Invest
Australian economy to bounce back ‘faster and stronger’
The Australian economic recovery is going to be faster and stronger than economists previously expected, a big four bank has said.
Australian economy to bounce back ‘faster and stronger’
The Australian economic recovery is going to be faster and stronger than economists previously expected, a big four bank has said.
Commonwealth Bank’s head of Australian economics, Gareth Aird, has updated his predictions for the national economy, which is now expected that GDP will contract by 3.3 per cent in 2020 but will have a stronger recovery in 2021.
Over the next two years, GDP is predicted to grow by 4.2 per cent in 2021 (previously 2.5 per cent) and another 3.8 per cent in 2022.
“When GDP and employment collapsed in Australia over Q2 20, comparisons were made with the Great Depression,” he said.
"We had not seen such a sharp deterioration in economic data since the 1930s. But the similarities between the Great Depression and the COVID-19 pandemic from an economic perspective only pertain to the Q2 20 activity data.”
While highlighting the drop is similar to the 1930s, Mr Aird points to the huge monetary and fiscal support injections that did not occur during the Great Depression.
“The government’s fiscal support packages were designed to keep as much of the economic furniture intact so that when restrictions were eased, activity could rebound swiftly,” Mr Aird said.
“It is clear that the economic data at the national level has improved since the middle of the year. Indeed, we expect a decent bounce in GDP over the second half of this year to show up in the Q3 20 and Q4 20 national accounts.”
Mr Aird said he was “optimistic” about the strength and duration of the economic recovery and said there was plenty of evidence creeping into the data that signals strong outcomes next year are more likely than not.
“Provided transmission of COVID-19 in Australia remains low, particularly community transmission, the strength of the economic recovery in 2021 will surprise many.
“We believe the metaphorical ‘bridge’ has been built very well and sets Australia up for a prosperous next two years,” Mr Aird concluded.
About the author
About the author
Economy
Lessons from the GFC: RBA warns ‘not to remove stimulus too early’
The Reserve Bank has warned the government against reducing support for the economy too soon, with Australia’s recovery from its first economic downturn in nearly three decades likely to be bumpy. ...Read more
Economy
Frydenberg expands instant asset write-off eligibility
Treasurer Josh Frydenberg has moved to expand the eligibility of the full expensing measure to allow bigger businesses to qualify. ...Read more
Economy
How many jobs did JobKeeper save?
The JobKeeper legislation has potentially saved hundreds of thousands of Australian jobs, the central bank has revealed. ...Read more
Economy
Australian economy must adapt to megatrends: CSIRO
To remain competitive in a post-COVID-19 world, Australia will need to make a leap in five key categories, according to a report commissioned by the CSIRO. ...Read more
Economy
Budget scheme to give NSW adults $100
Every adult in NSW will be given $100 to spend on entertainment or dining as part of the state’s $500 million cash splash to stimulate struggling sectors from the COVID-19 recession. ...Read more
Economy
Gas-led recovery will fail to fire
The government’s proposed gas-led recovery from the COVID-19 pandemic is based on unfounded claims, new research has revealed. ...Read more
Economy
12 signs a business is heading towards insolvency
With just 50 days before key government stimulus packages are withdrawn, business insolvency is tipped to rise, according to an industry expert. ...Read more
Economy
Financial stress costing the economy $31bn
At least half of all Australian workers have reported some level of financial stress, which is impacting output of the workforce, new research has found. ...Read more
Economy
Lessons from the GFC: RBA warns ‘not to remove stimulus too early’
The Reserve Bank has warned the government against reducing support for the economy too soon, with Australia’s recovery from its first economic downturn in nearly three decades likely to be bumpy. ...Read more
Economy
Frydenberg expands instant asset write-off eligibility
Treasurer Josh Frydenberg has moved to expand the eligibility of the full expensing measure to allow bigger businesses to qualify. ...Read more
Economy
How many jobs did JobKeeper save?
The JobKeeper legislation has potentially saved hundreds of thousands of Australian jobs, the central bank has revealed. ...Read more
Economy
Australian economy must adapt to megatrends: CSIRO
To remain competitive in a post-COVID-19 world, Australia will need to make a leap in five key categories, according to a report commissioned by the CSIRO. ...Read more
Economy
Budget scheme to give NSW adults $100
Every adult in NSW will be given $100 to spend on entertainment or dining as part of the state’s $500 million cash splash to stimulate struggling sectors from the COVID-19 recession. ...Read more
Economy
Gas-led recovery will fail to fire
The government’s proposed gas-led recovery from the COVID-19 pandemic is based on unfounded claims, new research has revealed. ...Read more
Economy
12 signs a business is heading towards insolvency
With just 50 days before key government stimulus packages are withdrawn, business insolvency is tipped to rise, according to an industry expert. ...Read more
Economy
Financial stress costing the economy $31bn
At least half of all Australian workers have reported some level of financial stress, which is impacting output of the workforce, new research has found. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
