Macroeconomic & Geopolitical

You’re Gonna Need a Bigger Stimulus

April 2020 – 3 min read
Worse-than-expected U.S. retail sales suggest a large drop in consumer spending, the IMF projects global growth will fall 3% in 2020, and people around the world are beginning to receive their stimulus checks—and it's already not enough.


Arrows indicate consensus forecast compared to the previous period. Local dates of release.


  • Initial jobless claims have likely peaked, but the labor market remains a dire situation. Small business loans are being accepted, but many still lack cash and the small-business loan fund is dry. More jobs will be lost without additional funding.


  • The EU video summit on April 23 will include four COVID-19 initiatives: pan-EU unemployment benefits; the EU Investment Bank’s loan guarantee program; a new ESM credit line for health care; and financing a Recovery Fund. The first two items are considered agreed, while the other two are still controversial.

Asia Pacific

  • The PBOC will likely ease more. The one-year MLF rate drop suggests further reduction in the corporate loan reference rate. Weak inflation data emphasizes demand remains meager, adding pressure for more support from the PBOC.
  • Further fiscal and monetary stimulus measures are expected in Japan, including Prime Minister Shinzo Abe’s plan to give $1,000 to every person. An earlier plan would have restricted payments to struggling households.

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Christopher Smart, PhD, CFA

Chief Global Strategist & Head of the Barings Investment Institute

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