April 29 (Reuters) - Governments worldwide are rolling out fiscal stimulus packages in the hope the public funds will boost demand, limit job losses and prevent a deeper downturn.
International Monetary Fund officials say that discretionary fiscal stimulus so far amounts to around 2.0 percent of GDP for 2009 and 1.5 percent in 2010 at G20 level. The IMF published updated estimates on April 26.
http://www.imf.org/external/np/fad/2009/042609.htm
Russia tops the 2009 table with discretionary stimulus worth 4.1 percent of GDP, then comes China at 3.1 percent, South Korea at 3.9 percent, Saudi Arabia at 3.3, China at 3.1, Japan at 2.4 Australia at 2.1 and the United States at 2.0 percent.
The aggregate G20 stimulus figures are 0.2 percentage points higher than estimates the IMF released in March, mainly because of extra packages announced in Japan, South Korea and Russia.
The IMF did not give revised impacts of the GDP impact in its April 26 release but those of mid-March were as follows:
-- aggregate G20 GDP gain from discretionary stimulus of anywhere between 0.4 and 1.3 percentage points in 2009 and 0.1-0.2 percent in 2010
-- aggregate G20 GDP gain from total fiscal expansion (which adds so-called automatic stabilisers to discretionary spending) of 0.8-3.2 percentage points in 2010 and 0.1-0.9 in 2010.
Below is a updated guide to fiscal stimulus programmes from Reuters correspondents across the G20. Descriptions focus on discretionary fiscal stimulus, or new public spending and tax breaks aimed at boosting activity. In Europe, with a larger welfare state, automatic stabilisers play a larger role alongside discretionary spending.
JAPAN: * Size: 15.4 trillion yen ($154 billion), or 3.1 percent of the GDP. The stimulus package would be paid for by issuing up to $110 billion in new bonds. * Timeframe: Current and next fiscal year, up to March 2010 * Focus: A range of subsidies, loans and other stimulus. * Rollout: Began October 2008, second, third packages were rolled out In March though some spending still pending formal parliament approval of state budget. * More to come? Latest one just approved but talk already within ruling LDP of need for another stimulus package for fiscal year starting in April 2010. -------------------- UNITED STATES: * Size: $787 billion, or about 5.5 percent of GDP * Timeframe: 2009-10 but tax cuts spread over several years * Focus: $287 billion in tax breaks, $500 billion in spending projects and money for social programmes * Rollout: signed into law in February. Obama has already told Treasury to get employers to reduce payroll withholdings * More to come? No sign of that. --------------------- CHINA: * Size: 4 trillion yuan ($586 billion), or 13.3 percent of 2008 GDP * Timeframe: Nov 2008 to end-2010 * Focus: 37.5 percent on roads, rail and water; 25 percent on post-earthquake reconstruction; 10 percent housing; 9.25 percent on rural infrastructure; 9.25 percent on economic upgrading; 5.25 percent on environmental protection; 3.75 percent on health and education * Rollout: began in fourth quarter of 2008 * More to come? Senior officials are pleased with initial impact; will watch data before deciding whether more is needed. ----------------------- GERMANY: * Size: 81 billion euros ($110 billion) officially for two packages, or 3.25 percent of GDP * Timeframe: Two-year 2009-10 * Focus: First package (31 billion euros) includes: a new lending programme of up to 15 billion euros for state development bank KfW; 3 billion for building renovations; 3 billion for infrastructure projects; 2 billion for transport investment; tax incentives to buy new cars and an increase in the amount that is tax deductable for house repairs * Focus: second package (50 billion euros) includes: 18 billion euros in investments; tax relief of 2.9 billion euros in 2009 and 6.05 billion in 2010; measures to boost demand for cars worth 1.5 billion euros; health insurance contributions will also be cut; the package also includes credit guarantees of up to 100 billion euros to help firms survive the credit crunch * Rollout: Both approved by parliament and being rolled out * More to come? No talk of it ----------- BRITAIN: * Size: 20 billion pounds ($29 billion), over 1 percent of GDP * Timeframe: three years from late 2008 * Rollout: began last December * Focus: mainly on sales tax cut (12.5 billion pounds worth, but also includes three billion pounds of extra capital spending) ------------- FRANCE: * Size: 26 billion euros ($35 billion) , 1.3 percent of GDP * Timeframe: 2009 principally * Focus: mostly public investment projects, also 1 billion euros for car sector, 1.8 billion euros for construction industry * Rollout: already in place * Extras: Separately, 6 billion euros in loans to car makers PSA Peugeot Citroen and Renault; strategic investment fund (FSI) with 6 billion euros, to invest in hard hit companies and already used in part for car parts manufacturer Valeo * More to come? Open question. Oppostion calling for consumption stimulus. Economy Minister Christine Lagarde says important to work on existing package before working on a new plan. --------------- ITALY: * Size: circa 7.0 billion euros ($10 billion), 0.4 percent of GDP * Timeframe: 2009 * Focus: tax breaks for poorer families, firms, fiscal incentives to buy cars, white goods, furniture * Rollout: began January 2009 * More to come? No. Economy Minister Giulio Tremonti says he is sceptical of large stimulus programmes. Recent announcements about project to build bridge to Sicily and promote home repairs have no figures/dates attached and no clear signal so far that new money involved -------------- CANADA: * Size: 40 billion Canadian dollars ($33 billion), or 2.5 percent of GDP, of which 1.5 percent of GDP in 2009, 1.1 percent of GDP in 2010 * Timeframe: two years 2009-10 * Focus: roughly C$12 billion in infrastructure, C$10 billion tax measures (C$21.8 billion over five