What Will Be the Status of the Economy After Quarantine?By Alessa Flores | Mon, 03/23/2020 - 12:53
The World Health Organization’s latest update on the COVID-19 pandemic indicates a total of 292,141 confirmed cases and 12,784 deaths. Europe now has the largest number of infected people with 151,293 cases, while the Americas region reported 19,685 confirmed cases and 252 deaths. Although European countries such as Italy and Spain began their quarantine at the beginning of March, countries like Mexico have just started their official social-distancing programs through non-essential activities started to be canceled in previous weeks. But what is going to happen after quarantine? According to the World Economic Forum, the COVID-19 shock is severe, even compared to the financial crisis of 2007–2008. Consequently, government authorities and policymakers will have to support vulnerable segments of the population and smaller businesses to reduce the effects of this global situation.
Throughout the Americas, countries have introduced several measures to face the crisis. In Canada, a total of 1,371 confirmed cases of COVID-19 and 18 deaths have been registered. In response, Prime Minister of Canada Justin Trudeau said his government would introduce a package of economic initiatives to deliver CA$27 billion (US$18.6 billion) for direct assistance to Canadian workers and companies. Canadian authorities also aim to grow the Canada Child Benefit program until the end of 2020, giving more time for the submission of income taxes and providing mortgage assistance. Regarding companies, Canada aims to prevent layoffs, to expand the work-sharing scheme and to offer wage incentives and access to credit for small companies. The government will also reduce interest rates, taxes and will launch an insurance mortgage purchase plan.
In the US, the Center for Disease Control and Prevention reported the country has a total of 15,219 confirmed cases and 201 deaths. To support small businesses, President Trump announced that his administration would offer a US$50 billion relief package for small business owners impacted by the pandemic, as part of a significant initiative to mitigate the economic impact of this crisis. Moreover, the US Small Business Administration (SBA) announced all small business owners are currently eligible to apply for a low-interest loan. The SBA’s Economic Injury Disaster Loan program aims to provide small businesses with working capital loans of up to US$2 million to help them overcome the temporary loss of revenue they are experiencing.
To date, 316 confirmed cases of COVID-19 and two deaths have been confirmed in Mexico. President Andrés Manuel López Obrador reported on Monday that the effects of social distancing and the now official quarantine are starting to have an impact on the country's economic activity. Despite the fact that no federal steps have been announced to alleviate the potential economic impact to the country, Mexico City Governor Claudia Sheinbaum announced on March 20 that her administration is working on a strategy to support citizens and companies in Mexico City.
Faced with concerns, organizations such as CCE have issued recommendations to the federal government to preserve employment and mitigate the country's economic impact. According to CCE, these recommendations seek to ensure liquidity in the domestic market, to stimulate private consumption and investment and to give positive signals to international markets.