Wealthiest countries such as the United States, Japan, the United Kingdom, and others are ready to spend trillions of dollars. Moreover, the governments are willing to do whatever it takes to save the global economy from sinking into depression.
It is important to mention that commitments from central banks and governments as of March are close to $7 trillion. The total includes loan guarantees as well as government spending and tax breaks, etc.
Out of $7 trillion, $2 trillion comes from the U.S. rescue package. The U.S. Senate unanimously approved a $2 trillion stimulus bill. Based on the preliminary information, Congress is expected to vote on Friday.
Also, the figure includes an anticipated 30 trillion yen ($274 billion) stimulus from Japan. The country may approve this stimulus package next month.
Europe’s biggest economies also plan to spend billions of euros to support the local economies. Interestingly, a combined effort is bigger in comparison with the one from the 2008 financial crisis. Moreover, currency combined effort may surpass $7 trillion as the costs associated with the ongoing situation may require an even bigger response.
According to Bank of America economist Joseph Song, the economy may require close to $3 trillion in fiscal stimulus. Also, there is a chance that even $3 trillion may not be sufficient to boost the economy.
G20 and the global economy
On Thursday, G20 leaders who represent the world’s largest economies said that they are willing to do whatever it takes to minimize the economic damage from the pandemic. Furthermore, according to G20 leaders they are ready to take measures to restore global growth. The countries pledged to allocate $5 trillion for stimulus programs.
However, the economy can’t begin to recover in earnest until bars and restaurants start to open their doors. Moreover, people should go back to work and there are prerequisites as well.
As stated-above, lawmakers are expected to pass a $2 trillion package. Moreover, U.S. Congress already approved more than $112 billion to provide funding for vaccine research. Also, part of the money will go to the people who are being tested or treated for Covid-19, it is a disease caused by the novel coronavirus.
The U.K. government unveiled its stimulus package, which includes $397 billion in loan guarantees and suspended local business taxes for the retail, hospitality sectors for 12 months. Also, the government plans to take other measures as well.
Germany has the largest economy in Europe, the government of the country unveiled a rescue package worth up to $825 billion. Countries around the world also presented their stimulus packages.