The impact of the epidemic on the world economic stimulus plan is unpredictable

Can "helicopter money" boost economic confidence? (Global Hotspot)

The global pandemic of the new pneumonia epidemic has put a brake on global economic growth. Affected by the epidemic, various problems such as austerity in social consumption, suspension of production and layoffs of enterprises, and increased poverty caused by unemployment emerged. In response to the unprecedented downward pressure on the economy, countries around the world are actively seeking multilateral cooperation, and they have also launched a "helicopter to spread money" economic stimulus plan. But at the same time, the international community's concerns about inflation have also grown.

In the future, where will the global economy go? The world is looking for direction in uncertainty.

May suffer the worst recession

Airplanes across the country are idle on the runway, the busiest highways are empty during peak hours, the parking lot is empty, and port shipping activity has declined sharply ... According to satellite images collected by Silicon Valley ’s Satellite Data Corporation, affected by the epidemic, the United States ’ Economic activity has fallen into a severe stagnation state.

The BBC commented that US stocks fell steeply, the job market was frozen three feet, and the curve of the unemployment rate was like a steep cliff. On April 2 local time, the US Department of Labor released the latest data showing that the United States had 6.648 million unemployed employees as of the beginning of the week on March 28, again setting a new historical record, highlighting the deterioration of labor market conditions.

The economic situation in Europe is grim. According to the German "Photo" reported on March 31, the epidemic severely hit small and medium-sized companies, many companies face bankruptcy, the German government has received at least 360,000 SME owners crisis assistance applications. Moody's also estimated in the latest global macro outlook that in the first half of 2020, advanced economies in Europe will experience economic contraction. It is expected that the contraction rate of the German economy will be 5.4%, Italy's 4.5%, and France's 3.5%.

Asia is also not optimistic. According to CNN, the World Bank recently issued a report warning that if "emergency action" is not taken, the economic consequences of the new coronavirus pandemic may lead to the addition of 11 million poor people in East Asia and the Pacific. The Asian region may experience the worst recession in more than 20 years.

The "Japan Economic News" website reported that the spread of the new crown pneumonia epidemic has clearly shaken the global financial market in the first quarter of 2020. The global stock market dropped 21% on a quarterly basis, the largest decline since the fourth quarter of 2008.

UN Secretary General Guterres warned that the new coronary pneumonia epidemic is the biggest challenge facing the world since World War II and may trigger a "unparalleled in modern history" recession.

According to the US Consumer News and Business Channel website, the S & P Global Rating predicts that with the global economic turmoil caused by the New Coronary Pneumonia epidemic in Europe and the United States, and the nationwide blockade policies imposed by major countries, the global economy may panic. .

Multi-country festivals offer great financial aid

In order to alleviate the impact of the epidemic on the economy, governments of various countries are launching heavy economic assistance policies.

According to the British "Financial Times" report, the German government is about to pass a 156 billion euro 2020 emergency "supplementary" budget, which includes direct funding for small businesses. The French government has also set up a solidarity mutual aid fund with a total amount of 1 billion euros, and small companies that meet the requirements can apply for a subsidy of 1,500 euros.

Reuters reported that on March 28, Italian Prime Minister Conte approved a € 4.3 billion municipal fund to help businesses and individuals overcome difficulties. Prior to this, the Italian cabinet had approved a total of 25 billion euros in fiscal stimulus measures.

According to the Japan Economic News, Japan ’s forthcoming economic aid plan for the epidemic will reach more than 10% of Japan ’s total annual GDP (close to US $ 500 billion).

According to the "New York Times" report, following the 2.2 trillion US dollars economic stimulus plan, the US government began to formulate the next stage of economic stimulus plan to deal with the epidemic.

International organizations have also taken action. The World Bank pledged to provide $ 14 billion in financial support to developing countries and allocate up to $ 160 billion within 15 months to protect the poor and vulnerable groups. The International Monetary Fund announced at the beginning of March that it will provide loans of about US $ 50 billion to low-income and emerging market countries seeking assistance, of which US $ 10 billion is interest-free loans to low-income countries.

The international community is generally concerned about economic aid measures that are popular worldwide. "Helicopters squander money, can inflation still be far behind?" The Financial Times commented on March 31 that the benefit of "copters squandering money" is to give the purchasing power directly to people with strong consumption will. But overly generous unemployment insurance increases the risk of inflation.

Feng Weijiang, a researcher at the Institute of World Economics and Politics of the Chinese Academy of Social Sciences and director of the National Security Research Institute, said in an interview with the newspaper that the current impact of the epidemic on the economy is showing a trend of spreading from the supply side to the demand side, but the roots are still on the supply side. Only stimulating demand can not achieve the desired effect. It is also necessary to pay attention to the structural reform to match it. It is necessary to create an immune and intelligent supply system.

Cooperation is the way to solve problems

"To get out of the predicament of the global economy, we need true global cooperation." Feng Weijiang said that cooperation in all parts of the supply chain is particularly important. It is necessary to upgrade the existing global supply chain to make it more safe and effective, rather than retreating to the "dumping and protecting" docking economy.

Multilateral cooperation is taking place globally. A few days ago, the leaders of the Group of 20 (G20) responded to the statement of the New Coronary Pneumonia Special Summit that the G20 is committed to working with the World Health Organization, the International Monetary Fund, the World Bank Group, the United Nations and other international organizations in their respective areas of responsibility Take all necessary actions to overcome the epidemic. The statement promises to use all available policy tools to minimize the damage caused by the pandemic to the global economy and society, restore global growth, maintain market stability and increase economic resilience.

"The United States and China should work together at this time instead of complaining to each other." Stephen Roach, a senior researcher at the Jackson Center for Global Affairs Research at Yale University in the United States, wrote in Bloomberg News that despite the commitments made by the G20 special summit, the face of disease Rage, the world is likely to be fragmented. The United States and China should not miss this opportunity to fight the epidemic together. In good faith, the United States should immediately reduce tariffs on Chinese imports before the trade war. And China should also take corresponding measures.

The crisis tests European unity. So far, nine EU countries including France, Italy and Spain have called on the EU to implement a common lending policy to strengthen EU financial solidarity. Euro Group Chairman Centeno warned that if countries do not reconcile and cannot agree on plans to rescue Italy and Spain, the euro zone may fall apart.

"Developed countries must help less developed countries and support the latter's medical system to deal with the new coronary pneumonia epidemic." Guterres said that recovery from the crisis should also promote a fairer and more environmentally friendly economy.

Stephen Roach believes that the best way to restart the global growth engine is to flatten the growth curve of new coronavirus infections in various countries and around the world. "

Jia Pingfan

Jia Pingfan