Australia’s economy is in a stronger position than predicted despite the Covid-19 pandemic, says a report by Deloitte Access Economics.
The report’s lead author Chris Richardson says the outcomes are “healthier and happier” than the forecasts from the Federal Treasury and the Reserve Bank, largely because consumers have spent much more than expected.
“The central bit of the economy, and the spot where the fear may have showed up the most, has actually done surprisingly well,” he says.
Retail sales in May increased 5.8% on the gures from May last year. The Reserve Bank predicted consumer spending to drop by 15% between the March and June 2020 quarters, but May’s strong gures suggest that this is unlikely to eventuate. Infrastructure will be critical to the rebuilding process, with State and Federal Governments already expediting many projects to help stimulate the economy.
A key to economic recovery would be to avoid stopping JobSeeker, JobKeeper and other stimulus measures at the same time.