Invest
IMF predicts Australia to yoyo out of recession
The Australian economy is expected to bounce back almost as quickly as it falls, with the International Monetary Fund calling Australia’s recovery as V-shaped.
IMF predicts Australia to yoyo out of recession
The Australian economy is expected to bounce back almost as quickly as it falls, with the International Monetary Fund calling Australia’s recovery as V-shaped.
Australia’s GDP will shrink by a massive 6.7 per cent in 2020, with a potential rebound of 6.1 per cent in 2021, restoring hope for the “V-shaped” recovery that many economists were predicting before the fallout from COVID-19 began.
“The IMF is forecasting Australia to grow by 6.1 per cent in 2021, faster than the economies of the United States, Canada, Japan, France, Germany and the United Kingdom,” Mr Frydenberg said.
But the prediction of a V-shaped recovery has been disputed by former prime minister Kevin Rudd, who believes this is based off the best case scenario.
“How long do we maintain lockdown, how long do we maintain social distancing, and how long do we maintain quarantine?” Mr Rudd said on ABC Radio.
“That’s the huge variable on all of this, and if you read carefully in the fine print of the IMF report, its 2021 rebound projections are very much conditional on that.”
Mr Rudd, who recently joined an IMF advisory board, believes that the recovery is more likely to be U-shaped or even W-shaped, with “fluctuations in public health recovery and public economic recovery” requiring policy measures to be updated constantly.
“Measures on the fiscal side covering the demand gap are good and important,” Mr Rudd said.
“Monetary policy measures are important as well. But frankly, preventing this crisis from metastasising into a financial crisis is a core challenge for policymakers around the world at present.”
Despite a quick bounceback, the IMF is still predicting COVID-19 to be the worst global recession in almost a hundred years amid massive output losses and ongoing economic uncertainty.
“It is very likely that this year the global economy will experience its worst recession since the Great Depression, surpassing that seen during the global financial crisis a decade ago,” said IMF chief economist Gita Gopinath.
State Street Global Advisors head of global macro policy research Amlan Roy believes the impact could be a lost decade for overseas emerging economies.
“The practice of referring to V- or W-shaped recoveries has always been puzzling without specification of the angle, depth and time periods associated with such letter references.
“In a bad scenario, it could lead to a lost decade for many emerging market countries. The need of the hour is global coordination to ensure that the lowest deciles of poorest and even rich countries, especially those in the informal sector do not get left behind.”
“The operational logistics of getting resources (food, water, medicines, funds etc) in a timely fashion to those who need it most requires coordination within and across countries – it is a human crisis, not just an economic one.”
About the author
About the author
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
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. ...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
Not a clever country: Why Australia needs to develop highly skilled sectors
Australia should transition away from mining and property towards industries of the future or risk losing competitiveness over the long term, an industry expert has warned. ...Read more
Economy
Government warned over ‘megaprojects’ recovery
The Australian government is being warned that multibillion-dollar mega transport projects flagged to stimulate the economy post-COVID-19 could have blowouts in costs and lack benefits. ...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
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. ...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
Not a clever country: Why Australia needs to develop highly skilled sectors
Australia should transition away from mining and property towards industries of the future or risk losing competitiveness over the long term, an industry expert has warned. ...Read more
Economy
Government warned over ‘megaprojects’ recovery
The Australian government is being warned that multibillion-dollar mega transport projects flagged to stimulate the economy post-COVID-19 could have blowouts in costs and lack benefits. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
