{"id":14769,"date":"2021-01-21T07:17:44","date_gmt":"2021-01-21T07:17:44","guid":{"rendered":"https:\/\/dna-medical.ap.applyflow.com\/?p=14769"},"modified":"2024-01-13T10:35:01","modified_gmt":"2024-01-13T10:35:01","slug":"australias-economy-poised-to-start-bouncing-back-in-2021","status":"publish","type":"post","link":"https:\/\/www.dnamedicalrecruitment.com.au\/australias-economy-poised-to-start-bouncing-back-in-2021\/","title":{"rendered":"Australia’s economy poised to start bouncing back in 2021"},"content":{"rendered":"
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\u200bAs the Covid-19 tide gradually turns a corner towards recovery, Deloitte Access Economics has taken stock of Australia\u2019s economy \u2013 forecasting a much brighter 2021 than originally feared.<\/p>\n

Australia\u2019s vaccine rollout starts next month, adding an extra safety net to a country where infection containment has been remarkably effective \u2013 particularly in global context. The upshot is that 2021 rings in with a note of optimism.<\/p>\n

\u201cAustralia is one of just five nations \u2013 Taiwan, China, Vietnam, New Zealand and ourselves \u2013 who enter 2021 very well-placed. Covid-19 numbers are very low, the vaccine news is excellent, confidence is rebounding, there are heartening developments in job markets, and China\u2019s trade war with Australia has \u2013 so far at least \u2013 actually added to national income rather than hurt it,\u201d noted Chris Richardson, partner at\u00a0<\/span>Deloitte<\/a>\u00a0Access Economics.<\/span><\/p>\n

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This is a change of tune for Richardson and Deloitte Access Economics. Midway through 2020, he was lamenting the tentative economy in Australia at a time when cases were worryingly on the rise again. At the time, the economic cost of a second wave was pegged at\u00a0<\/span>a devastating $100 billion<\/a>.<\/p>\n

Many factors were driving the contraction. Spending has been at a marked low amid a recession, which was also keeping investment at a minimum. Trade and supply chains were hindered, while migrant population \u2013 positioned as a key driver of Australia\u2019s future economic growth \u2013 had all but dried up. A vicious cycle: billions in\u00a0<\/span>job and income losses<\/a>\u00a0were making matters worse, which in turn cost more jobs.<\/span><\/p>\n

Today, each of these economic fundamentals looks to be on the mend. Per Deloitte Access Economics\u2019 growth outlook for 2021, around 300,000 people will return to the labour force this year, with over 400,000 job additions expected by the end of next year. Unemployment will steadily dip, dropping below 6% by 2023.<\/p>\n

Setting off the dominoes: more employment will boost household spending and business investment, while the vaccination will set the imports and exports back in motion. By the end of this year, the researchers expect Australia\u2019s GDP to grow by more than 4%.<\/p>\n<\/div>\n

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Victoria leading the rebound<\/h3>\n

Among the most promising signs is the turnaround in Victoria. In July, the region was an infection hotbed for Australia, which was met with a strict government response \u2013 termed \u201cthe hammer\u201d by Richardson. The economic risks of a complete lockdown were significant, although infection rates have since been brought under control and the state is in a position to reopen.<\/p>\n

In fact, Deloitte Access Economics expects Victoria to be the fastest growing state in 2021 \u2013 at more than 5%. Queensland and New South Wales are also backed for strong growth of around 4.5% this year, while Western Australia, Southern Australia, Northern territory and Tasmania could climb by more than 3%. Australian Capital Territory will also grow, albeit at a slower rate of just over 2%.<\/p>\n

Variations by geography are matched by differing forecasts by sector. For instance, a reopened economy will immediately spell a bounce back for travel, tourism, food, accommodation, retail and entertainment, which suffered from the sudden\u00a0<\/span>change in consumer behaviour<\/a>. Knee-jerk spending is expected to offset the low discretionary spending levels that could damage income for these industries.<\/p>\n

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Indeed, accommodation & food services alone can expect 18% growth this year per the report. More trade and transport will also deliver a 10% plus boost to the transport, storage, farming and fishing sectors. According to Richardson, other sectors will suffer at the hands of damaged economic fundamentals, which still hold some ground in the near future.<\/p>\n

Bumpy road ahead<\/h3>\n

\u201cTo be clear, although the damage of 2020 is winding back fast, it definitely hasn\u2019t disappeared, and it will linger: the enormous protection provided by the federal government is being dismantled rapidly, the world economy is a mess, and the geopolitical backdrop for Australia looks more troubled than it has been for many years.\u201d<\/p>\n

\u201cWage and price gains have been on a downtrend for decades, both locally and globally, and the Covid-19 crisis will keep both bumping along the bottom for some time.\u201d Indeed, wage growth will crouch at 1% for this year. This is in addition to \u201crock-bottom\u201d inflation of 1% kept low by unemployment, and \u201ccrushed\u201d interest rates of 0.1% \u2013 neither of which can expect a recovery before 2024.<\/p>\n

Lastly, migration has all but evaporated, and likely won\u2019t recover until the vaccine has taken effect globally. By 2022, Australia\u2019s population will be half a million people smaller than what was originally forecast before Covid-19. For sectors such as manufacturing and utilities \u2013 already plagued by a lack of global competitiveness \u2013 the economic outlook as it stands will prevent any meaningful growth. The same is true for the education sector.<\/p>\n

So there are some challenges to navigate. \u201cThen again, a bit of perspective is handy. Australia has made many mistakes in juggling Covid-19, but so far, we\u2019ve made fewer mistakes than most of the globe. You\u2019d rather be here than almost anywhere else,\u201d noted Richardson.<\/p>\n

\u200bOriginal article source –\u00a0<\/span>https:\/\/www-consultancy-com-au.cdn.ampproject.org\/c\/s\/www.consultancy.com.au\/news\/amp\/2876\/australias-economy-poised-to-start-bouncing-back-in-2021<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

\u200bAs the Covid-19 tide gradually turns a corner towards recovery, Deloitte Access Economics has taken stock of Australia\u2019s economy \u2013 forecasting a much brighter 2021 than originally feared. Australia\u2019s vaccine rollout starts next month, adding an extra safety net to a country where infection containment has been remarkably effective \u2013 particularly in global context. The…<\/p>\n","protected":false},"author":1,"featured_media":14772,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"none","footnotes":""},"categories":[1],"tags":[],"class_list":["post-14769","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorised"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.dnamedicalrecruitment.com.au\/af-api\/wp\/v2\/posts\/14769","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.dnamedicalrecruitment.com.au\/af-api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.dnamedicalrecruitment.com.au\/af-api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.dnamedicalrecruitment.com.au\/af-api\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.dnamedicalrecruitment.com.au\/af-api\/wp\/v2\/comments?post=14769"}],"version-history":[{"count":0,"href":"https:\/\/www.dnamedicalrecruitment.com.au\/af-api\/wp\/v2\/posts\/14769\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.dnamedicalrecruitment.com.au\/af-api\/wp\/v2\/media\/14772"}],"wp:attachment":[{"href":"https:\/\/www.dnamedicalrecruitment.com.au\/af-api\/wp\/v2\/media?parent=14769"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.dnamedicalrecruitment.com.au\/af-api\/wp\/v2\/categories?post=14769"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.dnamedicalrecruitment.com.au\/af-api\/wp\/v2\/tags?post=14769"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}