World rolling out aid measures to mitigate COVID-19 economic fallout
Countries and organizations around the world are rolling out multiple aid measures as the coronavirus pandemic has taken a heavy toll on the global economy.
So far, more than 200 countries and regions are plagued by the virus, which has infected over 2.1 million people with over 143,000 deaths globally, according to a Johns Hopkins University tally Friday.
The global economy is on track to contract "sharply" by 3 percent in 2020 as a result of the pandemic, much worse than during the 2008-09 financial crisis, according to the World Economic Outlook (WEO) report released by the International Monetary Fund (IMF) Tuesday.
A man crosses a road in the rain near the International Monetary Fund Headquarters in Washington DC, the United States, on April 13, 2020.
International cooperation needed
Multilateralism is more needed than ever to prevail over the pandemic.
Global debt is estimated to increase by 13 percentage points to reach 96.4 percent of gross domestic product (GDP) in 2020, as the COVID-19 pandemic leads to higher spending and plunging revenues, the IMF said Wednesday.
On the same day, IMF Managing Director Kristalina Georgieva said Wednesday that more than 100 countries have asked the multilateral lender for emergency financing amid the COVID-19 pandemic.
"We are responding to an unprecedented number of calls for emergency financing - from more than 100 countries," Georgieva said at a press conference for the virtual 2020 Spring Meetings, adding lending programs have already been approved at record speed for over 20 countries, with many more to come.
"We have just doubled access to our emergency facilities, which will allow us to meet the expected demand of about US$100 billion in financing," she said.
Earlier in March, World Bank Group President David Malpass said that the multilateral lender is finalizing a package that could provide as much as US$160 billion in financial support for countries heavily hit by COVID-19.
"The goals are to shorten the time to recovery; create conditions for growth; support small and medium enterprises; and help protect the poor and vulnerable," Malpass told a conference call of the Extraordinary Group of Twenty (G20) Leaders' Summit, according to a statement released by the World Bank.
The G20 countries announced Wednesday the injection of over US$7 trillion into the global economy, Al Arabiya TV reported.
The injection of money aims to protect jobs, businesses and economies in the face of the novel coronavirus, Saudi Finance Minister Mohammed al-Jadaan told a press conference held after a meeting of the G20 finance ministers and central bank governors.
Photo taken on April 17, 2020 shows the World Bank headquarters in Washington DC, the United States.
Domestic economics stimulus
With many nations predicting a plunge in GDP for this year, governments have adopted various policies to stimulate domestic growth.
The number of initial jobless claims in the United States totaled 5.2 million last week as the COVID-19 fallout ripples through the workforce, following staggering figures of over 6 million in the previous two weeks, the US Bureau of Labor Statistics reported Thursday.
Neel Kashkari, president of the Federal Reserve Bank of Minneapolis on Thursday urged large banks to raise capital to help economy weather the COVID-19 pandemic.
"Large banks are eager to be part of the solution to the coronavirus crisis. The most patriotic thing they could do today would be to stop paying dividends and raise equity capital, to ensure that they can endure a deep economic downturn," he wrote in the Financial Times.
Also on Thursday, Egyptian Finance Ministry announced that public investments will be increased by 10 billion Egyptian pounds (nearly US$633 million) to create more job opportunities.
"The move is aimed at paying the dues of contractors and suppliers and upgrading the quality of services introduced to the public," Minister of Finance Mohamed Maait said in a statement.
After announcing an emergency interest rate cut and increase in wage subsidies for businesses in March, Canada on Thursday announced an expansion of emergency government assistance to enable greater numbers of sole proprietors or entrepreneurs — who run seasonal operations and who were previously shut out to qualify for a business loan — to have access to one following changes to the government's Canada Emergency Business Account.
Previously, small businesses were required to have a minimum payroll of US$35,000 in 2019 before they could apply for an interest-free loan of up to US$28,000. The minimum threshold has now been lowered to US$14,000.
