Deloitte Economics’ Coronavirus Impact Monitor · Note: 1) Spending data is based on...

Deloitte Economics’ Coronavirus Impact Monitor“Emerging worries about the risk of an asset price correction”11th edition, 26 June 2020

Coronavirus Impact Monitor – 26 June 2020 Deloitte Economics © 2020Page 2

• The number of daily new cases in the world continues to rise

rapidly. This appears to be driven by emerging market

countries like Brazil and India where the outbreak seems to

be accelerating.

• While the virus appears to be broadly under control in

Europe, localised outbreaks continue. For instance, Portugal

recently imposed new restrictions to limit the extent of a new

wave of infections in the country.

• In the United States, the number of cases has started to

increase rapidly again, this time concentrated in the

southern and western parts of the country as opposed to the

east coast. The number of daily new cases is approaching

30,000.

• At global level, daily deaths are increasing again by around

4,500-5,000 daily deaths.

• While the number of daily deaths in the United States has

been falling, it remains to be seen whether deaths will pick up

again after the spike in new daily cases given the ~two-week

incubation period.

• The number of daily deaths in Denmark (around one per day)

also points to the virus being under control, as society

continues to open up.

Sources: World Health Organisation (WHO) as of 24 June 2020

Coronavirus outbreak

While the virus appears to be broadly under control in Europe, the United States is experiencing a rapid increase in the number of cases

# n

ew d

aily

co

nfi

rmed

cas

es

7-day rolling average new daily confirmed COVID-19 cases

7-day rolling average daily confirmed COVID-19 deaths

# n

ew d

aily

dea

ths

World US

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

1 Mar 1 May1 Apr 1 Jun 1 Jul

0

500

1,000

1,500

2,000

2,500

3,000

1 Mar 1 Apr 1 Jun1 May 1 Jul

0

2

4

6

8

10

12

14

16

1 Mar 1 Apr 1 May 1 Jun 1 Jul

Denmark

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000


0

50

100

150

200

250

300

350

1 May 1 Jun1 Mar 1 Apr 1 Jul

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000


World US Denmark


Note:

Source:

1) Refinitiv European sectoral price indices measured by Refinitiv (Thomson Reuters)

Thomson Reuters Eikon

Impact on financial markets

COVID-19 impact on equity markets continues to affect the transport, energy and financial sectors, while the medical & pharmaceuticals and technology sectors have recovered

• European equity indices suffered material losses following the

COVID-19 outbreak in Europe, with all sectors having bounced

back by various degrees since the bottom reached in mid-March

2020.

• The Transport industry, including airlines, was badly affected by

the virus and the related travel restrictions, and while it has

recovered somewhat, the Refinitiv Europe Transport Price Index

is still down by some 31% since the beginning of the year.

• The European energy sector, including oil and gas companies,

has lost more than 35% since the beginning of the year.

Declining energy prices have applied downward pressure on

energy equities. After regaining some ground at the beginning

of June 2020, share prices have fallen back again over the past

couple of weeks.

• In its June Global Financial Stability Report, IMF takes note of a

divergence between the pricing of risk in financial markets and

economic prospects, as investors apparently are betting on

continued and unprecedented support by central banks. This

disconnect between markets and the real economy raises the

risk of another correction in asset prices.

• Interest rates have risen since their lowest levels at the

beginning of March 2020 on the news of large fiscal and

monetary stimulus packages by governments and central banks

around the world.

• Equity market volatility and implied default probabilities remain

elevated, although they have also decreased since their peak.

See page 27 for more details.

30 Dec 9 Mar40

13 Jan 27 Jan 10 Feb

50

24 Feb 23 Mar 6 Apr 20 Apr 4 May 18 May

110

1 Jun 15 Jun

60

100

70

80

90

29 Jun

Equity markets: Sectoral indices in Europe1

Sect

ora

l in

dic

es

(2 J

an 2

02

0 =

10

0)

Major outbreak in Europe

Transport Energy Medical & Pharmaceuticals Financial Technology

30 Dec 2019

0.0

(0.4)

0.2

(0.3)

(0.2)

(0.1)

0.1

0.3

0.4

30 Dec 13 Jan 27 Jan 10 Feb 24 Feb 9 Mar 23 Mar 6 Apr 20 Apr 4 May 18 May 1 Jun 15 Jun 29 Jun

10 Year DK swap rate 6 month CIBOR

30 Dec 2019

Danish interest rates

Rat

es, %

https://www.imf.org/~/media/Files/Publications/GFSR/2020/Update/June/English/GFSRENG2020006.ashx?la=en


Daily new cases per 1m capita Daily deaths per 10m capita Stringency index

• Governments’ responses to the COVID-19 outbreak have varied across the

world. Gauging the effectiveness of governments’ responses is a very

complex exercise. However, based on simple data measures, we draw up

some preliminary observations below. The observations focus on the direct

impact on COVID-19 infection rates and deaths; economic/social costs are

not accounted for.

• In Denmark, the government responded quickly in the sense that the

stringency index peaked within 21 days. The response was not too harsh,

as the stringency measure peaked at a level of 72. The Danish response

appears to be relatively effective, as the number of new daily cases/deaths

was not particularly high in an international context.

• New Zealand appears to have had a very fast and extreme response. The

fallout appears very low. Based on these simple measures, the approach

adopted by the New Zealand government appear very effective.

• The response by the US government was slower. The number of daily new

cases and daily deaths was higher than that of Denmark and New Zealand.

• In Sweden, the response was slower and less stringent. The number daily

new cases and daily deaths was also higher than that of Denmark and New

Zealand.

• From this perspective, the US/Swedish government response to COVID-19

appears to have been less effective in dampening the outbreak. It remains

an open question, though, as to how effective the Danish/New Zealand/

US/Swedish response was in the light of the associated economic and

social consequences.

