Coronavirus: How are other economies dealing with the downturn?

Coronavirus: How are other economies dealing with the downturn?
Coronavirus: How are other economies dealing with the downturn?

Chancellor Rishi Sunak is due to set out the next instalment in the government's plans to help the British economy recover from the blows inflicted by the pandemic.

Already this week the government has announced new financial assistance for the arts sector and a package to promote green jobs.

Mr Sunak's new measures will build on other steps already taken, including the Coronavirus Job Retention Scheme, some tax holidays and deferrals for business and additional welfare benefits.

But how have other countries responded to what is both a public health crisis and a sharp economic downturn?

Details of the responses vary, although there are some common objectives. Many countries have given businesses financial incentives not to make workers redundant.

There are tax breaks and loans for firms to help them contend with a collapse in revenue, and there are measures to help the most vulnerable people. Many countries have also set aside extra funds to help health systems cope with the burden imposed by the virus.

Coronavirus: How are other economies dealing with the downturn?

The US

In the US, the core of the response is the Coronavirus Aid, Relief, and Economic Security Act, or Cares Act.

The International Monetary Fund (IMF) gives a figure for its total impact of $2.3tn (£1.8tn) or 11% of US annual income. It includes a total of more than half a trillion dollars extra for individuals in the form of tax rebates and unemployment benefits.

There were also "forgivable" loans for small businesses to enable them to retain workers. In effect that means grants because, yes, forgivable really does mean they don't have to be repaid in full provided conditions are met.

There was $25bn for a food safety net for the most vulnerable, which included an expansion of the programme which enables low income people and families to buy food (sometimes known as food stamps).

Subsequent legislation also provided $100bn for additional health related spending, a quarter of it specifically to expand testing for the virus.

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