In focus

Which countries’ finances will suffer the worst long-term scarring from COVID-19?

During 2020, most governments have been forced to restrict domestic life, and with that, economic activity. They have been forced to borrow eye-watering amounts to support households and firms as restrictions on activity were imposed. Most of the borrowing was due to expansionary fiscal policy, but a significant amount was down to lost revenues too. Though most countries have tried to use temporary spending increases and tax cuts, most will need to use austerity to reduce annual borrowing, and stabilize their growing debt positions. Interestingly, not all countries are expected to complete their austerity programs by 2025. We take a look at which countries face the worst scarring from COVID-19.

The views and opinions contained herein are those of Schroders’ investment teams and/or Economics Group, and do not necessarily represent Schroder Investment Management North America Inc.’s house views. These views are subject to change. This information is intended to be for information purposes only and it is not intended as promotional material in any respect.