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Motilal Oswal: Comparing Government Spending In Q2 CY20 Across Nations  

Motilal Oswal: Comparing Government Spending In Q2 CY20 Across Nations

Representational image of Indian currency.
Representational image of Indian currency.

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Motilal Oswal Report

The Covid-19 pandemic forced governments across the world to support their citizens, institutions and economic activity as much as possible. The massive fiscal stimulus implemented across nations, thus, is not surprising.

However, the difference in the fiscal support to economies is strikingly significant between advanced economies and the emerging and developing economies as a group.

Based on seven AEs (accounting for 82% of the entire AEs’ GDP) and 10 E&DEs (accounting for more than 75% of the entire emerging market economies’ GDP), global fiscal spending (weighted by respective nominal GDPs) grew 51% YoY in Q2 CY20, up from 5% in Q1 CY20 and the previous high of 15% YoY in Q2 CY09.

Notably though, fiscal spending in AEs almost doubled, while it increased by only 5% YoY in EMEs.

Since government spending declined for the second consecutive quarter in China, growth in fiscal spending in E&DEs (excluding China) was 17% YoY in Q2 CY20, nothing exceptional compared to the previous quarters.

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Motilal Oswal Eco Fiscal Spending.pdf

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