , amounting to about 1,000
~~trillion~~ tril ion rials,rials, would include grants and low-interestwould include grants and low-interest loans to those affected by COVID-loans to those affected by COVID-
19, Rouhani said. While19, Rouhani said. While ~~the allocated~~ the al ocated amount is worth some amount is worth some ~~$6.3 billion~~ $6.3 bil ion at the rial’s at the rial’s
free marketfree market exchange rate of about 160,000 rials per exchange rate of about 160,000 rials per ~~dollar,~~ dol ar, the government may the government may
decide to decide to ~~allocate some~~ al ocate some of the funds at the official rate of 42,000 (which is used to of the funds at the official rate of 42,000 (which is used to
subsidize food and medicine). subsidize food and medicine).
Ireland
March 9: The government announced that it The government announced that it ~~will~~ wil set aside 3 set aside 3 ~~billion~~ bil ion euros ($3.44 euros ($3.44
~~billion~~bil ion) to provide additional funding to the health service) to provide additional funding to the health service ~~(435 million euros), boost~~
~~workers’~~ (435 mil ion euros), b oost workers’ sick pay and benefits (2.4 sick pay and benefits (2.4 ~~billion~~bil ion euros), euros), and offer liquidity assistance to and offer liquidity assistance to
businessesbusinesses affected (200 affected (200 ~~million~~ mil ion euros). euros).
Israel
Bank of Israel
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March 18: Announced it would Announced it would ~~allocate~~al ocate up to $15 up to $15 ~~billion~~bil ion for swap transactions for swap transactions
between currenciesbetween currencies for domestic banks, part of a movefor domestic banks, part of a move aimed at shoring up the aimed at shoring up the
IsraeliIsraeli economy amid the COVID-19 pandemic. economy amid the COVID-19 pandemic.
April 6: Cut its benchmark interest rate to 0.1% from 0.25%, its first rate cut in five Cut its benchmark interest rate to 0.1% from 0.25%, its first rate cut in five
years, expanded its repo transactions so that the agreementsyears, expanded its repo transactions so that the agreements can include corporate can include corporate
bonds—in addition to government bonds—as security, and bonds—in addition to government bonds—as security, and ~~will~~ wil provide loans to provide loans to
banks for a termbanks for a term of three years (with a fixed interestof three years (with a fixed interest rate of 0.1%) with the goal of rate of 0.1%) with the goal of
increasing the supply of bank credit to increasing the supply of bank credit to ~~small~~ smal businesses.businesses. The size of the plan The size of the plan ~~will be 5~~
~~billion~~wil be 5 bil ion shekels. shekels.

