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US Deficit Projected to Soar as Pandemic Wreaks Havoc Around World
The U.S. Congressional Budget Office said Friday that the economic hardship caused by the coronavirus in the United States would last through next year, as the pandemic wreaks havoc on the financial health of countries around the world.
The nonpartisan agency said the U.S. budget deficit would grow from $1 trillion to $3.7 trillion this year and said the unemployment rate would rise from 3.5% in February to 16% in September. It predicted that unemployment would fall after that time but would remain in double digits through 2021.
The report put pressure on the U.S. government as it tries to balance the concerns of the growing federal deficit with the approval of stimulus money meant to combat the outbreak's economic effects.
On Friday, U.S. President Donald Trump signed a $484 billion relief package to extend additional support for small-business loans and to help hospitals expand COVID-19 testing. The money is part of more than $3 trillion the U.S. government has spent to boost the economy.
G-20 calls for cooperation
Earlier Friday, the G-20 called on "all countries, international organizations, the private sector, philanthropic institutions and individuals" to contribute to its funding efforts to fight COVID-19, setting an $8 billion goal.
An international forum for the governments and central bank governors of 19 nations and the European Union said Friday that the G-20 already had raised $1.9 billion. Saudi Arabia, the current holder of the G-20 presidency, contributed $500 million.
"Global challenges demand global solutions, and this is our time to stand and support the race for a vaccine and other therapeutic measures to combat COVID-19," Saudi G-20 Sherpa Fahad Almubarak said.
"We commend the existing funding efforts from around the world and underscore the urgency to bridging the financing gap."
Some businesses reopen
The death toll from the coronavirus surpassed 50,000 in the United States on Friday. Despite the tally, several states took steps to reopen their economies, with Georgia and Oklahoma allowing salons, spas and barbershops to reopen. Some business owners said it was too early to open and that opening anyway could spark a new surge in coronavirus infections, despite facing financial collapse if they do not.
In Alaska, officials allowed dine-in restaurants to resume service along with allowing retail shops to again open their doors.
In Italy, health officials reported 420 deaths Friday, the lowest daily fatality rate since March 19. However, officials also reported a rise in new infections from 2,646 on Thursday to 3,021 new cases on Friday. Authorities say the country has passed the peak of its outbreak.
Vaccine trials offer hope
Britain said it had performed the first human trial of a coronavirus vaccine in Europe. Two volunteers were injected Thursday in the city of Oxford where a university team developed the vaccine in less than three months.
The United States conducted the first vaccine test in March in Seattle, Washington. Canada, Russia and other countries also are working on developing vaccines, but experts say even if a successful one is developed soon, manufacturing and distribution would take a year or longer.
The vaccine trials offered new hope just as an antiviral drug was reported ineffective against coronavirus in patients in China. In a randomized trial, remdesivir, a drug made by California-based Gilead Sciences, did not show any benefits for COVID-19 patients, and it failed to reduce the presence of the virus in their bloodstreams.
The U.S. Food and Drug Administration warned Friday that the malaria drug hydroxychloroquine could cause heart problems when used to treat COVID-19 and said further studies were needed. Trump had previously said the drug could be an effective "game changer" in treating the disease.
With no proven remedy for the coronavirus, health officials worldwide are recommending protective measures such as good hygiene practices, social distancing and use of masks and gloves. But people in many places are growing tired of restrictions, even as the number of cases grows.
Several European countries have seen a decrease in new cases and are preparing to gradually reopen businesses and ease restrictions.
As of Friday evening EDT, there were nearly 2.8 million cases of the virus worldwide and nearly 196,000 deaths, according to the Johns Hopkins Coronavirus Resource Center.
The coronavirus has had a devastating effect on the global economy, but the International Monetary Fund and other organizations warned that developing countries would be the worst hit.
The United Nations food agency projected that 265 million people could experience acute hunger this year, twice as many as last year. U.N. Secretary-General Antonio Guterres called on governments to ensure health care is available to all people and that economic aid packages help those most affected.
April 25, 2020 at 08:50AM
