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Showing posts with the label Global Recession

What is stimulus package?

A stimulus is a package of economic measures put together by a Govt. to stimulate a floundering economy. The objective of a stimulus package is to reinvigorate the economy and prevent or reverse a recession by boosting employment and spending.Types of StimulusMonetary StimulusFiscal StimulusQuantitative EasingThe monetary stimulus consists of cutting interest rate where fiscal stimulus has a cutting taxes or increased spending. Quantitative easing is an expansionary monetary policy in which the country's central bank purchases a large number of financial assets such as bonds from commercial banks and other financial institutions.

Global Impact of Coronavirus

One doomsday scenario in which the coronavirus outbreak could cost the global economy up to $2 trillion this year. After $2 trillion shortfall in global income, COVID-19 affects oil-exporting countries and also other commodity exporters badly. China might recover from COVID-19 impact by lending as China is a crucial source of long term borrowing for developing countries. 
COVID-19 has brought global recession by depressing global annual growth this year to below 2.5%, the recessionary threshold for the world economy. Central Banks are not in a position to solve this crisis alone. Their macroeconomics policy will need public investment and targeted welfare support. At present scenario, coronavirus has surpassed 100000 confirmed cases worldwide, it will make the impact more severe to the global economy.