3 Minutes to Read (Reuters) – SYDNEY, June 28 (Reuters) – The country’s GDP will likely be impacted by roughly A$2 billion ($1.5 billion) as a result of a two-week coronavirus lockdown in Sydney, Australia’s most populous city, while the tardy statewide vaccination rollout weighs heavily on the economy. Around 18 million Australians, or around 70% of the population, are currently subjected to some type of lockdown or coronavirus-related restrictions as officials battle illnesses in practically every state and territory. The vaccine distribution in Australia has been slower than expected, with just around a quarter of the population receiving at least the first dose, compared to more than 50% in the US and Singapore, and 66% in the UK. In a note headlined ‘New COVID ripple will impact but not derail economy,’ Sean Langcake, chief economist at Oxford Economics, said, “The outbreak plainly emphasizes that until the vaccine distribution is completed, the pandemic will remain a source of negative risk.” Langcake did not provide an assessment of the larger economic impact of Sydney’s current lockdown. The two-week Sydney lockdown is estimated to have cost the economy A$2 billion, or approximately 0.1 percent of annual GDP, according to Morgan Stanley and AMP. The state of New South Wales, whose capital city is Sydney, accounts for almost a third of Australia’s economic activity. After slipping into its first recession in three decades, Australia’s A$2 trillion economy rebounded significantly late last year, aided by early success in containing the pandemic and massive fiscal and monetary stimulus. However, the country has been afflicted by a series of tiny outbreaks since then, prompting governments and territories to impose temporary mobility restrictions or lockdowns. The newest coronavirus-related lockdowns in Australia, according to AMP senior economist Shane Oliver, suggest the country’s central bank would be “quite cautious” in July. On July 6, the Reserve Bank of Australia (RBA) will hold its next monthly meeting, and it is largely expected to announce a reversal of its stimulus policy, including a decision on future bond purchases. According to official predictions released on Monday, the coronavirus-induced border closures and lockdowns in Australia will have a long-term impact on government finances and population growth. The “Intergenerational Report 2021” of the Australian government predicts that the budget will be in deficit for at least another 40 years. (1 Australian dollar = 1.3184 dollars) (Swati Pandey contributed reporting, and Raju Gopalakrishnan edited the piece.) Continue reading
