Guardians of the world economy stagger from rescue to recovery
The world’s go nments and central banks are shifting from rescue to recovery mode as the deepest slump since the Great Depression shows signs of bottoming out.
After rolling out trillions of dollars worth of measures to prevent their economies and markets from collapsing, they are now doubling down with even more spending to backstop a recovery as coronavir s lockdowns ease. In what counts for good news these days, Bloomberg Economics’ global GDP growth tracker showed economies contracted at an annualized rate of 2.3% in May, less than the 4.8% slump in April.
“Policy makers are moving from triage to recovery,” said Deutsche Bank Securities Chief Economist Torsten Slok. “They are realizing that more fiscal support will be needed to households and small businesses to prevent this liquidity crisis from turning into a solvency crisis.”
The new wave of stimulus has both go nments and central banks moving in sync to continue flooding lenders, markets and companies with ch credit at an unprecedented pace.
The European Central Bank last week expanded its asset purchases by 600 billion euros ($677 billion) to 1.35 trillion euros, and extended them until at least the end of June 2021. And Germany’s go nment agreed another 130 billion-euro fiscal stimulus push and said it will back a proposed new 750 billion-euro European Union recovery fund.
“Action had to be taken,” ECB Presi nt Christine Lagarde said in a press conference.
It’s a similar story in Asia.
Japan is planning another $1.1 trillion worth of spending in its biggest splurge yet and the central bank in May called an emergency meeting to roll out 30 trillion yen ($274 billion) of loan support for small businesses.
last week unveiled another 3.6 trillion yuan ($508 billion) in spending and South Korea’s 76 trillion won ($63 billion) ‘New Deal’ fiscal package is its largest to date.
In the U.S., lawmakers continue to debate extra fiscal stimulus and the Federal Reserve, which meets on June 10, has just launched a new Main Street Lending Program, the latest in trillions of support it has already poured into the economy and markets.
While the Fed is unlikely to signal any moves when its offi als gather this week, many economists expect it to harden its commitment to easy monetary policy later in the year and perhaps even start pursing a Japan-style campaign to control long-term borrowing rates.
The latest U.S. jobs numbers give some hope that the stimulus unleashed so far is begng to kick in. A record 2.5 million workers were added by employers during May while unemployment declined to 13.3%, wrong footing economists who had forecast widespread job losses.
To be sure, there’s far from consensus that the latest wave of support will be enough to get growth back to where it was at the start of the year.
Economic recovery in India will be largely attributed to people's resilience than support of gt or central bank policies.India will bounce back much faster than pundits have imagined
and zero from our Modi Go nment...all he is worried about his image...
The danger will continue if the vir s does not die out soon
India is spending ZERO on this part. Very sad FM not competent
After Global financial crises (GFC) when mots countries went into recession and recorded negative to below 2% growth our gold medal economist gave us 7.8% growth without making any noise.
's greed to become the largest economy in the world by hook or by crook has resulted in this pandemic. It is now time for the world to ban and all products. Not a single item should be exported out of . Kill their economy.
India has given 20 lac crore to the poor and migrants and it was the highest around the world. We all Indians should be proud of modi ji and BJP
never to put all eggs in one basket and that egg for world was , was the main supplier for all countries around the world and then threw the card of made vir s who wanted to be world number one and now are the results for the world. now entire world is boycotting made goods
Lock down proved costly for backward country like India.
looking at the kind of stimulus packages in real terms offered by the foreign go nments, we seem to be far behind and too slow in action.
Bjp is best in india and doing good job
The article says world go nments and central banks are moving in sync to provide easy loans to lenders. But in India, whatever the central go nment passes on to banks, the banks still charges the same interest rates that ested before Corona.
The economic recovery of India will be faster than any other country. wait and watch.
India too must chart its path of recovery , though current measures may be just a begng . fiscal discipline alongwith austerity are must .
We will get back soon
Shah Jagdish P
It is indeed an acid test for the world to revive economy within short time. It is big challenge before them to put economy on track. India under leadership of Modi, will come out from rescue to recovery mode.
More and more money push is needed by all countries to bring back economy and GDP
Its a going to be a long path filled with lot of pot holes,weeds etc,before the World Economy stages a noticeable comeback.