Australia Economic Outlook
November 17, 2020The economic recovery was seemingly limited in Q3, following Q2’s record GDP contraction. On the production side, business confidence—despite improving from Q2—remained entrenched in pessimistic territory. This, coupled with a sizable contraction in merchandise exports, points to still-weak private sector activity. Meanwhile, elevated uncertainty and the lockdown in Victoria seemed to weigh on consumer confidence and constrain spending in Q3: Retail sales contracted month-on-month in both August and September. Moreover, the labor market shed jobs at the tail end of the quarter, likely further dragging on private consumption. Moving to Q4, the lifting of lockdown measures in Melbourne in late October bodes well for the recovery. Furthermore, the adoption of an expansionary budget for FY 2021 boosted consumer and business confidence at the beginning of the quarter and should support activity ahead.
Australia Economic GrowthThe economy is projected to return to growth in 2021, following this year’s pronounced contraction. A recovery in household spending and fixed investment, supportive fiscal and monetary policy measures, and the gradual reopening of the global economy should fuel the rebound. However, potential further restrictions at home and abroad pose a downside risk. FocusEconomics panelists project GDP to expand 3.2% in 2021, which is unchanged from last month’s estimate. In 2022, the economy is seen expanding 3.3%.
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
November 19, 2020
Seasonally-adjusted employment surged by 178,800 in October, contrasting a revised 42,500 jobs loss in September (previously reported: -29,500).
November 12, 2020
The Westpac-Melbourne Institute consumer sentiment index jumped from 105.0 in October to 107.7 in November, marking the highest reading since November 2013.
November 10, 2020
The business confidence index produced by National Australia Bank (NAB) rose from minus 3.8 points in September to 4.7 points in October, marking the highest reading since May 2019.
November 4, 2020
Nominal retail sales in August fell 1.1% over the previous month in seasonally-adjusted terms, following August’s 4.0% slump. Particularly pronounced decreases were recorded in household goods retailing; food retailing and clothing, footwear and personal accessory retailing.
November 3, 2020
At its monetary policy meeting on 3 November, the Reserve Bank of Australia (RBA) decided to cut the cash rate from 0.25% to a new all-time low of 0.10%.