The global economy collapses due to COVID-19 (photo: Martha Harvey / Flickr)
The global economic crisis due to the coronavirus pandemic is inevitable. In parallel with the introduction of various restrictive measures and the search for a vaccine in the world, they are thinking about how to mitigate its effects and prevent complete paralysis of the economy.
According to the forecast of the Organization for Economic Cooperation and Development (OECD), the growth of the global economy this year due to coronavirus may slow down to 2.4%, compared with 2.9%, which was forecast in the winter.
But this is not the worst-case scenario вЂ” if the pandemic continues for a long time, including in the EU and the USA, global economic growth will fall to 1.5%, and many of the world's top economies will be in recession. Similar figures are also given in the S&P rating agency вЂ” they believe that global GDP will grow by no more than 1-1.5% by the end of the year.
вЂњEven if there is no global recession, we will get either zero or negative growth in many countries of the world, including the largest. Because of this, global growth will not only be low this year but will also be restored for a long time,вЂќ said OECD head Angel Gurria in an interview with the Air Force.
According to him, the losses from the coronavirus have already exceeded the losses from the terrorist attacks of September 11, 2001, and the global financial crisis of 2008.
MoodyвЂ™s rating agency in its forecast expects normalization of economic activity worldwide in the second half of 2020. But the agency emphasizes that the current forecast is characterized by a much greater degree of uncertainty than usual, because no one knows how long the epidemic will last.
The agency also determined which sectors of the economy will suffer the most losses due to COVID-19. It is expected that this is a tourism and related areas: air and sea transportation, hotel, gambling, and entertainment.
Moody also predicts that car and clothing manufacturers will face problems, primarily due to the destruction of supply chains, many of which are closed to Europe and especially China.
The oil and gas sector, metallurgy, the chemical industry, agriculture, and the media should suffer less from the crisis. But companies in the telecommunications and pharmaceutical sectors can benefit from the epidemic on the contrary, due to increased demand for their goods and services.
Shares of major companies are losing value (Photo: Fabio Suenaga / Flickr)
But if the situation goes according to a negative scenario, that is, if the problem with coronavirus cannot be resolved as a whole in the first half of this year, then top world economies may face a drop in GDP by 0.5%, and economies in developing countries by 3%.
In general, the measures taken by different countries to contain the crisis are quite similar. Virtually all anti-crisis measures include tax breaks, incentives and lower rates for individual taxes, maximum support for small and medium-sized businesses, which looks the most vulnerable in the current environment.
Governments also focus on maintaining employment, including direct compensation for salaries to employees of private companies, and supporting the level of consumption among the population.
For example, the British government allocated ВЈ330 billion to support business (about $388 billion). This is more than 15% of the country's GDP. This money will also be sent to large businesses, such as airlines, but primarily to medium and small businesses, such as pubs and restaurants.
They will be able to receive up to 25 thousand pounds of a one-time grant, another small business вЂ” up to 10 thousand pounds. Also, the tourism and entertainment business for a year will be exempt from real estate tax. And those who, in principle, can not cope with the payment of taxes, will have the opportunity to ask for a many-month delay.
In Germany, a separate Fund for Economic Stability is being created, which will invest in private companies in exchange for the repurchase of a share in their property, as well as provide credit guarantees. The total budget of the Fund is 500 billion euros.
Another 100 billion will go to business support programs through the state-owned KfW bank. In order to cope with the crisis, the country will even have to remove the maximum threshold of public debt enshrined in the Constitution.
Many people lose their jobs around the world (photo: Cliff Jackson / Flickr)
In Italy, which has so far suffered the most from the coronavirus pandemic from all EU countries, the government has allocated 25 billion euros for anti-crisis measures. In particular, for companies whose turnover due to quarantine has fallen by more than a quarter, the state will provide partial compensation for losses.
Travel guides and other workers also affected by the crisis will receive 600 euros per person, the same amount will be allocated to parents to pay for babysitting services for the child, and a delay in the payment of mortgages is also provided. In addition, loans of up to 5 million euros will be allocated for small and medium-sized businesses, more than half of the rent compensates companies that are closed due to quarantine.
In the United States, the debate over the allocation of the largest package of measures to support the country's economy вЂ” in the amount of almost $2 trillion вЂ” is in full swing. Now he is stuck at the Senate level. A democratic minority requires greater transparency in the allocation of $500 billion from a new fund that will provide loans to companies affected by the crisis.
The US Treasury expects that thanks to helping, small businesses will be able to hold out in the coming crisis weeks and not dismiss employees. Also, most Americans should receive direct payments from state funds: one thousand dollars per adult and $500 per child.
This money will be allocated to those who earn less than 99 thousand dollars a year (or 198 thousand per couple), that is, more than 91% of American citizens.
It is assumed that payments aimed at supporting the level of consumption will be one-time, but if the crisis drags on, then the US Treasury does not exclude that they will return to the idea of direct payments.
In addition, the US Federal Reserve, which has already reduced the discount rate to almost zero, will redeem Treasury securities in necessary volumes, if necessary, up to $4 trillion.
Against the backdrop of such economic measures, which are measured in tens and hundreds of billions of dollars, the anti-crisis measures of the Ukrainian government look especially modest. In particular, before April 30, FOPs were exempted from paying a single social contribution, land and real estate taxes were also abolished.
Until the end of spring, there will be no fines and tax audits, the deadlines for the mandatory use of cash registers (PPOs) have been shifted. On special loan programs to support small and medium-sized businesses, which have already suffered heavy damage due to quarantine, not yet said.
In Poland, it is planned to allocate more than 50 billion euros to support the economy, in small Estonia and Lithuania вЂ” 2 and 2.5 billion euros, respectively.
In the USA and EU countries, discussions are increasingly sharply about a balance between quarantine measures and containing a pandemic on the one hand вЂ” and preserving the economy on the other.
вЂњIt is impossible to live, even in self-isolation, and at the same time heal people, unless we continue the economic activity, which, simply speaking, gives us the opportunity to exist in this country,вЂќ said French President Emmanuel Macron.
US President Donald Trump also said that quarantine measures, although in some regions of the United States in the foreseeable future, will be lifted.
вЂњThe lockdown (вЂњ closure вЂњof the country) due to the coronavirus cannot last too long, because the consequences of the economic crisis can be even more terrible than the disease,вЂќ says an article in the influential American publication Politico.