COVID-19 recession: Bigger they are, harder they fell
Victoria’s economy could contract by up to 18 per cent over the September quarter, on Citi estimates, or more than twice the fall recorded in the June quarter.
Victoria’s economy could contract by up to 18 per cent over the September quarter, on Citi estimates, or more than twice the fall recorded in the June quarter national accounts.
The two biggest states suffered the worst through the most severe national economic contraction in 75 years over the quarter, the Australian Bureau of Statistics reported, while resources-rich Queensland and Western Australia outperformed.
The seasonally adjusted figures showed NSW’s economy plunged by 8.6 per cent, only slightly worse than Victoria’s 8.5 per cent drop in state final demand over the three months. This compared with the equivalent national contraction in final demand of 7.4 per cent.
The Queensland and WA economies contracted by a more moderate 5.9 per cent and 6 per cent respectively, as the resources sector negotiated the COVID-19 downturn better than other industries, thanks in large part to a swift recovery in Chinese demand for bulk commodities, especially iron ore.
SA’s economy outperformed the national average, but still contracted by 5.8 per cent. Tasmania suffered a 7.4 per cent plunge in state final demand, while the Northern Territory and ACT proved the most resilient, as their economies shrank by 4.9 per cent and 2.2 per cent.
On Thursday, Josh Frydenberg flagged most of the country had begun the long and bumpy road to recovery since June 30.
But Victoria’s second wave and intensified restrictions in July and August will cost its economy $15bn-$20bn – equivalent to an up to 18 per cent plunge in state final demand, Citi chief economist Josh Williamson said.
Premier Daniel Andrews said on Wednesday there “will be a historic and an unprecedented level of investment, because that’s what’s needed right now”.
While Victoria struggles, NSW Treasurer Dominic Perrottet said his state was “ready to bounce back”.
Economists urge RBA to follow US and spare the rates cut knife
After the US Federal Reserve kept rates on hold for the first time since July, JudoBank chief economic adviser Warren Hogan said it was ‘very much a cautionary tale for the RBA’.
Federal Labor on a collision course with miners over green push
The federal government has made a powerful enemy for itself in the west after the Chamber of Minerals and Energy WA said it would fight Labor’s push for so-called nature-positive laws.