Revenue Effects of COVID-19 - September 2020 Update

Abstract

COVID-19 has had a big negative impact on growth with the baseline forecast a 5.2% contraction in global GDP in 2020 according to the World Bank. This sharp fall in growth has placed pressure on government’s expenditures as well as revenues. Countries have further relaxed the revenue burden to support businesses and individuals. This paper tracks the actual fiscal situation of countries around the World and allows for better prediction of the fiscal outcomes further in the future and enables us to make better recommendations on alleviating the fiscal crisis due to COVID. This paper concludes that for most countries the deep reduction in tax revenues is showing signs of reversing trending to the 2019 levels by July-2020. Even while this reversal happens, the hole in the cumulative revenues for first seven months for the countries surveyed is very evident with the global average being 13% below levels of 2019. Further analysis of the expenditure trends which is forthcoming would give us a complete picture of the current fiscal situation of countries around the World.