Source: World Health Organisation (WHO), University of Oxford Coronavirus Government Response Tracker, World Bank

Effectiveness of government responses

Preliminary observations on effectiveness of governments’ responses to COVID-19

57

72

28

0

10

20

30

40

50

60

70

80

90

100

0

20

40

60

80

100

120

1 Jan 1 Apr1 Feb 1 Mar 1 May 1 Jun 1 Jul

14

96

3

0

10

20

30

40

50

60

70

80

90

100

0

20

40

60

80

100

120

1 Apr1 Mar1 Feb 1 May1 Jan 1 Jul1 Jun

96

73

84

0

10

20

30

40

50

60

70

80

90

100

0

20

40

60

80

100

120

1 Feb1 Jan 1 Apr1 Mar 1 May 1 Jun 1 Jul

109

46

106

0

20

40

60

80

100

120

0

20

40

60

80

100

120

1 Feb1 Jan 1 Jul1 Mar 1 Apr 1 May 1 Jun

7-day rolling average new cases per capita vs stringency index1

Denmark New Zealand

US Sweden

New

dai

ly c

ases

per

1m

cap

ita

and

dai

ly d

eath

s p

er 1

0m

(lef

t ax

is)

Go

vernm

ent resp

on

se stringen

cy ind

ex (right axis)

Time between first case and maximum stringency index

~62 days

~65 days

28 days

~21 days

Note: 1) The index is a composite measure based on nine response indicators, including school closures, workplace closures, and travel bans, rescaled to a value from 0 to 100 (100 = strictest response).

Maximum points on lines shown by markers


Sources: Thomson Reuters Eikon, Statistics Denmark

Danish consumer confidence and employment

The number of employed people declined by 73 thousand from March to April 2020

• The Danish consumer confidence index has improved markedly in June

2020, increasing from -8.8 to -3.1. Almost all of the sub-indices, on which

the consumer confidence index is based on, improved.

• The improvement in consumer confidence is an indication that the

contraction in the Danish economy appears to be moderating.

Danish consumer confidence and YoY consumer spending growth

(8%)

(6%)

(4%)

(2%)

-

2%

4%

6%

8%

-20

-15

-10

-5

0

5

10

15

20

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Co

nsu

me

r spend

ing, chan

ge YoY

Co

nsu

me

r co

nfid

ence

, in

dex

Danish consumer spending, change YoY (RHS) Danish consumer confidence

Danish employment and implied employment without wage compensation

2,710

2,804

2,569

2,784

2,500

2,600

2,700

2,800

2,900

Dec 2017 Apr 2018 Aug 2018 Dec 2018 Apr 2019 Aug 2019 Dec 2019 Apr 2020

Emp

loym

en

t (0

00s

)

Danish employment (000s) Employment less workers on wage compensation

• Danish employment showed that the number of employed people fell by

2.6% from 2.78 million in March 2020 to 2.71 in April 2020.

• The Danish government introduced a temporary wage compensation

scheme, whereby the state pays 75% of the employee’s salary (max.

DKK 30,000).

• The chart shows that if the people on wage compensation scheme had

been laid off, as opposed to keeping their job, then obviously the

employment decline would have been much sharper.

• It remains an open question as to how many of the people, currently on

the wage compensation scheme, will be laid off when the scheme is

scheduled to terminate on 29 August 2020.


Note: 1) Spending data is based on transactions, both domestically and abroad, with cards and MobilePay in stores for around 1 million Danske Bank Danish personal customers. Excludes cash payments

and bank transfers. The charts show spending in 2020 compared with the same days in 2019 to correct for different spending patterns across the week. Source: Danske Bank

Private spending

Danish spending continues to recover towards more normal levels

• Based on cards and MobilePay for

around 1 million Danske Bank

personal customers, the latest

spending data from Danske Bank

shows signs that spending continues

to recover towards normal levels.

• Compared with late March 2020,

when total spending was down by

20%, spending has recovered to the

same nominal compared with last

year. However, we note that cash

usage is likely down and spending on

cars is also down. Consequently, it is

estimated that overall spending

remains below normal levels.

• Travel spending appears to be

improving. Spending at Airlines and

Hotels & motels has been picking up,

in line with lifting of restrictions.

• Spending at restaurants has been

picking up since mid-May 2020 in line

with the opening of the Danish

economy.

• We also note that spending at

electronics stores and grocery stores

appears to be above index 100.

50

60

70

80

90

100

110

120

130

140

150

160

30 Apr25 Mar16 Mar27 Feb 21 Apr7 Mar 3 Apr 12 Apr 9 May 18 May 27 May 5 Jun 14 Jun 23 Jun

Total 7-day moving average Index=100=100

Spending in Denmark with card and MobilePay (2020 versus 2019)1

Index

(100=

sam

e w

eekday in 2

019)

0

20

40

60

80

100

120

140

160

180

200

220

27 May7 Mar 16 Mar 3 Apr25 Mar 12 Apr 21 Apr 30 Apr 9 May 18 May 5 Jun 14 Jun 23 Jun

Clothing stores

Airlines Hotels & motelsElectronics stores

Grocery stores Restaurants

Index=100

Private spending on select sectors (2020 versus 2019)1

Index

(100=

sam

e w

eekday in 2

019)

Note, we have hidden some areas of the chart as the data is skewed by timing effects and is not representative


Note:

Source:

Labels shown in the charts represent average forecast. GDP forecasts as of June 2020, with the exception of IMF’s forecast for Denmark which was made as of April 2020.

IMF, OECD, World Bank

GDP forecasts

The IMF, OECD and the World Bank have now all released a June update on their GDP predictions for 2020 and 2021 – global GDP expected to fall by some 5.4% in 2020

• Since our last update, the IMF has released their latest growth projections for World and Eurozone. They now expect global growth to slow by 4.9% in 2020, compared

with their previous April prediction of a 3% fall.

• The OECD and the World Bank forecasts are broadly consistent with those from the IMF in the sense that they paint a picture of a sharp downturn in 2020, followed by a

recovery in 2021. The contractions of the economy is primarily due to major drops in Q1 and partly in Q2 2020. From Q3, economic activity is expected to increase

continuously. However, economy activity is not expected to be back on Q4 2019 levels within the next two years for Advanced economies.

• Please note that these forecasts assume that current containment efforts are effective in containing the COVID-19 outbreak. In case we get a second wave of infections

before the end of 2020, and the authorities impose a new round of lockdowns, the downturn is obviously going to be deeper, and recovery in 2021 is therefore likely to be

more moderate.

2.4%

(6.2%)

4.9%

(8%)

(6%)

(4%)

(2%)

-

2%

4%

6%

8%

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

Denmark: GDP growth

Historical (IMF) Avg. forecastIMF OECD

1.2%

(9.8%)

5.2%

(12%)

(10%)

(8%)

(6%)

(4%)

(2%)

-

2%

4%

6%

8%

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

Eurozone: GDP growth

Historical (IMF) Avg. forecast

IMF OECD

World Bank

2.9%

(5.4%)

4.9%

(8%)

(6%)

(4%)

(2%)

-

2%

4%

6%

8%

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

World: GDP growth

Historical (IMF) Avg. forecast

IMF OECD

World Bank


Consumer• Decline across all consumer indexes while intended spend remains low.Energy & Resources• Coronavirus still affects short-term prices, but positive trends are appearing.

