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April 15, 2020updated 09 Jun 2020 8:23am

Are companies optimistic about growth prospects following COVID-19 stimulus measures?

The COVID-19 outbreak has marred the growth expectations of companies of all sizes globally, across multiple industries.

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An ongoing poll being conducted by Verdict to track the optimism/pessimism over the growth prospects of companies has revealed that incremental stimulus announcements have improved companies’ optimism about growth, following a disappointment over the size of the stimulus.

Analysis of the poll results depicts a clear shift in trend in the last week of March, especially after 28 March.

A sudden spike in pessimism was witnessed after 27 March, barely after the US Senate approved a $2t economic stimulus package, hinting of dissatisfaction over the inadequacy of the stimulus even as economic experts have warned of the worst recession COVID-19 would cause to the Western economies following the Second World War.

A number of Asian countries including India, Malaysia, Singapore and Pakistan as wells the Gulf Co-Operation Council (GCC) countries announced stimulus packages around the same time.

The stimulus announcements, although welcomed, left wanting for more as reflected in the poll. The pessimism about growth prospects hit a peak on 28 March.

The pessimistic trend, however, reversed after 02 April and improved gradually to hit a low on 08 April amid expectations that the US Fed would announce additional stimulus. On 09 April, the Fed unveiled an additional $2.3t-worth relief plan committing to buy notes from states and counties and provide financial support to mid-size businesses.

On the same day, news emerged about a potential second stimulus package to be announced by the Indian government in the days to come, aiming to safeguard the interests of micro, small and medium businesses, which account for a significant portion of India’s gross domestic product (GDP).

Launched on 13 March, the poll received 12,622 responses as of 13 April and is still ongoing.

Some of the notable economic stimulus announcements at March-end

  • Among GCC countries, the highest stimulus was announced by the UAE, at $34.3bn, followed by Saudi Arabia ($32bn), Oman ($20.8bn), Qatar ($20.6bn), Bahrain ($11.4bn) and Kuwait ($1.5bn).
  • Malaysia announced $22.5bn to support businesses affected by the disruption caused by the coronavirus outbreak, while Singapore announced a $33.7bn package to deal with the economic impact.
  • India announced a $22.6bn economic stimulus package, most of which is pumped through direct cash transfers to the poor and in food security measures.
  • Just days before the US Senate’s approval of the proposed package, Australia saw its second stimulus announcement, worth $46bn, by the government providing relief to individuals and businesses impacted by COVID-19.

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Navigate your business through the ‘new normal’

COVID-19 continues to dominate headlines the world over. It has already affected our lives forever. The way we work, shop, eat, seek medical advice, and socialize will all be different in the future. Quite how different remains to be seen, but all industries must plan for multiple eventualities.  Faced with an explosion of conflicting information on how to plan and implement successful recovery strategies, decision-makers are in dire need of a single, reliable source of intelligence.   GlobalData’s COVID-19 Executive Briefing gives you access to unparalleled data and insights to successfully navigate the uncertain road to recovery across the world’s largest industries. Understand every aspect of this disruptive theme by delving into: 
  •  COVID-19 infection update, with statistics on the spread, testing by country, as well as the latest data on vaccines and therapeutic developments 
  • Economic impact overview, covering stock market indices, GDP, unemployment rates, policy responses & GlobalData’s economic recovery scorecards 
  • Sector developments, with access to sector insight summaries, cross-sector indices and the leaders and laggards in each industry vertical 
Whatever your company’s imminent strategic plans, the long-lasting impact of COVID-19 must not be overlooked. Find out how to futureproof your business operations – download our report today. 
by GlobalData
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