Coronavirus: Asia-Pacific nations unleash massive stimulus measures as scope of Covid-19’s economic impact grows clear

From Singapore to Japan, governments are deploying billion-dollar rounds of fiscal stimulus to minimise economic pain for businesses and households

But analysts say these measures are not without their downsides, and the way they are implemented can also be controversial

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A Thai man uses his mobile phone in a deserted street in Bangkok after shopping centres were closed to prevent the spread of Covid-19. Photo: EPA

Published: 8:00am, 8 Apr 2020Updated: 8:00am, 8 Apr 2020

Asia-Pacific economic policymakers who chose to keep their powder dry in the early days of the Covid-19 pandemic have begun unleashing massive new rounds of fiscal stimulus as the full scope of the global health crisis’ financial impact becomes apparent.

With the fresh injections, spending boosts by the likes of Japan, Malaysia, Singapore and Thailand are now almost on equal footing – when compared to their respective gross domestic product (GDP) – as the so-called fiscal bazookas deployed by the United States and the European Union.

Asia-based economic watchers said while they welcomed the new economic measures, their hope was for regional governments to continue to view the public health crisis, and not the economy, as the biggest priority.

Rajiv Biswas, chief Asia-Pacific economist at IHS Markit, said any amount of fiscal injections, liquidity boosts or interest rate cuts would not have as much impact as successfully containing the outbreak.

“Even with stimulus it’s really just about trying to keep the economy on hold, if you like, and mitigating the negative shock,” Biswas said. “You cannot offset the impact of escalating cases firstly of people being afraid to go out … and secondly of governments putting lockdowns in place.

“The bottom line of fiscal or monetary stimulus is that these are band-aids … the real recovery has to be linked to containing the number of cases until the caseload is very low.”

Workers load food onto a traditional boat at Sunda Kelapa port in Jakarta, Indonesia. Photo: EPA