COVID-19 Healthcare and Fiscal Response in Emerging Markets

On the eve of 2020, the usual time for drawing conclusions and making forecasts, the world was bracing for а continued economic slowdown, for a rise of protectionism amid the US-China trade tensions and for the opportunities and traps of the expanding digital economy. Little did the pundits expect that the next big economic downturn was only a quarter away. In Q2 2020 many economies (developed and emerging) are already reporting their worst contractions on record, at double-digit rates.  

The new coronavirus (SARS-CoV-2) causing the COV-ID-19 disease prompted governments to put whole cities into strict lockdown, like Wuhan, the capital of the Chinese Hubei province. Soon after, Italy and France followed suit, imposing harsh nation-wide stay-at-home orders. The initial comparisons with the SARS outbreak in 2003 and the MERS one in 2012 were soon rendered obsolete, as the novel coronavirus cases were growing exponentially worldwide.   

As of mid-August, there were over 22mn total infections and over 770,000 COVID-19 related deaths worldwide. On a positive note, the number of recoveries keeps growing too, with more than 14.8mn people recovered. The notorious top three with the most cases globally includes the US, Brazil and India, followed by many more emerging markets.  

Emerging markets were faced with specific issues long before the COVID-19 pandemic, such as sustained economic slowdown, structural and demographic problems. China, for example, was making an effort to strike a balance in its shift towards a slower, but more sustainable economic growth. All these challenges did not disappear with the onset of the current crisis, on the contrary, they will become more pronounced.