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
‘Acceleration of inflation’ calls for action on wage growth, experts say
Experts aren’t surprised by accelerating inflation, but they remain concerned about wage growth. ...Read more
Economy
Vaccine delays threaten Australia’s economy recovery
Wins on the health front are leading to stronger economic outcomes, with the latest COVID-19 outbreak, coupled with a slow vaccine rollout, putting further pressure on Australia’s economic recovery....Read more
Economy
It all depends on NSW: Treasurer confirms
Whether or not Australia enters its second recession in as many years will depend on how quickly NSW slows the spread of COVID-19, as the PM pledges everyone will have a vaccine by Christmas. ...Read more
Economy
5 reasons for optimism despite the COVID outbreak
Despite the COVID-19 outbreak continuing to impact much of the world, including Greater Sydney, an economist has urged investors to remain calm, highlighting five reasons for optimism. ...Read more
Economy
Resurgent fuel prices drive CPI to 3.8% annual rise
Australia may still be dealing with the pandemic, but the ABS says that the consumer price index is returning to normal. ...Read more
Economy
COVID-19 Disaster Payment boosted; JobSeeker recipients to receive additional help
The federal government is providing further support to individuals impacted by the NSW lockdown, which was prolonged by four weeks on Wednesday morning. ...Read more
Economy
Sydney’s COVID lockdown extended
Greater Sydney is in for another four weeks of lockdown, at least, according to Premier Gladys Berejiklian. ...Read more
Economy
Australia’s strongest state economy revealed
Tasmania remains Australia’s strongest-performing state economy, narrowly beating Victoria, new data has revealed. ...Read more
The Olympic effect on property and equity investors; COVID-19 Disaster Payments and super
Listen now
Do lockdowns boost property prices? Are short-sellers levelling the playing field? Did you lodge your tax returns early?
Listen now
Will lockdowns halt the housing boom? Is the metaverse taking over? And the cons of lodging your tax returns early
Listen now
Are you being priced out of the market? Have you got the Tuesday blues? And are you ready for the upcoming super changes?
Listen now
Economy
‘Acceleration of inflation’ calls for action on wage growth, experts say
Experts aren’t surprised by accelerating inflation, but they remain concerned about wage growth. ...Read more
Economy
Vaccine delays threaten Australia’s economy recovery
Wins on the health front are leading to stronger economic outcomes, with the latest COVID-19 outbreak, coupled with a slow vaccine rollout, putting further pressure on Australia’s economic recovery....Read more
Economy
It all depends on NSW: Treasurer confirms
Whether or not Australia enters its second recession in as many years will depend on how quickly NSW slows the spread of COVID-19, as the PM pledges everyone will have a vaccine by Christmas. ...Read more
Economy
5 reasons for optimism despite the COVID outbreak
Despite the COVID-19 outbreak continuing to impact much of the world, including Greater Sydney, an economist has urged investors to remain calm, highlighting five reasons for optimism. ...Read more
Economy
Resurgent fuel prices drive CPI to 3.8% annual rise
Australia may still be dealing with the pandemic, but the ABS says that the consumer price index is returning to normal. ...Read more
Economy
COVID-19 Disaster Payment boosted; JobSeeker recipients to receive additional help
The federal government is providing further support to individuals impacted by the NSW lockdown, which was prolonged by four weeks on Wednesday morning. ...Read more
Economy
Sydney’s COVID lockdown extended
Greater Sydney is in for another four weeks of lockdown, at least, according to Premier Gladys Berejiklian. ...Read more
Economy
Australia’s strongest state economy revealed
Tasmania remains Australia’s strongest-performing state economy, narrowly beating Victoria, new data has revealed. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