Financial Services• Valuation recovery from the mid-March low point continues, albeit

uncertainty remains.

Industrials• PMI numbers surge to four-month high levels with sector expansion in the

United Kingdom and France.

Life Science & Health Care (LSHC)• Swift recovery of the LSHC sector with listed companies trading above pre-

corona levels.

Real Estate• Expectation-driven real estate market leads to price reductions in the short

term.Technology, Media & Telco (TMT)• TMT sectors have been relatively resilient to COVID-19, as the world has

gone digital.Transport• The transportation market in recovery following the opening of several

markets.

Public• The pandemic has been costly and may affect public spending in the long

term.

We refer to pages 11-19 for in-depth coverage of developments in the industries above. Variations in the outlook within industries may occur.

Coronavirus heatmap

Deloitte Economics’ view on the short-term outlook across selected sectors in Denmark

Sources: Deloitte analysis, Dansk Erhverv

Sector

Denmark

Short term Outlook

Financial Services Moderate impact Moderate recovery

Consumer Moderate recoveryModerate impact

Transport Moderate impact Slow recovery

Technology,

Media & TelcoNeutral/low impact Moderate recovery

Real Estate Moderate impact Moderate recovery

Energy & Resources Moderate impact Moderate recovery

Life Science & Health

Care Neutral/low impact Growth opportunities

Industrials Moderate impact Moderate recovery


Key messages

Divergence between the pricing of risk in financial markets and economic prospects

• In Denmark and Europe in general, the virus appears to be broadly under control. However, the number of daily new cases in the World continues to rise rapidly. This

appears to be driven by emerging market countries like Brazil and India, but also the US experience a rapid increase in the number of confirmed cases.

• The COVID-19 crisis has caused dramatic supply and demand shocks in the world economy, and these shocks are inevitably causing major disruptions to trade. The COVID-

19 impact on equity markets has been most severe on the transport and energy sectors.

• An apparent disconnect between markets and the real economy raises the risk of another correction in asset prices.

• The IMF, OECD and World Bank have all released a June update on their GDP prediction for 2020 and 2021. Global GDP expected to fall by some 5.4% in 2020 with a

recovery in 2021.

• Governments’ response to the COVID-19 outbreak have varied across the world. An analysis indicates that the US/Swedish government response to COVID-19 appears to

have been less effective in dampening the outbreak compared to for instance Denmark, where the government responded quickly measured on a stringency index. It

remains an open question, though, as to how effective the Danish/US/Swedish response was in light of the associated economic and social consequences.

• The Danish consumer confidence index improved markedly in June, increasing from -8.8 to -3.1. The improvement in consumer confidence is an indication that the

contraction in the Danish economy appears to be moderating. This is also supported by consumer spending data that continues to recover towards more normal levels.

• The number of employed people in Denmark declined by 73 thousand from March to April. Without the wage compensations packages the decline would, however, have

been larger.

• Deloitte Economics will continue monitoring the impact of the coronavirus in Denmark and globally. Find our updates here

Disclaimer: The information in this document is intended for knowledge sharing only.

For questions on the contents of this report, please contact:

Majbritt Skov

Partner, Head of Deloitte Economics

Mobile: +45 30 93 54 71

[email protected]

Peter Lildholdt

Vice President

Mobile: +45 40 35 25 36

[email protected]

Tinus Bang Christensen

Partner

Mobile: +45 30 93 44 63

[email protected]

https://www2.deloitte.com/dk/da/pages/covid-19/covid-19-oekonomisk-udsyn.html


Industry outlook

Consumer

Energy & Resources

Financial Services

Life Science & Health Care

Public

Technology, Media & Telco (TMT)

Transport

Industrials

Real Estate

Page 11

Page 12

Page 13

Page 14

Page 15

Page 16

Page 17

Page 19

Page 18

Deloitte Financial Advisory industry contacts Page 20


60.0

65.0

70.0

75.0

80.0

85.0

90.0

95.0

100.0

105.0

110.0

24 Dec 19 24 Jan 20 24 Feb 20 24 Mar 20 24 Apr 20 24 May 20 24 Jun 20

Retail Hospitality Consumer MSCI World

Consumers will spend less on restaurants, apparel and electronics. However,

restaurant/takeout spending indicates a positive development since last update

Consumers’ intention to spend more during the next four weeks

Consumers’ intended purchase channel

Note:

Sources:

1) MSCI World Retailing Index; 2) MSCI World Consumer Services Index; 3) MSCI Consumer Staples Index; 4) Based on OECD – Europe region

Capital IQ; MSCI; European Parliament; Deloitte State of the Consumer Tracker

Industry outlook: Consumer

Decline across all consumer indexes while intended spend remains low

Retail index has moved from index 102.1 to 100.6 (since last update).

Hospitality index has moved from index 83.9 to 78.5 (since last update).

Consumer index has moved from index 91.9 to 88.6 (since last update).

Highlights from the industry (as of 24 June 2020)

Trading multiples and economic outlook

11.9x 13.3x 14.2x

10y avg. 3y avg.5y avg.

Index: MSCI World Retailing Index (top 10 companies)

17.0x14.0x

CurrentJan 1, 2020

-3.0x

Historical averages

(EV/FY0 EBITDA)

Coronavirus impact

(EV/FY0 EBITDA)

Latest consumer confidence index4 (as of April 2020) was 98.02, indicating a

somewhat doubtful attitude towards the future economic development,

possibly resulting in higher savings and less consumption among consumers.

Based on top 10

companies

1 2 3

Indexed s

hare

price

98.0

95

98

101

Apr-06 Apr-08 Apr-10 Apr-12 Apr-14 Apr-16 Apr-18 Apr-20

Consumer confidence index (OECD-Europe)

AlcoholRestaurant/

takeoutMedicines

Household

goodsGroceriesElectronicsBooks

Apparel/

footwear

15%

25%

15%16%

69%

34%

38%

28%

47% 17%

28%

27%

29%39%

29%

33%

14%18%

67%

17%20%

63% 68%44%

Online/delivered Mixed In-store

-12% -9%11%20%26%-13%-6%-10%

100.6

92.4

88.6

78.5

Consumer Financial Services

Energy & Resources


Public TMT TransportIndustrials Real Estate


Hydropower generation

− Prior to Corona, electricity prices were already pressured in the Nordics due to

a warm winter, which increased the generation capacity of Norwegian

hydropower plants.

− Further, the mild winter decreased demand for electricity.

Lockdown affected demand

− The corona virus lockdown negatively affected demand for both public

institutions, private individuals and corporations.

Carbon market prices

− Lower emission of CO2 and other greenhouse gasses led to a decrease in

carbon prices.

− Coal became cheaper, lowering overall prices, as coal was marginally price

setting. This created a self-enforcing effect, which drove down prices even

further.

Source: Thomson Reuters Eikon

Industry outlook: Energy & Resources

Coronavirus still affects short-term prices, but positive trends are appearing

Mild winter put pressure on Nordic electricity prices prior to Corona crisis.

Electricity demand decreased marginally due to Coronavirus lockdown.

Significant drop in carbon emissions resulting in lower prices.


As expected, prices are starting to increase, as lockdowns are gradually lifted

globally. Nordic power had a short rally for a few weeks, while coal and gas are not

trending upwards.

The short-term impact on electricity producers has been significant, but we expect

prices to rebound in 2021. Short-term prices are still negatively affected, but long-

term prices show positive trends, and the carbon market is returning to pre-crisis

levels.

Economic outlook

1 Jan 20 1 Apr 201 Feb 20 1 Mar 20 1 May 20 1 Jun 20 1 Jul 20

50

20

30

70

40

60

80

90

100

110

Natural gas TTF, spot Coal API2, spot Nordic electricity future, Q3-20

Selected futures

2635 33

2511

23 26 25

Nordic power, Q3-20 Nordic power, FY-21Nordic power, Q4-20 EUA, Jun-20

-55.7%-34.4% -21.2% +3.7%

Jan 1, 2020 Jun 25, 2020


Energy & Resources




Banks and consumer finance

− Credit businesses that retain a large physical branch network or have IT inefficiencies will find a drag on their cost bases. This is at a time when they must work through increased loan loss provisions amplified by the adoption of IFRS9 accounting standard in 2018. A higher cost base juxtaposed against a continued low base rate environment and an inability to generate high levels of net interest margin. Inefficient or subscale players may need to look for new capital or become part of a wider market consolidation.

Insurance

− Lloyds of London estimates a USD 203bn underwriting loss for the insurance industry as a result of the global pandemic. Obviously, some asset classes will fair better than others (e.g., motor insurance will benefit from lockdown versus business interruption insurance). As such, dependent on products and attitudes to reinsurance, there may be stress in the insurance industry.

Asset Management

− A Deloitte study demonstrates that consumers expect to spend more on Wealth Management services as a response to the COVID-19 crisis (click here to read the study). Asset managers that have been successfully able to pivot from physical meetings to conduct sales and provide advice virtually may be able to capture market shares. However, the shock to equity markets will negatively affect income across the sector.

1) Indices are from Stoxx Europe 600 Financial Services and MSCI World; 2) DCA: Debt Collection Agencies; 3) P/BV is measured as average of Nordic Insurers, banks, and DCA.

A. https://www.theguardian.com/business/2020/may/14/lloyds-of-london-coronavirus-payouts

Industry outlook: Financial Services

Valuation recovery from the mid-March low point continues, albeit uncertainty remains

Certain FS subsectors, including Nordic banks and asset managers, have recovered a significant portion of market value from the mid-March low point. Uncertainty, particularly in consumer finance, and debt collection businesses continue to be priced into valuations, although recently gains have been made.Furthermore, uncertainty about the United Kingdom’s withdrawal from the EU, which has been affected by COVD-19, continues to weigh on valuation.


The impact of the COVID-19-led recession on financial service firms will be felt, as government support schemes unwind over the coming months. Firms that have been affected by lockdown measures may trade through the summer months before losing the battle with cash flow issues and debt servicing issues during the autumn.

Financial services businesses that are easily able to interact with their clients online, and offer a good user experience, are better placed to thrive during the recession. Many of the tech elements, most notably the proliferation of smart phones, were not available during the financial crisis. This provides customers with a greater number of alternative providers.


40

30

60

50

70

100

80

90

110

120

1/31/20 2/28/20 3/31/20 4/28/20 5/29/20

Index: S&P Capital IQ1

1.8x

1.1x1.4x

Jan. 1, 2020

Mar. 16, 2020

Jun. 24, 2020

-0.4x

Coronavirus impact (P/BV)3

65 69 6752 43

88 85 8167

46

Nordic DCA2

European AM

Nordic Banks

Nordic Insurers

Nordic Consumer

Banks

16-03-20 24-06-20

Market capitalization (1 Jan = index 100)

[66.7]

[45.7]

[88.1]

[81.0][85.3]

[94.1]

Nordic Banks Nordic Insurance European AM

Nordic Consumer Finance Nordic DCA MSCI World


Energy & Resources



Notes

Sources:

https://www2.deloitte.com/ch/en/pages/financial-services/articles/navigating-towards-a-next-normal-after-covid19-wealth-management.html

https://www.theguardian.com/business/2020/may/14/lloyds-of-london-coronavirus-payouts


49.6

42.3

50.1

46.9

44.6

52.1

39.8

26.5

40.7

39.4

36.6

40.6

Note:

Source:

1) Data as of 23 June 2020

Capital IQ; MSCI World Indices; IHS Markit

Industry outlook: Industrials

PMI numbers surge to four-month high levels – with sector expansion in UK and France

Since last update (11 June 2020), the EV/EBITDA

multiple is up from 12.4x to 12.7x.

Share price development year-to-date

Trading multiples

1 Feb 201 Jan 20 1 Mar 20 1 Apr 20

80

1 May 20

100

1 Jun 20

50

60

70

90

110

Industrials MSCI WorldMaterials Automotive

11.7x 13.1x 14.2x

10y avg. 5y avg. 3y avg.

13.8x 12.7x

CurrentJan 1, 20

-1.1x

MSCI World Industrials Index

Historical averages

(EV/EBITDA)

Coronavirus impact

(EV/EBITDA)

10.4x 11.5x 11.7x


11.8x 13.3x

Jan 1, 20 Current

+1.5x

MSCI World Materials Index

Historical averages

(EV/EBITDA)

Coronavirus impact

(EV/EBITDA)

MSCI World Automotive Index

Historical averages

(EV/EBITDA)

Coronavirus impact

(EV/EBITDA)

10.1x 9.8x 10.0x

5y avg.10y avg. 3y avg.

11.1x 10.5x

CurrentJan 1, 20

-0.6x

Manufacturing PMI for US and Europe reach 4-month high levels


multiple is up from 12.8x to 13.3x.


multiple remains unchanged at 10.5x.

Since the sharp decline in stock prices on 10 June 2020, the industrial sectors have

slowly rebounded and are just short of highest level since pandemic escalation.

Indexed share price as of:

94.8

98.8

101.3

79.3

23 June 11 June

Japan

UK

Germany

IHS Markit Manufacturing PMI:

Index =50: No change

Index <50: Contradiction

Index >50: Expansion

USUS: With PMI reaching

almost 50, it indicates that

the development in the

manufacturing sector has

stabilised.

The pick-up in US PMI

primarily stemmed from

only minor falls in output

and new orders.

Eurozone

Flash - june May

91.3

96.9

99.3

76.6

France


Energy & Resources




Collaboration is the new normal

− COVID-19 has further accelerated an ongoing trend of collaboration

among LSHC companies, scientists, and public institutions.

− Examples of recent private collaborations are:

− Bavarian Nordic and AdaptVac for COVID-19 vaccine

− Consortium of 15 large life science companies, including Novartis,

Johnson & Johnson, and Pfizer, to share knowledge

Race for COVID-19 vaccine or other treatment

− The antiviral, Remdesivir, has shown promising results in preliminary

trials with improved recovery time and potential survival benefits.

− Race for developing a vaccine is still ongoing, with a horizon of 12-18

months.

− According to Milken Institute, 123 candidate vaccines and 203 different

treatment variations are being developed as of 7 May 2020.

Note:

Sources:

1) MSCI World Health Care Index (top 10 constituents); 2) MSCI World Pharmaceuticals, Biotechnology and Life Sciences Index (top 10 constituents)

Milken Institute, Deloitte Health Forward Blog, Capital IQ, NIH

Industry outlook: Life Science and Health Care (LSHC)

Swift recovery of LSHC sector with listed companies trading above pre-corona levels

Significant recovery in both Health Care and Life Science in recent weeks continues.

Life Science trades above pre-corona levels.

Significantly faster recovery and better performance among Life Science and Health

Care companies compared to the general market.

Highlights from the industry (as of 6 May 2020)

LSHC companies trade above pre-corona levels.

Countries are reopening, and many health care systems are again focusing

on other illnesses and treatments than COVID-19.

Rapid recovery expected for LSHC companies unrelated to COVID-19

treatments, as demand for non-essential medications and equipment rises.

Continued high demand for COVID-19 related therapies and equipment.


85.1

99.2

11.7x13.7x 14.1x

3y avg.10y avg. 5y avg.

Index: MSCI World Health Care Index

14.2x 14.2x

Jan 1, 2020 Current

0.0x

Historical averages (EV/EBITDA FY0) Coronavirus impact (EV/EBITDA FY0)

103.6

1 2

Indexed share price development

60

65

70

75

80

85

90

95

100

105

110

22 Dec 19 22 Jan 20 22 Feb 20 22 Mar 20 22 Apr 20

Healthcare Life science MSCI World


Energy & Resources




Towards normality

− Government’s focus is to move society towards normality and avoid an increase

in the reproduction rate.

From recover to thrive

− Continued pressure on government to increase the pace by which the economy

is reopened, and phase 3 of the reopening has been extended several times.

− Focus on how to stimulate growth and adapt to the new normal. A “Summer

package”, including pre-payment of holiday allowances, to stimulate economic

activity was introduced in mid-June 2020.

Deficit on public finances

− After a surplus in 2019, a deficit of 7.2% of GDP is expected in 2020. The deficit is

expected to be 1.8% of GDP in 2021.

− Public EMU debt is expected to increase from 33% of GDP in 2019 to 41% of GDP

in 2020.

− A European recovery fund of EUR 540bn has been introduced by the European

Ministers of Finance.

Sources: Deloitte Insights, Government’s response to COVID-19. From pandemic crisis to a better future, April 2020, Ministry of Finance, May 2020

Industry outlook: Public

The pandemic has been costly and may affect public spending in the long term


Aid packages and focus on supporting the private sector through earlier start-up of planned investment and prepayment of suppliers are expected to ease the negative impact on the

economy.

Aid packages and the economic setback will have an immediate negative impact on public finances and may challenge government spending in the long term.

The severe and long-lasting financial and economic impacts of the pandemic depend on the effects of the aid packages and the strategy for the reopening of society.

Digitalisation in the public sector may be boosted, as the crisis has reinforced virtual ways of working.

Economic outlook

A timeline for COVID-19 government response


Energy & Resources




Valuation

− Investment managers need to reflect the current uncertainty in their

valuations of property investments. Lack of transactions or comparables may

leave challenges for asset managers.

− Emphasised by COVID-19, the FSA has turned its eyes on valuation of

alternative investments, including real estate at asset managers (e.g., applied

valuation methodologies, handling of risks, and quality of data).

Accounting

− IRFS 16 amendment for leases: in case of lease modifications (e.g., rent

concessions), lessee does not have to recalculate straight lining, but can

account for it as no cash/rent payments during that period.

− However, this amendment only concerns the lessee, not for the lessor (i.e.,

asset managers).

1) Based on Collier International, Patrizia AG, Agate Ejendomme, Jeudan A/S, and Park Street Nordicom

Finans Danmark, Thomson Reuters Eikon, Capital IQ

Industry outlook: Real Estate

Expectation-driven real estate market leads to price reductions in the short term

The leading real estate index is in general recovering from the COVID-19 chock in March 2020,

but not back to covid-19 level yet. Despite the current challenges in some sectors, the industry

is in general better prepared financially.

Interest rates are now fixed at a higher level, which may last throughout the COVID-19 crisis.

Consumer


Price multiples are at pre-COVID-19 levels, and in general the major listed RE companies are

well-positioned to handle the crisis.

Decreasing prices in 2020 for single-family houses and apartments in major Danish cities

are expected due to reduced volumes. However, recent data and news suggest modest

increases so far in major cities and price increases in many municipalities (source: boligsiden

Statistics). So, the growing optimism may prove us wrong, leaving a housing market in good

shape before 2021.


27.3x27.6x

10y avg.

25.4x

5y avg. 3y avg.

Historical averages (EV/EBITDA) Coronavirus impact (EV/EBITDA)

Index: Custom weighted average index1

Note:

Sources:

Financial Services

Energy & Resources



30.6x 30.1x

1 Jan 2020 Current

-0.6x

0.5%

0.8%

1.0%

1.3%

1.5%

1.8%

2.0%

50

60

70

80

90

100

110

01 Jan 22 Jan 12 Feb 04 Mar 25 Mar 15 Apr 06 May 27 May 17 Jun

Inte

rest rate

Sto

ck p

rice

ind

ex(2

Ja

n 2

02

0 =

10

0)

STOXX 600 Real Estate Index Danish long-term mortgage rates


TMT perceived as a defensive sector, which has less to lose from COVID-19

Telecom: Spend among consumers is often within a contract; demand is up; need

is not discretionary (new cars) or constrained (leisure).

Media and Entertainment: Financial impact varies across sub-sectors. Media

consumption up (e.g., Netflix, Disney+), but willingness/ability to pay may be

constrained, as the economic outlook exacerbates. Events (consumer, business)

mostly heavily restricted; cinemas, theatres, museums mostly closed. TV and

movie production mostly halted. Theme parks mostly closed.

Technology: Some segments (e.g., robotics, communication software) seeing

record demand; digital transformation being accelerated; companies catering to

SMEs may suffer from customer liquidity.

Note:

Source:

1) MSCI World industry indices used (top 10 companies for sector indices), 01-01-2020 = index 100; 2) In EMEA and selected Asian countries, physical games sales are up by 63% according to GamesIndustry.biz.

S&P Capital IQ (June 2020), Gartner Market Databook (April 2020 update), Forrester Research (March 2020)

Industry outlook: TMT

TMT sectors have shown relative resilient to COVID-19, as the world has gone digital

TMT companies are trading above the overall equity market.

Media and Entertainment quickly recovered after the shockwave on the stock market. As

people stay home, the entertainment market is making records.2


Forrester has revised its IT spending forecast downward and expects a 50%

probability that global tech markets will decline by 2% or more in 2020 if a full-

fledged recession hits.

Gartner expects global IT spending in 2020 to decline by +6%.

Software spending is the subsector expected to show the highest resilience, while

computer equipment and IT consulting and systems integration services spending

are expected to show weaker growth.


60

80

70

90

120

100

110

100

96

17.9x23.0x 25.4x

3y avg.5y avg.10y avg.

Index: MSCI World Information Technology1

28.0x 27.9x

Jan 1, 2020 Current

-0.1x

Historical averages (EV/EBITDA) Coronavirus impact (EV/EBITDA)

116

110

Information Technology1 Media and Entertainment1Communication Services1 MSCI World

1 Jan 20 24 Jun 20


Energy & Resources




989

550650750850950

1050

1 11 21 31 41 51 61 71

Note:

Source:

1) A.P. Møller-Mærsk, D/S Norden, DFDS, DSV Panalpina, NTG, TORM, 2) Lowest YTD is 4.6x on March 20th

Capital IQ, Shanghai Shipping Exchange, Forbes, IHS Markit

Industry outlook: Transportation

The transportation market in recovery following the opening of several markets


Trading multiples and economic outlook (as of Jun-25)

Transportation indices have largely followed the total market, as a recovering market implies

an increased need for transportation of goods.

Transportation stocks indicate belief in the market’s recovery

− The rapid spread of COVID-19 has had a major impact on global goods

transport, with ripple effects from the shortfall in demand for goods from

China.

− The recent surge in stock prices since the low point in mid-March 2020

indicates an expectation for a recovering demand global trade, as several

countries are now opening up, driving the recovery of physical retail.

Accelerated conversion to e-commerce to aid in recovery

− As of mid-April 2020, US retailers’ online YoY revenue growth was 68%,

substantiated by 146% YoY growth in the number of online retail orders.

− A big rush on freight capacity and subsequent increase in freight rates are is

expected, as demand recovers and companies are trying to get their products

on the water.

7.1x 7.5x 7.5x


Historical averages

(EV/FY1 EBITDA)

7.4x

4.6x

7.5x

Last close 2019

Trough Current

+0.1x

Coronavirus impact2

(EV/FY1 EBITDA)

Danish-listed transportation companies1

2020

The Shanghai Containerized Freight Index (SCFI) is down by 3.3% to 889 from its

high 1023 in week 1, but up by 21.0% YoY.

2019

93.3

101.0100.6100.8

6065707580859095

100105110115120125130

Jun 19 Aug 19 Oct 19 Nov 19 Jan 20 Feb 20 Apr 20 Jun 20

MSCI World MSCI Transportation Danish Transportation Index


Energy & Resources




Industry outlook: Deloitte contacts

How Deloitte can help you

• Please use the contact details opposite to get in touch

with our Financial Advisory industry group leaders and

find out how we can assist you.

• We are well-positioned to assist in a range of tasks,

such as those below.

Mads Damborg

Partner

Email: [email protected]

Mobile: +45 30 93 54 81

Consumer

Troels Ellemose Lorentzen

Partner


Mobile: +45 30 93 56 90

Energy & Resources

Mads Damborg

Partner


Mobile: +45 30 93 54 81


Kasper Svold Maagaard

Partner


Mobile: +45 30 93 54 54

TMT

Tinus Bang Christensen

Partner


Mobile: +45 30 93 44 63

Real Estate

Financial Services

Rikke Beckmann Danielsen

Partner


Mobile: +45 30 93 56 92

Government & Public Services

Niels Stoustrup

Partner


Mobile: +45 30 93 59 15

Industrials

State aid packages

Liquidity scenario analysis

Debt covenant advice and financing

Business restructuring and M&A

Bankable business plan development

Stakeholder management and process control

Impact assessment

Economic modelling and forecasting

Focus areas

Björn Lagerstam

Partner


Mobile: +45 30 93 48 30


Danish business sector confidence indicators

European corporate sector earnings expectations

Danish 2020 GDP expectations

OECD GDP scenarios for 2020

European market volatility and credit default probability

Government support packages

Appendices

Page 23

Page 24

Page 25

Page 26

Page 27

Page 28

Government policy response vs Q1 GDP Page 22

Deloitte Government Response Portal Page 29


Note: 1) The index is a composite measure based on nine response indicators, including school closures, workplace closures, and travel bans, rescaled to a value from 0 to 100 (100 = strictest response).

Oxford COVID-19 Government Response Tracker, Thomson Reuters Eikon

Government policy response impact

Q1 economic contraction broadly in line with the stringency of the lockdown in Denmark

(10%)

(9%)

(8%)

(7%)

(6%)

(5%)

(4%)

(3%)

(2%)

(1%)

0%

10 15 20 25 30 35 40 45 50 55 60

United Kingdom

Norway

Italy

United States

France

Germany

China

Spain

Japan

South Korea

Denmark

• Several countries have published first estimates of GDP

growth for Q1 2020. These initial GDP estimates

highlight how the coronavirus pandemic, and the

response to it, has affected the global economy. It is

expected that the duration of the outbreak, the public

health restrictions imposed to contain the virus spread,

and other voluntary social distancing measures, will

affect the economic slowdown.

• The Government Response Stringency Index captures

this information by collecting information on government

policy responses to measure the stringency of the

lockdown country by country.

• The Government Response Stringency Index is a

composite measure based on nine response

indicators, including school closures, workplace closures,

and travel bans, given the policies that have been put in

place in Denmark.

Q1 2020 GDP growth vs the Oxford COVID-19 Government Response Stringency Index1

Q1 2

020 (

QoQ

) G

DP g

row

th

Sources:

Average of daily ‘stringency’ index for Q1 2020


1) Net index which expresses the difference in percentage of companies, weighted by employees, which have stated positive and negative expected sector development.

Statistics Denmark

Danish business sector confidence indicators

Sentiment across key sectors stabilised in May 2020

-45

-40

-35

-30

-25

-20

-15

-10

-5

0

5

10

• Recent data suggests that sentiment across key sectors in the Danish economy stabilised in May 2020 after falling sharply in April 2020.

• Within the Services and the Industrial sectors, sentiment deteriorated slightly in May 2020.

• Sentiment has improved across the Construction and Retail trade sectors, possibly reflecting a more positive outlook on the economy, as the government implemented the

first two phases to reopen society.

• Interestingly, sentiment within Industrials and Construction, while falling sharply in April 2020, did not reach the same levels as during the financial crisis, suggesting that

the COVID-19 related restrictions are perhaps not deemed to be as damning to the economy.

-60

-50

-40

-30

-20

-10

0

10

20

-50

-40

-30

-20

-10

0

10

20

-40

-30

-20

-10

0

10

20

Industrials1 Services1

Construction1 Retail trade1

2012 20182014 2016 2020

2012 20182014 2016 2020

2004 20162008 2012 2020

2004 20162008 2012 2020

Source:

Note:


Note:

Source:

1) Based on analyst estimates for S&P Europe 350 Index constituent companies.

S&P Capital IQ

Corporate sector earnings expectations

Corporate earnings expectations have been severely curtailed since the outbreak

• The selloff in European equity markets, triggered by the

COVID-19 pandemic and the associated economic slowdown,

differs across sectors, see page 3.

• To shed light on the underlying drivers of this selloff across

sectors, the chart opposite displays changes in expectations of

stock analysts. In particular, the chart shows how stock

analysts have downgraded consensus expectations for net

income across sectors and time:

− Energy, including oil and gas companies, saw its net

income estimates being downgraded by 40%-80% in 2020-

2021 likely due to sharp declines in oil and gas prices.

− Consumer Discretionary, Financials, and Transportation

are expected to be severely affected. On average, their

net income estimates for 2020 are more than 40% below

pre-crisis estimates.

− Health Care and Real Estate are expected to weather the

storm relatively well, both in the short (2020) and the long

(2023) term.

− Food & Staples Retailing is the only sector whose

expectations for 2020 have improved, albeit the

improvement is marginal.

Change in net income consensus estimates between 31 January 2020 and 24 June 20201

(80%) (70%) (60%) (50%) (40%) (30%) (20%) (10%) - 10%

Health care

Food & staples retailing

Real estate

Communication services

Other consumer staples

Information Technology

Utilities

Materials

Industrials

Financials

Transportation

Consumer discretionary

Energy

2020 2021 2022 2023


Sources: IMF, OECD, Danish Central Bank, Danish Ministry of Finance, DØRS, Confederation of Danish Industry, Danske Bank, Nordea

Danish 2020 GDP expectations

Latest survey of forecasters suggests a Danish GDP contraction of 5.4% for 2020

• The Danish Central Bank updated its forecast for Danish economy in 2020. The bank now expects a contraction of 4.1%, which is a slightly more positive outlook than its

previous (central) estimate of -5%.

• The Confederation of Danish Industry has based its projection of a 7% decline in 2020 GDP on a survey of its member firms.

• The Economic Councils project two scenarios for the Danish economy. In the optimistic scenario, the economy rebounds relatively quickly, and GDP declines by 3.5% in

2020. In the pessimistic scenario, a second wave of COVID-19 emerges during the autumn, and new containment efforts and restrictions are activated; new aid packages

are introduced. In this scenario, GDP contracts by 5.5% in 2020.

• Nordea updated its economic outlook for Denmark and the Nordic countries on 27 May 2020. Nordea expects the Danish GDP to contract 5% in 2020 before rebounding

4% in 2021. Previously, Nordea expected a 3% fall in output in 2020.

• The Danish Ministry of Finance has also updated its forecast, expecting a 5.25% contraction in national output in 2020 (compared to an earlier prediction of -4.4%).

• The OECD has forecast both a “single-hit” and a “double-hit” scenario, pencilling Danish GDP contraction at between negative by 5.8% and negative by 7.1%.

2.3%

3.9%

0.9%

(0.5%)

(4.9%)

1.9% 1.3%

0.2% 0.9%

1.6% 2.3%

3.2%

2.0% 2.4% 2.4%

Median, (5 .4%)

(8%)

(6%)

(4%)

(2%)

-

2%

4%

6%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Denmark: GDP growth and 2020 market expectations

Historical (IMF) Danish Central Bank Ministry of Finance The Economic Councils

IMF Confederation of Danish Industry Danske Bank Nordea

OECD Median


Source: OECD

OECD GDP scenarios for 2020

Danish GDP contraction is expected to be less severe than in other nations, thanks in part to its containment of the virus outbreak and lower exposure to vulnerable sectors

(9%) (9%) (9%) (9%) (8%) (8%) (9%) (8%) (8%) (8%) (8%) (8%) (8%) (7%)(6%)

(8%) (8%)(7%) (7%) (8%) (7%)

(6%)(5%)

(6%) (7%) (7%) (6%) (6%) (6%) (6%) (6%) (5%)

(1%)

(3%) (3%) (3%) (3%)

(4%)(2%) (2%) (1%) (2%) (2%)

(2%) (2%) (1%) (2%) (2%) (2%) (2%) (2%) (2%) (2%)(3%)

