$15 trillion and counting: global stimulus so far

LONDON (Reuters) - Central banks and governments have unveiled an estimated $15 trillion of stimulus already to shield their economies from the coronavirus pandemic - record sums that will swell balance sheets and deficits to peacetime highs.

FILE PHOTO: The Charging Bull or Wall Street Bull is pictured in the Manhattan borough of New York City, New York, U.S., January 16, 2019. REUTERS/Carlo Allegri

The sum equates to about 17% of an $87 trillion global economy last year.

Shaken by turmoil on financial markets in March, with their economies heading into freefall and a decade of job creation wiped out, policymakers have seized upon tool after tool to rescue their economies - including taboo policies such as cash handouts and buying ‘junk’ bonds.

The $15 trillion covers the “G10” group of major economies plus China, where total stimulus is harder to track.

In reaching that number, Reuters has included the increase in central bank balance sheets since the crisis erupted, new government cash injections and spending pledges, as well as about $7 trillion worth of quasi-fiscal loan and credit guarantees. Much of the latter may never be drawn upon, which would reduce the size of the fiscal stimulus.

Central banks will also buy more bonds, with some saying there is no cap on purchases, inflating the $15 trillion number between now and end-2020.

Below are a series of graphics detailing the splurge:


Central banks have slashed interest rates, with nearly all developed economies now with policy rates at or near zero.

Graphic: World central banks deliver rate cut bonanza -

But with rate-cutting running out of runway, central banks have aggressively scaled up money printing schemes first deployed in the aftermath of the 2009 financial crisis.

Assessing the scale of this stimulus can be tricky, as the rate at which central banks buy bonds to inject money into the system changes over time.

Morgan Stanley economists forecast that the G4 economies plus China will have increased their balance sheets by $13 trillion by end-2021, with the Federal Reserve and European Central Bank balance sheets topping 50% of GDP.

Graphic: Central bank balance sheets -

But to get to a number on stimulus deployed so far, Reuters has included only asset purchases already made, where this is known and with the latest available data.

Based on that, the biggest central banks have already expanded their balance sheets by an estimated $4 trillion, led by more than $2.4 trillion from the Fed between the end of February and April 22.

Graphic: G3 central bank balance sheets -

The rate of further bond-buying will likely accelerate too: the ECB and central banks in Japan, Britain and Australia will expand schemes as they see fit.

For an interactive version of the below graphic, click here

Graphic: Monetary stimulus by major central banks -


The budget firepower unleashed by the biggest economies is eye-popping. JP Morgan economists estimate that tax and spending policies will reach 2.7% of global GDP in 2020, bigger than the 2.3% seen in 2009.

The United States has pledged some $2.6 trillion of fiscal expenditure and its budget deficit is projected to hit around 20% of GDP or higher, with public debt as a percentage of GDP reaching levels last seen during the Second World War.

Even Germany with its dedication to balanced budgets is opening the taps.

The fiscal measures announced so far range from conventional health and welfare spending, to the United States handing out cash to individuals and Britain paying the wages of more than 6 million workers put on temporary leave.

Government responses also include quasi-fiscal measures such as loan guarantees - many economists point out that corporate loan guarantees will not turn into cash if there is no default.

The guarantees have been vast - according to Goldman Sachs estimates the United States could backstop as much as $4 trillion of credit, while in the euro zone the likes of Italy have pledged to guarantee hundreds of billions of euros.

For an interactive version of the below graphic, click here

Graphic: Fiscal firepower -

Reporting by Tommy Wilkes with additional reporting and graphics by Ritvik Carvalho; Editing by Mark Heinrich