Invest
Australians predict record-low growth
Australians are expecting a lower inflation rate for longer, with a national survey showing the country is predicting a record-low inflation rate.
Australians predict record-low growth
Australians are expecting a lower inflation rate for longer, with a national survey showing the country is predicting a record-low inflation rate.
In June, Australians expected inflation of 3.2 per cent annually over the next two years. This result signified a new record low for the index – down 0.1 per cent on May and a significant 0.8 percentage points on the pre-COVID period of February 2020.
Inflation expectations have declined around the nation; however, the magnitude of the drop has been far larger in some places than others – notably Melbourne where inflation expectations have dropped 0.9 per cent points since February to only 2.8 per cent in June.
The biggest decline has been in Tasmania, down from 4.9 per cent in February to 2.9 per cent in June, a drop of 2 per cent points as Hobart’s formerly hot housing market has cooled during the COVID-19 pandemic.
Roy Morgan CEO Michele Levine said the rapid decline in inflation expectations in recent months is a sign of ongoing economic weakness as Australia experiences its first recession for three decades.
The sharpest declines have been in Melbourne and Tasmania, she explained, noting that the Victorian capital has experienced a spike in new cases of COVID-19 since mid-June, and in response, restrictions have been tightened progressively, with the Melbourne metropolitan area returning to a stage 3 lockdown this week.
The renewed restrictions will place a great deal of pressure on businesses that have already endured more than three months of turnover well below normal levels.
“The surge in new cases in Melbourne has also led to the Tasmanian government extending its state of emergency until the end of August – Tasmania’s economic dependence on Victorian businesses and tourists is larger than for any of the other mainland states,” Ms Levine said.
“The island border remains closed to visitors until at least late July.”
States that are surviving the COVID-19 pandemic are seeing stronger inflation expectations, the research also showed.
Adelaide experienced the least change, with inflation expectations of 3.7 per cent in June down only 0.1 per cent percentage points since February, while expectations in Brisbane, Sydney and Perth are down by 0.5-0.6 per cent
“Although most parts of Australia appear to have flattened the curve and suppressed COVID-19 to almost negligible levels, the renewed outbreak in Victoria also provides a stark warning to other jurisdictions about remaining vigilant,” Ms Levine said.
“The situation in Victoria clearly illustrates that the consequences of another nationwide outbreak would be devastating to businesses and the fragile economic recovery already underway. All efforts must be undertaken to prevent this from happening.”
About the author
About the author
Economy
5 ways the election could impact your US investments
With the Biden v Trump election just around the corner, investors in the US market need to watch out for a host of possible scenarios in the event of a changing government, an industry expert has flag...Read more
Economy
Lots of ammo, wrong target: Budget fails to hit its mark
The latest Treasury budget is the right size but is poorly targeted, with the focus on supply when a lack of demand is the real issue, according to an expert. ...Read more
Economy
Administrations rise as zombie firms accept reality
Business administrations have started to rise for the first time since June, with Victoria and Queensland recording the biggest spikes, new data from CreditorWatch has shown. ...Read more
Economy
Does the central bank favour the rich?
Current monetary policy strategies, including slashing cash rates and quantitative easing, are inflating asset prices and creating a greater inequality gap, an industry expert has said. ...Read more
Economy
Renewable energy, childcare subsidiary to kickstart the economy
Opposition Leader Anthony Albanese has promised childcare subsidies and an overhaul of the energy system as part of his plan to kickstart the economy. ...Read more
Economy
Rate cuts possible on Melbourne Cup Day: expert
The Reserve Bank of Australia could be looking to adjust official interest rates on Melbourne Cup Day for the first time in more than a decade, according to mortgage aggregator Finsure Group. ...Read more
Economy
Super fund CEO slams economic weaknesses
One of Australia’s biggest super funds has called the 2020 budget a “missed opportunity” to address the systemic weaknesses in the economy which have been exposed by COVID-19. ...Read more
Economy
Budget 2020 unveiled: The path out of the pandemic
Seven months overdue, the long-awaited federal budget has been delivered, setting out a much-anticipated plan for economic recovery post-COVID-19. Here’s what this might mean for you. ...Read more
Economy
5 ways the election could impact your US investments
With the Biden v Trump election just around the corner, investors in the US market need to watch out for a host of possible scenarios in the event of a changing government, an industry expert has flag...Read more
Economy
Lots of ammo, wrong target: Budget fails to hit its mark
The latest Treasury budget is the right size but is poorly targeted, with the focus on supply when a lack of demand is the real issue, according to an expert. ...Read more
Economy
Administrations rise as zombie firms accept reality
Business administrations have started to rise for the first time since June, with Victoria and Queensland recording the biggest spikes, new data from CreditorWatch has shown. ...Read more
Economy
Does the central bank favour the rich?
Current monetary policy strategies, including slashing cash rates and quantitative easing, are inflating asset prices and creating a greater inequality gap, an industry expert has said. ...Read more
Economy
Renewable energy, childcare subsidiary to kickstart the economy
Opposition Leader Anthony Albanese has promised childcare subsidies and an overhaul of the energy system as part of his plan to kickstart the economy. ...Read more
Economy
Rate cuts possible on Melbourne Cup Day: expert
The Reserve Bank of Australia could be looking to adjust official interest rates on Melbourne Cup Day for the first time in more than a decade, according to mortgage aggregator Finsure Group. ...Read more
Economy
Super fund CEO slams economic weaknesses
One of Australia’s biggest super funds has called the 2020 budget a “missed opportunity” to address the systemic weaknesses in the economy which have been exposed by COVID-19. ...Read more
Economy
Budget 2020 unveiled: The path out of the pandemic
Seven months overdue, the long-awaited federal budget has been delivered, setting out a much-anticipated plan for economic recovery post-COVID-19. Here’s what this might mean for you. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