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

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

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

Government of Kuwait
April 1: Announced measures Announced measures ~~aimed~~ aimed at shoring up its economy against the pandemic, at shoring up its economy against the pandemic,
including soft long-term loans from local banks to provide liquidity for including soft long-term loans from local banks to provide liquidity for ~~small~~ smal and and
medium-sizedmedium-sized ~~enterprises~~ enterprises and directing government agencies to pay obligations to the and directing government agencies to pay obligations to the
private sector as soon as possible. private sector as soon as possible.
Malaysia
Government of Malaysia
February 27: Announced the “Economic Stimulus Announced the “Economic Stimulus Package 2020” to mitigate the Package 2020” to mitigate the
economiceconomic impact of COVID-19, improveimpact of COVID-19, improve the cash flow of affected businesses, the cash flow of affected businesses,
stimulate private consumption, and accelerate domesticstimulate private consumption, and accelerate domestic investment activities.investment activities. It It
includes exempting accommodation servicesincludes exempting accommodation services from servicesfrom services tax, providing salestax, providing sales tax tax
exemptions,exemptions, and lifting duties on certain imports. and lifting duties on certain imports.
March 27: Announced a stimulusAnnounced a stimulus package worth 250 package worth 250 ~~billion~~bil ion ringgit ($58.28 ringgit ($58.28 ~~billion~~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 includes a 25 ~~billion~~bil ion ringgit direct fiscal injection by the government aimed at helping ringgit direct fiscal injection by the government aimed at helping
familiesfamilies and business owners; one-off payments and discounts on utilitiesand business owners; one-off payments and discounts on utilities for people for people
whose livelihoodswhose livelihoods have been affected; 1 have been affected; 1 ~~billion~~ bil ion ringgit for a food security fund; and a ringgit for a food security fund; and a
50 50 ~~billion~~ bil ion ringgit loan scheme for larger companies,ringgit loan scheme for larger companies, which which ~~will~~ wil offer guarantees of up offer guarantees of up
to 80% of the sum borrowed to shore up working capital in the corporate sector. to 80% of the sum borrowed to shore up working capital in the corporate sector.
Mauritius
March 10: The Bank of Mauritius cut its key repo rate by 50 basis points to 2.85% The Bank of Mauritius cut its key repo rate by 50 basis points to 2.85%
amid the COVID-19 outbreak, which is expected to have a significant impact on the amid the COVID-19 outbreak, which is expected to have a significant impact on the
domesticdomestic economy. economy.
Mexico
Banxico (Bank of Mexico)
February 13: Cut its key rate by 25 basis points to 7.0%. Cut its key rate by 25 basis points to 7.0%.
March 19: LoweredLowered its benchmark interest rate by 50 basis points to 6.50% in an its benchmark interest rate by 50 basis points to 6.50% in an
out-of-cycle cut in a bid to support the country’s financial markets,out-of-cycle cut in a bid to support the country’s financial markets, reduced the rates reduced the rates
on its additional ordinary liquidity facility, and cut by 50 on its additional ordinary liquidity facility, and cut by 50 ~~billion~~ bil ion pesos ($2.06 pesos ($2.06 ~~billion~~bil ion) )
the monetary regulation deposit that private banks must observe.the monetary regulation deposit that private banks must observe.
Moldova
National Bank of Moldova
March 4: Cut its main interest Cut its main interest rate by 100 basis points to 4.50%, citing the domestic rate by 100 basis points to 4.50%, citing the domestic
disinflationary trend and global economic concerns related to the COVID-19 disinflationary trend and global economic concerns related to the COVID-19
outbreak. outbreak.
March 20: Cut its main interest rate for the second timeCut its main interest rate for the second time in March to 3.25% from in March to 3.25% from
4.50% in order4.50% in order to support banking system amid marketsto support banking system amid markets ~~volatility~~ volatility due to the COVID-due to the COVID-
19 spread. 19 spread.
Mongolia
March 11: The Central Bank of Mongolia cut its policy rate 100 basis points to The Central Bank of Mongolia cut its policy rate 100 basis points to
10.0% in response10.0% in response to increased uncertainties in connection with the spread of to increased uncertainties in connection with the spread of
COVID-19. It also loweredCOVID-19. It also lowered the reservethe reserve ~~requirement~~ requirement on banks. on banks.
Morocco
March 15: Morocco’s Morocco’s King Mohammed VI ordered the creation of a 10 King Mohammed VI ordered the creation of a 10 ~~billion~~bil ion--
dirham ($1 dirham ($1 ~~billion~~bil ion) fund to upgrade health infrastructure, help vulnerable economic ) fund to upgrade health infrastructure, help vulnerable economic
sectorssectors such as tourism,such as tourism, maintain jobs, and mitigatemaintain jobs, and mitigate the socialthe social ~~repercussions~~ repercussions of the of the
outbreak. outbreak.
March 17: Bank Al-Maghrib (Central Bank of the Kingdom of Morocco) Bank Al-Maghrib (Central Bank of the Kingdom of Morocco) cut its cut its
benchmark interest rate by 25 basis points to 2% in order to help shore up economic benchmark interest rate by 25 basis points to 2% in order to help shore up economic
activity activity ~~following~~fol owing a drought and the outbreak of COVID-19. a drought and the outbreak of COVID-19.
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Netherlands
Government of the Netherlands
March 12: Announced that it would expand loan guarantees for Announced that it would expand loan guarantees for ~~small~~ smal and medium and medium
sized enterprises,sized enterprises, from 50% to 75%. from 50% to 75%.
March 12: The Tax Authority The Tax Authority ~~will allow~~wil al ow companies companies affected by COVID-19 to defer affected by COVID-19 to defer
income,income, corporate, turnover, and wage taxes for the timecorporate, turnover, and wage taxes for the time being. being.
March 17: Announced measures Announced measures to support companies,to support companies, ranging from tax ranging from tax
exemptions to having up to 90% of wages lost for workexemptions to having up to 90% of wages lost for work hour reductions paid by the hour reductions paid by the
government. government.
New Zealand
Reserve Bank of New Zealand
