The Reserve Bank predicts that this year Australia’s economy will grow by about 2.75 percent and next year by 3 percent, reflecting a positive outlook for the country given the bushfires and coronavirus.
Reserve Bank Governor Philip Lowe says dropping unemployment by rebuilding would counterbalance the harmful effects of the bushfires and the virus. He says the economic hit from the catastrophic bushfire season and the virus threat that unfolds will only weigh temporarily on domestic growth.
The Bank’s outlook was for demand growth to accelerate slowly, accompanied by moderate growth in disposable household income and housing market recovery. In most capital cities and areas of regional Australia, increases for housing prices had picked up in recent months. Prices had increased very strongly in Sydney and Melbourne in recent months. Higher housing prices and the associated increase in housing turnover were expected to support consumption and property investment.
He states that coming to an end was the downturn in global growth that started in 2018 and that global growth is expected to be slightly stronger this year and next than it was last year.
He credits the expected growth to low interest rate trends, recent tax refunds, continuing infrastructure spending, a better resource sector forecast and, later this year, an estimated improvement in residential construction. Mr. Lowe also points out that the Australian dollar is around its lowest in recent times and will help exporters.
