News dalla rete ITA

5 Gennaio 2021

Australia

ECONOMY: COVID-19 SPIKE THREAT TO RECOVERY

Leading economists are hoping NSW's COVID-19 outbreak can be managed without resorting to Victorian-style lockdowns, fearing such measures would jeopardise what would otherwise be a strong national economic recovery. As long as community transmission in Greater Sydney can be contained with contact tracing, sensible activity limits and the newly mandated mask requirements, there is every reason to believe the economy will claw back all of its lost output sometime this year. Economists expect growth of 7.5 per cent for the 12 months to the end of June 2021, according to the median forecaster surveyed by The Australian Financial Review. The growth rate will dip to a more sedate 4 per cent by the end of calendar 2021, and slow to 3.5 per cent by June 2022. The budget update issued last month anticipates growth of 4.5 per cent in 2021; the Reserve Bank's forecast is 6 per cent for June 2021 and 5 per cent over the calendar year. That also means a majority of forecasters are counting on a recovery of all lost output by the end of the June quarter, exactly a year since the economy experienced its record 7 per cent contraction. In December 2019, before the Wuhan outbreak made headlines, the same economists were forecasting only 2.25 per cent growth for calendar year 2020 as they fretted about consumer spending. It is consumer spending that will drive the recovery. Consumer confidence hit a decade high in December, according to the Westpac-Melbourne Institute index. Buoyed by the government's measures to protect jobs and keep people in their homes, consumers let loose as the Reserve Bank holds interest rates at a record low 0.1 per cent for the next three years, based on its forward guidance. Easy monetary policy continues to underpin the economic recovery, even as international borders are set to remain shut well into the new year to manage infections. That has also made people more willing to shop and holiday at home. Still, unemployment might not be repaired before late 2022 at the earliest. What's true for growth is not necessarily the same for jobs. There are little gains factored into the labour market based on the median forecast for a 6.8 per cent unemployment rate by the end of June, dropping to 6.5 per cent by the end of 2021. The jobless rate was 6.8 per cent in November according to the ABS' latest survey. It would have to fall even further to start to generate meaningful wage pressures and lift inflation, economists agree. Full employment would require an unemployment rate closer to 4 to 4.5 per cent, according to Westpac figures. The Australian dollar is expected to stay around its current 2½-year high of US76¢ for the next six months, rising to US78¢ by the end of the year, according to the median forecast. To help keep the Australian dollar under control, the Reserve Bank ventured into buying long-dated government bonds for the first time in November. Economists broadly welcomed this capitulation to unconventional monetary policy. Budget repair will take even longer. Brendan Rynne, chief economist at KPMG, said deficit forecasts are now likely to be slightly lower than anticipated in the October 2020 federal budget as iron ore exports rage, but still total around $200 billion for 2020-21 and $100 billion for 2021-22. (ICE SYDNEY)


Fonte notizia: The Australian Financial Review 04.01.2021