years), C$18 billion in other measures such as worker training and benefits, social housing and aid for struggling sectors * Rollout: Government aims to start rollout in April * More to come? Yes, if needed, says Finance Minister Jim Flaherty -------------- RUSSIA: * Size: $61-62 billion, 5.2-5.4 percent of GDP * Timeframe: 2009 * Focus: Tax breaks account for 2.3-2.5 percent of GDP, subordinated loans for banks account for 1.1 pct or GDP * Rollout: for some measures has begun, others pending final approval of revised 2009 budget expected by end-March * More to come: expect more banking sector support measures, state guarantees for companies ------------- SOUTH KOREA: * Size: 69 trillion won ($51.2 billion), about 7.5 percent of GDP * Timeframe: up to and including 2012 * Focus: Tax breaks and environment-friendly investments which the government says could create more than 1.5 million jobs over several years * Rollout: underway. Recent plans to spend 17.7 trillion won requires parliament approval. Some of the tax cut plans will take effect gradually through 2012 * More to come? The government plans to offer tax cuts for those replacing their old vehicles with new ones, but it needs further discussion with the ruling party. It does not give the total value of the proposed tax cuts. ------------- INDIA: * Size: $4 billion worth in two packages, 0.4 percent of GDP * Focus: reviving domestic demand, rural/urban infrastructure and export sector * Rollout: began in October * More to come? Likely but not before election over in June Indian election rules do not allow government to announce policy measures in election period * Extras: government has also cut factory gate duties and service tax rates. ------------- AUSTRALIA: * Size: 52 billion Australian dollars ($37 billion)-plus in two packages since September 2008, the latest of which at A$42 billion is worth about 2 percent of GDP this year and 1.3 percent next year * Timeframe: 2009-10 for latest A$42 billion package * Focus: In latest package, A$28.8 for infrastructure, schools and housing, most of rest in cash payments to low-income households; October 2008 package of A$10.4 billion was mostly pre-Christmas cash payments for elderly, poor and first-home buyers * Note: Previous measures included A$6.2 billion in car industry assistance to protect jobs and develop environmentally-friendly vehicles *More to come? nothing for now -------------- BRAZIL: * No official stimulus programme to combat current crisis Government has had since 2007 a multi-year investment project to help create jobs and stoke the economy. It increased spending on the programme in February by 142.1 billion Brazilian reais ($64 billion), totalling 646 billion Brazilian reais ($289 billion) through 2010 * Timeframe: from 2007-2010 * Focus: automobile sector, exporters, construction and infrastructure * More to come: housing program to build 1 million homes for the poor still to be announced and also media speculation that auto sector tax breaks will be extended -------------- MEXICO: * Size: not specified. Congress approved a budget deficit of 1.8 pct of GDP for 2009 to boost growth, and government cites * Timeframe: 2009, as it is unquantified part of 2009 budget * Focus: extra funding for roads, education, an oil refinery and temporary health benefits for unemployed. Also frozen or reduced key energy prices such as for cooking gas and electricity * Note: hard to separate stimulus spending per se as government has not said how much many recently announced new programmes cost and is shifting budget resources around ------------- ARGENTINA: * Size: $30 billion roughly * Timeframe: 2009 and beyond, with some public works to 2015 * Focus: Infrastructure and energy projects, tax breaks and consumer loans for everything from cars to home appliances * Rollout: began in December 2008 ------------- SOUTH AFRICA: * Size: 787 billion rand ($84 billion) but this part of long-running programme to improve infrastructure and prepare for soccer World Cup (budget shifted from surplus to 3.8 pct of GDP deficit in 2009/10) * Timeframe: 787 billion is for three years from 2009/10 to 2011/12 * Focus: infrastructure * Rollout: infrastructure spending spree began in 2006 but the above amount relates to the next three years * More to come? government considering packages to aid struggling industries and companies, to be funded through state-run development finance agencies. No amounts yet. Details due in next few weeks and the minister of trade and industry stressed in March the government will not abandon its struggling auto sector, considered key for employment ---------------------- SAUDI ARABIA * No official package. Officials argue world's top oil exporter is least affected by global crisis, though monetary response of rate cuts has been there as in most countries * Steps taken fiscally: State Public Investment Fund extended project loan durations to 20 years from 15 years, with five-year grace period, and raised a cap on project lending to 40 percent of value of the project from 30 percent * Additional $2.67 billion in interest-free credit for low-income citizens facing difficulty obtaining loans ------------- INDONESIA: * Size: 73.3 trillion Indonesian rupiah ($6 billion), 1.3 percent of GDP * Timeframe: 2009 * Focus: Tax breaks, spending on infrastructure, other measures to support domestic demand/jobs * Rollout: In March following parliament approval * More to come? Not for now as current one just approved ------------------ TURKEY: * Size: 17 billion Turkish lira ($10.28 billion), 1.5 percent of GDP * Timeframe: 2009 * Focus: infrastructure investment, export subsidies, paying half of workers' salaries in firms with financing difficulty for up to six months to avert mass lay-offs * Rollout: parliament passed first 5.5 billion lira stimulus package end-February
(Reporting from Reuters bureaux in G20 countries, compiled by Brian Love)