Advanced G20 countries have really fired up the cash canon compared to emerging G20 economies during Covid-19. But without this sizeable government spending by both the advanced and the emerging G20 countries, G20’s total contraction could have been four times more severe.
Economic Comment Dutch version
Hard economic data usually comes available at quite some lag. To gauge the economic impact of COVID-19 we look at more timely economic indicators that are readily available. Data on traffic jams, international flights, and restaurant bookings are released sooner and more frequently. This helps us to better monitor the economic situation during the COVID-19 crisis.
President Biden has presented his American Jobs Plan, which amounts to about $2 trillion in spending on infrastructure and care. This should be financed by raising the corporate tax rate to 28% from 21% and by other tax measures aimed at corporations.
The rising tensions between China, the EU, US, UK and Canada could have wide implications, from hurting the chances of ratifying the recent EU China investment deal to effects on the global supply of cotton.
India showed 0.4% GDP growth in Q3 of FY21. Unfortunately a second wave of Covid cases is on the rise, which might hamper growth in the next months. Although vaccine implementation started mid-January, the pace of vaccination must accelerate if India is to reap economic benefits in 2021. Fortunately, availability of vaccines is not a constraint.
China’s new five year plan is ambitious, yet it contains inherent trade-offs. When push comes to shove, we believe China will sacrifice growth for resilience and deleveraging for domestic stability.
President Biden has delivered a large covid relief package within the first 100 days of his administration that will support Americans at least through early September. By not fully exploring the bipartisan route, Biden has limited the type of policies that he can get through Congress going forward.
Offsetting CO2-emissions through voluntary carbon credits plays a role in the transition to a zero-carbon economy. Although the market is small and oversupplied, things are changing. Demand from non-regulated sectors like aviation is driving market growth.
Economic Quarterly Report
We expect that recovery could start earlier in the Netherlands than in other countries, but the pace of vaccination rollout is just one of the uncertainties to be faced.