This section provides more detail on the scale and content of public expenditure responses to the COVID-19 pandemic. Governments made a range of exceptional expenditures to address the urgent needs that arose from COVID-19. Additional and unplanned expenditures were needed to fund the extra equipment and capacity needed to mount a medical response. In addition, lockdowns required many business activities that required person-to-person contact (e.g. manufacturing, and in-person purchases of goods and services) to close to limit the spread of the virus. Public expenditures helped to directly support households and businesses that had lost income as a result. Many governments also cut taxes and other charges in order to provide economic support, resulting in revenue foregone. This special section provides additional details on these responses in SEA countries. This section captures the fiscal response through the earlier stages of the pandemic (via detailed data for 2020 and 2021), but not continuing support in the later stages (2022 and 2023), as data is not easily available.
Among SEA countries for which data are available, on-budget measures announced to support the COVID‑19 response as of October 2021 averaged 9.7% of GDP (Figure 2.18). This ranged from 1.8% of GDP in Viet Nam to 18.3% of GDP in Singapore. In most cases, expenditure on non-health measures (e.g. income support for workers whose businesses were closed due to lockdowns) was significantly larger than that on health. For example, in Indonesia, 2% of GDP was directed to the health response, and 7.3% to non-health responses. Similar patterns were seen in OECD Member countries in Asia. These additional spending measures directly contributed to the sharp increase in public spending in the region. In addition, many governments also responded through “liquidity support” measures such as loan guarantees or non-commercial activity by public corporations on behalf of the government. Liquidity support measures do not alter public revenues or expenditures and are not graphed. However, they may create liabilities that affect public finances in the future.
All governments in the SEA region provided some form of income support to households during the COVID‑19 pandemic (Figure 2.19). The average number of days of direct economic support to households in the SEA region was 669 days. This was slightly lower than the OECD average of 735 days. It is estimated that more than two-thirds of the workforce in SEA countries for which data are available is employed in the informal sector (ILO, 2024). Singapore and Malaysia provided 1 005 and 979 days of income support to all workers, in both the informal and formal sectors (Figure 2.20). Some other SEA countries provided financial aid principally to workers in the formal sector, including Brunei Darussalam, Cambodia, Indonesia and Lao PDR. The allocation of direct economic support to workers in the formal and informal sectors is similar between the SEA region and OECD countries. Both SEA countries and OECD countries, at times, limited economic support to workers inside the formal economy. On average, SEA countries offered 406 days of support to all workers, while OECD countries provided about 456 days. Similarly, OECD countries provided, on average, 279 days of support limited to workers in the formal sector, compared to the SEA average of 263 days of support.
