(Reuters) - Governments across much of the world are rolling out fiscal stimulus packages in the hope the public funds will boost demand, limit job losses and prevent a deeper downturn.
Heading into an April 2 summit of G20 leaders, Washington is pressing for a bigger effort from other countries but mainland Europe says it has done enough for now, exposing a rift that makes it hard to produce a convincing message of unity on the day.
International Monetary Fund officials say that discretionary fiscal stimulus so far amounts to around 1.8 percent of GDP for 2009 and 1.3 percent in 2010 at G20 level, short of the annual two percent that the IMF would like to see.
U.S. discretionary stimulus amounts to 2.0 percent of GDP in 2009, double the combined 1.0 percent discretionary stimulus of the four biggest European economies (Germany, Britain, France and Italy), according to IMF estimates which put China’s stimulus at 3.2 percent of GDP this year and Japan’s at 1.4 percent.
The estimated impact is an aggregate G20 gain of anywhere between 0.4 and 1.3 percentage points of GDP in 2009, and 0.1-0.2 percent in 2010, though the impact of total fiscal expansion (including so-called automatic stabilisers) is 0.8-3.2 percent in 2010 and 0.1-0.9 in 2010.
Below is a updated guide to fiscal stimulus programs 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 stabilizers play a larger role alongside discretionary spending.
* 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 programs
* 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.
* Size: 4 trillion yuan ($586 billion), or 13.3 percent of 2008
* 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.
* Size: 12 trillion yen ($122 billion) in three stimulus packages, 2 percent of GDP
* Timeframe: current and next fiscal year, up to March 2010
* Focus: payouts to individuals to boost consumption, job-support measures, tax breaks for housing mortgages
* Rollout: began October 2008, second, third packages being rolled out this month though some spending still pending formal parliament approval of state budget
* More to come? Government seeking new stimulus measures with some ruling party lawmakers calling for spending of further 20-30 trillion yen.
* 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 program 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
* 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)
* More to come? Yes, more expected in April budget
* 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 hardhit companies and already used in part for car parts manufacturer Valeo
* More to come? Open question. Opposition calling for consumption stimulus. Economy Minister Christine Lagarde says important to work on existing package before working on a new plan
* Size: circa 7.0 billion euros ($10 billion), 0.4 percent of
* 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 skeptical of large stimulus programs. 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
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