Australia Economic Forecast

Australia Economic Outlook

May 26, 2020

The 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 Growth

The 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

2015 2016 2017 2018 2019
Population (million)24.024.424.825.225.6
GDP per capita (USD)51,47451,97155,97056,462-  
GDP (USD bn)1,2351,2681,3871,421-  
Economic Growth (GDP, annual variation in %)2.32.82.52.7-  
Consumption (annual variation in %)-  -  -  -  -  
Investment (annual variation in %)-4.0-2.33.52.4-  
Exports (G&S, annual variation in %)6.56.93.45.1-  
Imports (G&S, annual variation in %)2.00.17.84.1-  
Industrial Production (annual variation in %)1.72.01.23.8-  
Retail Sales (annual variation in %)4.53.72.43.02.7
Unemployment Rate6.15.75.65.35.2
Fiscal Balance (% of GDP)-2.3-2.4-1.9-0.50.0
Public Debt (% of GDP)37.740.541.141.4-  
Money (annual variation in %)13.78.28.92.322.1
Inflation Rate (CPI, annual variation in %, eop)1.71.51.91.81.8
Inflation Rate (CPI, annual variation in %)1.51.31.91.91.6
Inflation (PPI, annual variation in %)1.40.91.61.81.8
Policy Interest Rate (%)2.001.501.501.500.75
Stock Market (annual variation in %)-0.87.07.8-7.419.1
Exchange Rate (vs USD)0.730.720.780.710.70
Exchange Rate (vs USD, aop)0.750.740.770.750.70
Current Account (% of GDP)-4.7-3.3-2.6-2.0-  
Current Account Balance (USD bn)-58.3-41.5-35.5-28.8-  
Trade Balance (USD billion)-13.13.110.030.358.5

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Australia Facts

Value Change Date
Bond Yield1.371.47 %Dec 31
Exchange Rate0.700.05 %Dec 31

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