Tracking the $9 trillion global fiscal support to fight COVID-19

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(PHOTO: MORIO TAGA/JIJI PRESS PHOTO/NEWSCOM)

By Bryn Battersby, W. Raphael Lam, and Elif Ture

Governments have put forward swift and significant emergency lifelines to protect people in response to the pandemic. We measured these in the April 2020 Fiscal Monitor and as countries have stepped up their efforts, we have updated the numbers.

So, where does the global fiscal support stand now?

The total is about $9 trillion, or $1 trillion more than the estimates just over a month ago. The breakdown looks like this: direct budget support is currently estimated at $4.4 trillion globally, and additional public sector loans and equity injections, guarantees, and other quasi-fiscal operations (such as non-commercial activity of public corporations) amount to another $4.6 trillion.

Onward and upward 

The upward revision was largely because of a second wave of measures by governments as the economic fallout from the pandemic proves more severe.

For example, the United States approved an additional fiscal package of $483 billion on April 23. Japan revised its initially conditional cash transfers program into a universal one to provide an additional $83 billion in support to households on April 20, while France and Korea introduced additional measures such as transfers to support households.

As in April, the Group of Twenty (G20) advanced and emerging market economies account for the bulk of the global fiscal support—$8 trillion. The total revenue and spending measures for G20 countries account for 4.5 percent of GDP on average, larger than those during the global financial crisis.

The fiscal measures take various forms and have different budgetary and debt-related implications.

The estimates focus on discretionary revenue and spending measures but exclude deferral of taxes and social security contributions to the extent possible. We exclude them because they involve a temporary delay of revenue, which would be collected in the future (sometimes within the same fiscal year).

The estimates also include a separate classification for governments’ provision of loans and equity injection that have an immediate effect on the government balance sheet, as well as guarantees that expose the governments to risks if the guarantees were called in down the road.

The International Monetary Fund (IMF) will continue providing timely updates of countries’ fiscal support in response to the COVID-19 pandemic. You can find more country-specific measures from the fiscal monitor here (PDF).

You can find out more about countries’ broader policies, including fiscal, monetary and financial policies to fight the pandemic in the IMF policy tracker.

Paul Elger, Susan Yang, and Yuan Xiang worked on the Fiscal Monitor and have contributed to this blog.

Bryn Battersby is a senior economist in the Public Financial Management division of the Fiscal Affairs Department. W. Raphael Lam is a Senior Economist in the Fiscal Affairs Department. Elif Ture is an economist in the Fiscal Affairs Department.

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