G20 countries rush countercyclical measures

Thirteen of the twenty largest economies in the world announced the tax deferral and twelve will provide direct income subsidies for workers

Thirteen of the twenty largest economies in the world announced the tax deferral and twelve will provide direct income subsidies for workers with the aim of mitigating the social impact that the crisis unleashed by the coronavirus pandemic will have, so there could be a rebound in the second semester.

Among other measures, governments are announcing state credits and guarantees for companies; postponement of debt maturities; reinforcements to social security payments, such as pensions and the equivalent of family allowances.

This is indicated by a survey carried out by the US agency Moody’s, which indicates that the negative perspective on global sovereigns detailed in its report on Global Sovereign Outlook 2020 reflected the “growing vulnerability” of the countries.

“The blows from the coronavirus outbreak and the sharp drop in oil prices are exposing the vulnerability of sovereigns across each of the credit channels we identified as weak,” the agency said.

In this sense, he indicated that he foresees a drop in the Gross Domestic Product of these twenty economies, including Argentina, with fiscal weakening and a deepening of the vulnerability of the weakest sovereigns, although there is light at the end of the tunnel.

“We assume that the crisis, however severe it may be, remains relatively brief and that growth resumes in the second half of the year,” said Moody’s.

In this scenario, and given that the countries are bringing out all their strengths and putting into practice all their countercyclical tools, “the immediate credit and rating implications for sovereigns would be relatively limited.”

However, the agency warned that the impact of the crisis is dynamic and could change: “If the damage to growth were more serious and prolonged, with an even greater increase in debt and less accessible affordable financing than expected, the implications loans for sovereigns would be deeper. “

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