National fiscal responses to the COVID-19 pandemic: A cross-country comparison

Many governments around the world are deliberately deactivating their economies, albeit with varying severity, as a central part of their public health strategies to address the COVID-19 pandemic. This extraordinary supply-side economic shock will elicit a rapid downturn in domestic and global demand. Ahead lies potentially the worst economic downturn since the Great Depression, along with a greatly expanded role for the state in economic affairs.

Massive fiscal packages have been announced in recent weeks by many advanced economies. The primary aim, in effect, is to provide “bridging” cash flow to households and businesses to see them through a shutdown period of uncertain duration. While there are some differences, the bailout packages are gradually converging across countries in timing, size and scope.

As of April 1st, Canada has announced fiscal support totaling around $190B, or about 8% of GDP. This is similar to several other national governments (Figure 1). Federal spending will be supplemented by provincial economic support packages (e.g., equivalent to around 3% of GDP in B.C.). This analysis does not consider sub-national fiscal packages by any country.

Figure 1 (shown above) compares national government fiscal packages for Canada, Australia, Denmark, Germany, the United Kingdom and the United States.

Table 1 (see page 2 of the Business Alert) compares the monetary policy measures of the Bank of Canada, Reserve Bank of Australia, European Central Bank, Bank of England and U.S. Federal Reserve.

Table 2 (see pages 3-6 of the Business Alert) provides details on their direct spending and tax deferral measures provided for households and businesses. It also shows liquidity supports and credit guarantees provided by government agencies, however these are not included in the fiscal package totals.