Corona Hits Economy, World Simultaneously Rolls Out Stimulus

JAKARTA. The World Health Organization (WHO) or UN health agency establishes the Corona or Covid-19 virus outbreak as a pandemic following the rapid spread of the virus to various parts of the world. To counteract the negative effects of the deadly virus on the economy, a number of countries in the world simultaneously issued a series of economic stimulus.

Indonesia 

Indonesia prepared a variety of stimulus - fiscal, monetary, and capital markets - to minimize the negative impact of the spread of the corona virus (Covid-19) on economic stability and the national financial market. The Government, The Central Bank of Indonesia (Bank Indonesia/BI), and the Financial Services Authority (Otoritas Jasa Keuangan/OJK) together responding to the dissemination of the Corona virus by each issuing a stimulus policy.

Read: Indonesia’s Variety of Stimulus Resists the Impact of Corona Virus

United States of America (USA) 

Quoted from cnbcindonesia.com, US President Donald Trump pledged that there is economic assistance package to reduce the adverse effects of the deadly virus dissemination. The stimulus option is likely to be withholding income tax (Pajak Pengasilan/PPh) to zero percent and tax relief for the tourism industry, including travel agencies and airlines.

In addition, the US Government will also make several efforts to help workers who are paid by the hour (partimer). US Treasury Secretary Steven Mnuchin said, the stimulus policy is more targeted at workers and small businesses, because they are considered the hardest hit from the Covid-19 pandemic.

Furthermore, the Federal Reserve or the Fed also cut its interest rate by 0.5% or 50 basis points to 1% -1.25%. The Fed Fund Rate (FFR) cut is carried out outside its monthly routine meetings.

European Union (EU)

Moving to the Blue Continent, the leaders of the European Union and member countries agreed to relax the spending rules. The agreement resulted on 10 March, 2020 also includes mobilizing funds of around EUR 25 billion to overcome the economic impact of the Corona Virus. European Union banking supervisors also stressed that they will remain focused to ensure the banking operations still continue to run.

"The health of our citizens is the first priority," European Council President Charles Michel was quoted as saying by euractiv.com.

Japan

Meanwhile, the Japanese Government has announced a stimulus policy package worth USD 4.1 billion to withstand the economic blow caused by the spread of the Corona outbreak. In this regard, the Sakura State Government will utilize the remaining fiscal budget reserves of JPY270 billion to assist small and medium-sized companies in applying for loans without interest. Including the provision of subsidies for residents who were forced to leave as the schools were temporary closed.

South Korea

A similar response also made by the South Korean Government, by allocating an additional budget of KRW 11.7 trillion, equivalent to USD 9.7 billion to counter the impact of the Covid-19 outbreak on the supply of goods and people's purchasing power.

South Korean Finance Minister Hong Nam-ki said the priority of using the additional budget to support the health system, child care, and outdoor markets. However, its realization will depend on parliamentary approval.

He added that the country's economic circumstance was in a state of emergency so the government also needed to focus its policies on efforts to minimize the impact of the Corona virus on the economy, especially for vulnerable sectors such as small, medium-sized businesses and entrepreneurs.

Australia 

Then, quoted from Reuters, the Australian government also disbursed health package funds amounting to USD 1.56 billion. The funds will be used to build clinics and offer free facilities to residents who want to consult with doctors via video call. (Ken/Ags)