In Brief
2 Minute Read

Government Aid: The Economic Antidote to COVID-19?

June 3, 2020


THE STORY

Measures to control the spread of the novel coronavirus (COVID-19) are forcing thousands of businesses to close their doors. Effects on the world economy have been devastating. In April 2020, the International Monetary Fund warned that business closures and lockdowns would throw the world into the deepest recession since the Great Depression.

In the euro zone, the economy has shrunk at a record-high pace during the first three months of 2020. In April, U.S. unemployment level hit 14.7 percent, its worst point in almost a century. Meanwhile, in Japan, the number of business bankruptcies was rising.

For governments, COVID-19 is a two-tiered challenge: conquer the virus’s health threat while combating the ensuing economic damage. The result involves numerous government measures to provide temporary support to businesses and citizens.

“We’re seeing more state and federal governments apply lessons learned from the financial crisis,” says Joe Monaghan, chief executive officer of public sector partnership at Aon. “Even beyond short-term stimulus planning in the pandemic, they’re using data and analytics to weigh longer-term risks: understanding their sources of revenue and deciding the best ways to protect them, including partnerships with the private sector.”

WHY IT MATTERS

Here is a look at what a few of the world’s governments are doing to help offset the negative economic impacts of COVID-19.

Preserving Both Physical And Economic Health

The world after COVID-19 will be very different from the one before the outbreak, and much is still unknown. “While there isn’t a one-size-fits-all approach across economies, the road to recovery will require innovative thinking and likely lead to even more collaboration across both the public and private sector to emerge from this more resilient than before,” says Monaghan.


This document has been provided as an informational resource for Aon clients and business partners. It is intended to provide general guidance on potential exposures and is not intended to provide medical advice or address medical concerns or specific risk circumstances. Information given in this document is of a general nature, and Aon cannot be held liable for the guidance provided. We strongly encourage readers to seek additional safety, medical and epidemiological information from credible sources such as the World Health Organization. As regards insurance coverage questions, whether coverage applies or a policy will respond to any risk or circumstance is subject to the specific terms and conditions of the insurance policies and contracts at issue and the relevant underwriter determinations.

While care has been taken in the production of this document, and the information contained within it has been obtained from sources that Aon believes to be reliable, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the report or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication.