Post-COVID Fiscal Stimulus: Assessing the Multiplier Effects in Developing Nations

Abstract

The economic fallout of the COVID-19 pandemic compelled governments across the globe to implement large-scale fiscal stimulus packages. For developing countries, the challenge was twofold: addressing the immediate economic distress while managing already constrained fiscal positions. This paper analyzes the fiscal multipliers associated with various types of stimulus spending—consumption support, capital expenditure, and health sector investments—in selected developing economies. Using panel data from 2019 to 2021 across countries in Asia, Africa, and Latin America, the study estimates short-term and medium-term output effects of government spending. The findings highlight the differential impact of stimulus components and provide insights for designing fiscally sustainable and growth-enhancing recovery strategies in the aftermath of the pandemic.