April 17, 2021

How the Stimulus Could Power a Rebound in Other Countries

Since then, the U.S. government has passed a $1.9 trillion relief package, and the I.M.F. has signaled that the estimates for the country’s growth will be marked up further when it releases fresh forecasts on Tuesday.

The recent relief package continues a trend: America has been willing to spend to combat the pandemic’s economic fallout from the start.

America’s initial pandemic response spending, amounting to a little less than $3 trillion, was 50 percent larger, as a share of gross domestic product, than what the United Kingdom rolled out, and roughly three times as much as in France, Italy or Spain, based on an analysis by Christina D. Romer at the University of California, Berkeley.

Among a set of advanced economies, only New Zealand has borrowed and spent as big a share of its G.D.P. as the United States has, the analysis found.

In Europe, where workers in many countries were shielded from job losses and plunging income by government furlough programs, the slow pace of the European Union’s vaccination campaign will probably hurt the economy, said Ludovic Subran, the chief economist of German insurance giant Allianz.

On Wednesday, France announced its third national lockdown as infected patients fill its hospitals.

Mr. Subran also questioned whether the European Union can distribute stimulus financing fast enough. The money from a 750 billion-euro, or $880 billion, relief program agreed to by European governments in July has been slow to reach the businesses and people who need it because of political squabbling, creaky public administration and a court challenge in Germany.

Article source: https://www.nytimes.com/2021/04/02/business/economy/stimulus-global-economy.html

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