(1%) (1%)(2%) (2%) (1%) (1%)

(2%)(3%)

(2%) (1%) (1%) (1%) (2%) (1%) (2%) (1%)(1%)

(1%)

Fran

ce

Ch

ile

(11%)

(9%)

(10%)

Spai

n

Swit

zerl

and

Gre

ece

(11%)

(7%)

(14%)

Ital

y

(10%)

Euro

are

a (1

7 c

ou

ntr

ies)

(11%)

Wo

rld

(12%)N

eth

erla

nd

s

Un

ited

Kin

gdo

m

(10%)

(10%)

Cze

ch R

epu

blic

(11%)

Po

rtu

gal

(11%)

(10%)

Hu

nga

ry(2%)

Icel

and

(10%)

Irel

and

Slo

vak

Rep

ub

lic

Bel

giu

m

(10%)(11%)

Lith

uan

ia

Latv

ia

New

Zea

lan

d

Au

stra

lia

(7%)

Po

lan

d

De

nm

ark

Esto

nia

Can

ada

Turk

ey

Fin

lan

d

(8%)

Ger

man

y

Mex

ico

Un

ited

Sta

tes

(12%)

Ko

rea

Isra

el

Co

lom

bia

Au

stri

a

(14%)

Swed

en

Luxe

mb

ou

rg

No

rway

(11%)

(14%)

Jap

an

(14%)

Slo

ven

ia

(10%)(10%) (10%)(10%)

(10%)(9%) (9%) (9%) (9%)

(13%)

(9%) (8%) (8%) (8%) (8%) (8%) (8%) (7%)(6%)

(9%)

• The OECD released its latest forecasts for GDP growth across OECD nations, including for the Euro area and World.

• Two scenarios are projected, one in which another COVID-19 wave of infections and associated restrictions is avoided (“single-hit” scenario) and one in which a second

wave does occur (“double-hit” scenario).

• Under the single-hit scenario, global GDP is expected to fall by 6%, while the Eurozone is expected to be harder hit, with a 9% contraction. A further 3% and 2% contraction

is expected under a double-hit scenario.

• In Denmark, while the forecast contraction of 7% sounds high, it appears that relative to its developed country peers and World as a whole, the contraction is in the lower

end. There are various reasons for this, one being that the underlying virus outbreak has been well-contained compared to countries such as Spain and Italy. Another is

that the Danish economy is not as heavily exposed to sectors which have been particularly badly hit, such as tourism and energy, which have affected the United Kingdom

significantly. Denmark’s exposure to the pharmaceutical sector for instance has possibly acted as a buffer, as it has held up relatively well in comparison.

Single hit Double hit (additional decline)

Projected 2020 GDP growth rates with and without a second COVID-19 wave


Note:

Source:

1) VSTOXX as volatility index of EURO STOXX; 2) Default probability calculated based on 5Y iTraxx European Crossover CDS and a recovery rate of 40%

Thomson Reuters Eikon

Market volatility and European credit default probability

Equity market volatility remains elevated and comparable to the levels observed during the global financial crisis

• The VSTOXX Index measures 30-day implied volatility of

the EURO STOXX 50 equity index and reflects investors'

uncertainty about future equity market moves.

• As shown, the coronavirus induced an increase in volatility to a

level comparable to that experienced during the global

financial crisis in 2008. Since then, volatility has declined but

still remains elevated.

81

74

37

2011 2012 2013 2014 201820152007 2016 20172008 2019 20202009 2021

10

2010

50

20

30

60

0

70

80

90

100

40

VSTOXX Index1

Vola

tility

index

• The chart opposite shows the development in the implied

default probabilities based on the 5Y iTraxx European

Crossover spread of Credit Default Swaps and an assumed

recovery rate of 40%. It measures default probabilities on a

portfolio of sub-investment grade corporate debt in Europe.

• With a current default probability of about 28%, we are still at

elevated levels compared with the last three years.

• As the index reflects cost of debt, any refinancing will be costly

for leveraged companies, even though interest rates are close

to being record low.

OJ A

20

J JJA

30

0

10

40

50

A

60

70

A J JJJ JA J O J JA J O J A O A J J JOO AO J A J JO OJ AO J J OO J A JJA J A O J

50.2%

28.0%

%

43.3%

61.7%D

efa

ult p

robability in %

iTraxx Europe Crossover index: Default probability2


Sources:

In some countries, including Denmark, aid packages also include credit measures like state-guaranteed loans.

Danske Bank, Deloitte Covid-19 portal as of 5 May 2020

Government support packages

Massive state aid packages are launched to counter economic fallout from COVID-19

• The various lockdown measures in response to COVID-19 have

halted economic activity in certain sectors and harshly

disrupted others. The resulting job losses and bankruptcies may

crate major economic strains for millions in Europe and

worldwide.

• Gigantic state aid packages have been launched across the

world to counter the impact of the economic crisis.

• EU finance ministers agreed on a EUR 540bn (3.5% of EU GDP)

emergency support package for countries hit by the

coronavirus. The measures aim to provide safety nets for

workers, businesses and sovereigns.

• As these state aid packages are launched, governments sharply

increase debts to finance the increased spending levels. On this

background, the questions about the following issues have

started start to emerge:

− The sustainability of government debt funding

− The impact on inflation from sharp increases in

government spending

Denmark

17%

Germany

Austria

EU

Canada

France

China

Portugal

13%4%

New Zealand

Finland

Greece

Italy

7%

Japan

12%

10%

2%

3%Norway

Spain

21%

10%

13%

4%

Sweden

Switzerland

The Netherlands

6%

UK

USA

20%

10%

5%

17%

4%

8%

22%

1%

9%

6%

2%

21%

4%

State aid packages relative to GDP

FiscalCredit


• To aid our clients in navigating the complex landscape of COVID-19 assistance programmes, we have developed a free digital portal that captures the latest financial, tax,

business and social measures enacted by country.

Deloitte Government Response Portal

Database of financial, tax, business and social measures announced by governments globally

Access the portal!

https://www2.deloitte.com/global/en/pages/about-deloitte/articles/covid-19/covid19-government-funding-portal.html



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No representations, warranties or undertakings (express or implied) are given as to the accuracy or completeness of the information in this communication, and none of DTTL, its member firms, related entities, employees or agents shall be liable or responsible for any loss or damage whatsoever arising directly or indirectly in connection with any person relying on this communication. DTTL and each of its member firms, and their related entities, are legally separate and independent entities.

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