The pace of restarting economic activities is heavily dependent on when countries can get the outbreak under control and whether widespread testing plus other measures to prevent a second wave of infection are effective. Intense research on vaccines is ongoing, but they are not expected to be available for at least another year or so.
SINGAPORE (Apr 30): There is no question that the Covid19 pandemic and resulting restriction on movements will inflict significant economic pain on businesses on a global scale. Most government aid packages are currently focused on helping to tide small and medium-sized enterprises (SMEs) over the short-term liquidity crunch. And rightly so, since these businesses are the backbone of most economies — developed and developing — accounting for a significant percentage of GDP and employment.
Large and listed companies have better access to capital markets and traditional bank financing, such as overdraft and revolving credit facilities. But they too are vulnerable, particularly if the slowdown in sales drags on over the coming months. And, even if loans are available, credit costs are rising for all but the highest-quality borrowers.