March 16: Cut the official cash rate by 75 basis points to a recordCut the official cash rate by 75 basis points to a record low of 0.25%, and low of 0.25%, and
pledged to keep it at this level for at least 12 months. pledged to keep it at this level for at least 12 months.
March 22: Announced that it Announced that it ~~will~~ wil purchase up NZ$30 purchase up NZ$30 ~~billion ($17 billion~~bil ion ($17 bil ion) of ) of
government bonds in the secondary marketgovernment bonds in the secondary market over the next 12 months. It over the next 12 months. It ~~will~~ wil seek to seek to
buy NZ$750 buy NZ$750 ~~million~~ mil ion bonds a week across a range of maturities,bonds a week across a range of maturities, via an auction via an auction
process. process.
March 24: Reduced banks’ core funding ratios to 50% from 75% to help banks make Reduced banks’ core funding ratios to 50% from 75% to help banks make
credit available. credit available.
March 30: Announced that it was deploying more Announced that it was deploying more tools to provide additional tools to provide additional
liquidity to the corporate sector and support market functioning to offset the impact liquidity to the corporate sector and support market functioning to offset the impact
of the pandemic. A new weeklyof the pandemic. A new weekly Open Market Operation—to be held each Tuesday—Open Market Operation—to be held each Tuesday—
~~will~~ wil provide liquidity in exchange for eligibleprovide liquidity in exchange for eligible corporate and asset-backed securitiescorporate and asset-backed securities by by
offering up to NZ$500 offering up to NZ$500 ~~million ($300 million) for terms~~ mil ion ($300 mil ion) for terms out to approximately three out to approximately three
months, starting on March 31. The bank also months, starting on March 31. The bank also ~~will~~ wil offer to purchase government bonds 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 Announced a spending package of NZ$12.1 ~~billion~~bil ion ($7.3 ($7.3 ~~billion~~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 economy; approximately NZ$5 ~~billion will~~ bil ion wil go toward wage subsidies for businesses, go toward wage subsidies for businesses,
NZ$2.8 NZ$2.8 ~~billion~~bil ion toward income support, NZ$2.8 toward income support, NZ$2.8 ~~billion~~ bil ion in business tax relief,in business tax relief, and and
NZ$600 NZ$600 ~~million~~ mil ion toward the airline industry. toward the airline industry.
March 24: Announced that retailAnnounced that retail banks banks ~~will~~ wil offer a six-month principal and interest offer a six-month principal and interest
payment holiday for mortgage holders and payment holiday for mortgage holders and ~~small~~ smal business customersbusiness customers whose incomes whose incomes
have been affected by the economichave been affected by the economic disruption fromdisruption from COVID-19. The government and COVID-19. The government and
the banks the banks ~~will~~ wil also implementalso implement a NZ$6.25 a NZ$6.25 ~~billion~~bil ion ($3.62 ($3.62 ~~billion~~bil ion) Business Finance ) Business Finance
Guarantee SchemeGuarantee Scheme ~~for small~~ for smal and medium-sizedand medium-sized businesses.businesses. ~~It will~~ It wil include a limitinclude a limit of of
NZ$500,000 per loan and NZ$500,000 per loan and ~~will~~ wil apply to firmsapply to firms with a turnover of between with a turnover of between
NZ$250,000 and NZ$80 NZ$250,000 and NZ$80 ~~million~~ mil ion per annum (the government per annum (the government ~~will~~ wil carry 80% of the carry 80% of the
credit risk,credit risk, with the other 20% to be carried by the banks). with the other 20% to be carried by the banks).
Norway
Norges Bank
March 13: Cut its key interest rate to 1% from 1.5%, as it seeks Cut its key interest rate to 1% from 1.5%, as it seeks to counter the to counter the
economiceconomic impact of the COVID-19 pandemic. It indicated that it would offer funding impact of the COVID-19 pandemic. It indicated that it would offer funding
to banks to help counter the volatilityto banks to help counter the volatility in financial marketsin financial markets and announced that banks’ and announced that banks’
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~~ al eviate the economicthe economic impact fromimpact from the COVID-19 outbreak. It also offered a third the COVID-19 outbreak. It also offered a third
batch of extraordinary loans to the banking industry to ensure it has enough for the batch of extraordinary loans to the banking industry to ensure it has enough for the
months ahead. months ahead.
March 30: Increased its planned issuance of government bonds this year to between Increased its planned issuance of government bonds this year to between
~~70 billion and 85 billion~~ 70 bil ion and 85 bil ion Norwegian crowns ($6.68 Norwegian crowns ($6.68 ~~billion~~bil ion-$8.11 -$8.11 ~~billion~~bil ion) from) from an an
original plan of 55 original plan of 55 ~~billion~~bil ion crowns, crowns, ~~following~~ fol owing the government’sthe government’s decision to offer loans decision to offer loans
worth tens of worth tens of ~~billions~~bil ions of crowns in emergency funding to companies hurt by the of crowns in emergency funding to companies hurt by the
coronavirus outbreak. coronavirus outbreak.
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March 31: ~~Will increase~~ Wil increase further its daily purchase of Norwegian currency to 2 further its daily purchase of Norwegian currency to 2 ~~billion~~bil ion
crowns ($190 crowns ($190 ~~million)~~ mil ion) per day from 1.6 per day from 1.6 ~~billion~~bil ion crowns crowns in orderin order to make funds to make funds
available for the government’savailable for the government’s fiscal budget. (On March 18, it announced that it would fiscal budget. (On March 18, it announced that it would
increaseincrease it to 1.6 it to 1.6 ~~billion~~bil ion Norwegian crowns per day from 500 Norwegian crowns per day from 500 ~~million~~ mil ion crowns.) crowns.)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

James K. Jackson, Coordinator James K. Jackson, Coordinator
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

Martin A. Weiss Martin A. Weiss
Karen M. Sutter Karen M. Sutter
Specialist in International Trade and Finance Specialist in International Trade and Finance
Specialist in Asian Trade and Finance Specialist in Asian Trade and Finance

Andres B. Schwarzenberg Andres B. Schwarzenberg
Michael D. Sutherland Michael D. Sutherland
Analyst in International Trade and Finance Analyst in International Trade and Finance
Analyst in International Trade and Finance Analyst 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
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