The COVID-19 outbreak has widened considerably since the last update, and is now official a pandemic in the eyes of the World Health Organization. According to data compiled by John Hopkins University, countries with the largest outbreaks are as follows: China (80,967 cases), Italy (10,149), Iran (9,000), South Korea (7,755), Spain (2,026), France (1,784), and Germany (1,622). China, where the COVID-19 outbreak originated, has seen a steep drop in new cases, prompting President Xi Jinping to visit Wuhan and declare victory in the fight against the virus. According to the same data set, the United States has 1,039 cases; however, testing problems are fueling concerns that the real number could be significantly higher.

COVID-19 is having a detrimental impact on economic activity the world over, ranging from cancelled overseas trips to total in-house lockdowns, and these demand-side effects will only worsen in the short-term. Here are some of the significant economic developments from the past week:

• The temperament of US equity markets has been see-sawing between panic and elation of late, with panic being the current order of the day. The Dow is off by 5.13% at time of writing and down around 20% from its recent high, which puts it in bear market territory. The prospect of new stimulus measures, such as a payroll tax holiday through 2020, has buoyed markets at times, but a tangible program has yet to be tabled by the Trump administration. It stands to reason that bearish sentiment will deepen as the true extent of the United States’ case load becomes apparent.
• The stimulus taps have been turned on in the United Kingdom, where Chancellor Rishi Sunak announced a £30 billion fiscal stimulus package to counter the outbreak. The country just recorded 460 new cases, its largest daily increase yet. The package includes sick pay for up to 14 days for employees of small- and medium-sized businesses; £5 billion in emergency funding for the national health services with the promise of more to come if required – ‘whatever it takes, whatever it costs’; 500£ in funding for vulnerable people; and tax breaks for small businesses in the hardest-hit sectors. Sunak’s announcement came on the heels of a Bank of England interest rate cut of 50 basis points.
• The EU has vowed to spend up to €25bn to fight the COVID-19 outbreak – €7.5bn of which will come from the Commission budget. However, most of this funding will go toward the purchase of emergency medical equipment and other direct response initiatives such as joint funding for vaccine research. A coordinated fiscal response from the bloc remains elusive, and that’s because embarking on one would risk opening two Pandora’s Boxes: 1) the prospect of fiscal equalization payments within the bloc (in all but name); and 2) scrapping the ‘black zero’ rule of no deficit spending in Germany (which was already under increasing pressure as the country headed toward recession pre-COVID).
• The Canadian government has announced a $1bn in funding to fight the COVID-19 outbreak. The money will go toward medical supplies, vaccine research, and waiving the waiting period for people to receive unemployment insurance. The government further indicated that additional income support for those who are not eligible for EI would also be forthcoming.