In addition to the public health crisis caused by the coronavirus pandemic, the disease has crashed markets and devastated economies around the world. The coronavirus economic impact includes millions unemployed, countless businesses facing bankruptcy, and dramatic drops in the stock market. In a matter of months, COVID-19 has become one of the most important economic issues today. In response, the world's largest economies have passed stimulus relief plans.
During the 2008 recession, countries around the world prioritized financial austerity measures over stimulus spending. However, in the early months of the coronavirus pandemic, dozens of countries have passed massive stimulus packages, with many exceeding 10% of their GDP (as of Feb. 4, 2020.) Countries learned from the economic impact of SARS and the experience of the Great Recession. But the economic response to coronavirus has varied by country, with some prioritizing payments to individuals and others offering more support for business.
Total GDP: $22.32 trillion
GDP Per Capita (PPP): $67,427
How Much They’re Spending In Their Stimulus Relief: $2.2 trillion
Where Does That Money Go: In March 2020, the US government passed three coronavirus relief bills. The largest allocated $2.2 trillion, representing the largest economic relief package in US history.
The relief package includes $1,200 payments for adults and $500 payments for children, with phased-out support for higher-earning Americans.
The package also created a $367 billion employee retention fund targeted at small businesses. Unemployed Americans qualify for an additional $600 weekly payment from the federal government for four months. Unlike state-issued unemployment, the plan also covers freelance workers.
In addition to relief targeting individuals, the government provided loans totaling $17 billion for private companies linked to national security and $29 billion for national airlines.
Total GDP: $15.27 trillion
GDP Per Capita (PPP): $10,873
How Much They’re Spending In Their Stimulus Relief: RMB 2.6 trillion ($368 billion)
Where Does That Money Go: The first country hit hard by the coronavirus pandemic, China has announced over 2.6 trillion yuan in stimulus spending. The plan includes payments to families and loans for small lenders.
The government offered a temporary monthly allowance aimed at low-income families. As the pandemic continued to hit the economy hard, the central government doubled the allowance for the months of March to June 2020.
In addition, China accelerated unemployment insurance disbursements so they reach the unemployed faster. The government's tax relief plans include a waiver on social security taxes.
In March 2020, local governments also provided prepaid spending vouchers with the goal of increasing consumer spending.
Total GDP: $5.41 trillion
GDP Per Capita (PPP): $43,043
How Much They’re Spending In Their Stimulus Relief: 108 trillion yen ($989 billion)
Where Does That Money Go: Japan's stimulus relief includes cash payments for families and small business owners. The government also rolled out zero-interest loans and tax breaks to support people.
Japan announced its first coronavirus relief package in February 2020, before most other countries. In March and April, the government passed additional spending bills. The April plan included payments of up to $2,800 per household for anyone who faced income decline due to the pandemic.
Total GDP: $3.98 trillion
GDP Per Capita (PPP): $47,992
How Much They’re Spending In Their Stimulus Relief: €750 billion ($814 billion)
Where Does That Money Go: Germany's coronavirus relief package aims to protect jobs and businesses. The package includes a lending fund and increased government spending. Germany will spend $55 billion in cash payments to small businesses and the self-employed, with the goal to prevent bankruptcies.
The package also includes safety-net programs for the unemployed, including self-employed workers. The government will offer financial support for workers facing unemployment to prevent layoffs. Germany will also spend €200 to support struggling businesses and prevent bankruptcy or foreign takeovers.