How scared are governments about a recession?

18 March 2020 - 12:00 am UTC

Governments in almost every country affected by the COVID-19 pandemic have turned to fiscal spending to combat the economic contagion. Timing is being influenced by the global financial crisis and bespoke industrial packages for some infrastructure sectors look set to follow, reports Colin Leopold

Once upon a time, infrastructure investors in Europe used to wait on fiscal spending announcements for signs of a new building programme. Now they just want to avoid a recession.

After almost a decade of quantitative easing from central banks in the West and record low interest rates, governments have turned to new forms of economic stimulus in the face of the Coronavirus pandemic.

Over the past three weeks, spending packages have been dramatically increased by Italy, the UK and other countries globally. The US is reported to be establishing one of the largest federal emergency packages in history involving cheques in the post to American citizens. Government-backed loans and emergency funds have been among the tools seen elsewhere. In France, Finance Minister Bruno Le Maire has said nationalisation of major companies at risk might be an option

Bespoke industrial packages will be the next phase, according to sources in the infrastructure sector, with airlines, travel and toll road operators likely to be among the first in line.

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