In their response to the pandemic, governments have taken exceptional steps to preserve lives and livelihoods, such as asking citizens to stay at home and subsidizing private-sector wages.
As the focus shifts to reviving social and economic life, what role will governments play in the economy, how will they pay for economic support packages and what actions can businesses take as this process unwinds?
Around the world, governments have acted with lightning speed to implement policies intended to protect lives and safeguard the economy in the face of the pandemic.
Now, many governments are loosening restrictions on social activity. But they may have to reimpose them if this leads to spikes in infection rates among their population. Restrictions will vary from country to country and even from region to region within a country. This will affect consumer activity, and the general uncertainty and restrictions will continue to depress demand.
Governments are continuing to refine guidance and regulations to help keep people safe at work, which includes limiting capacity levels and ensuring social distancing in workplaces. The evolution of the guidance and regulations varies from country to country, and even within countries, creating challenges for those businesses that operate in multiple jurisdictions.
During the crisis, many governments have also gone to extraordinary lengths to provide financial support to businesses and households. EY has tracked economic support programs in over 130 jurisdictions, which have collectively implemented over 2000 fiscal and monetary policy provisions. Across the globe, the value of these programs ranges from 3% to 39% of GDP?. But this support cannot continue indefinitely and will likely be phased out before the crisis is resolved entirely.