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