Australia Economic Outlook
May 26, 2020The economy seems to have entered a sharp recession in the second quarter, hit by coronavirus fallout, after having already likely weakened in the first quarter amid falling sentiment. Consumer and business confidence fell to abysmal levels in April-May and April, respectively, and coupled with cooling house price growth, a collapse in retail sales and the sharpest plunge in jobs on record in April revealed trouble for the economy. Meanwhile, on 22 May Fitch Ratings cut the outlook on the country’s AAA rating from stable to negative, due to the government’s large fiscal response to the crisis. On a more positive note, in mid-May the country sold AUD 19 billion (over USD 12 billion) of government bonds, hinting at sustained debt appetite and that the government will be able to finance its bulky stimulus plan.
Australia Economic GrowthThe economy is poised to be hammered by the health crisis and associated lockdown this year, as both the external channel and domestic activity are hit. That said, measures taken by the government and the Central Bank should help cushion the downturn somewhat. A faster-than-expected recovery in China poses upside risks. FocusEconomics panelists project GDP to contract 4.1% in 2020, which is down 0.5 percentage points from last month’s forecast. In 2021, the economy is seen expanding 4.1%.
Australia Economy Data
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|Bond Yield||1.37||1.47 %||Dec 31|
|Exchange Rate||0.70||0.05 %||Dec 31|
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Australia Economic News
July 7, 2020
At its monetary policy meeting on 7 July, the Reserve Bank of Australia (RBA) decided to keep the cash rate unchanged at an all-time low of 0.25%.
June 19, 2020
Preliminary data shows nominal retail sales in May skyrocketed at the fastest pace on record amid easing coronavirus lockdowns.
June 18, 2020
Seasonally-adjusted employment nosedived by 227,700 in May, following a revised record-high 607,400 job lost in April (previously reported: -594,300).
June 11, 2020
The Westpac-Melbourne Institute consumer sentiment index jumped to 93.7 in June from 88.1 in May, consequently recovering further ground from the index’s worst reading since February 1991 recorded last April.
June 9, 2020
The business confidence index produced by National Australia Bank (NAB) rose to minus 20.0 points in May, from minus 45.5 points in April.