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Give us a ‘V’ Posted on April 22, 2021
‘V’ for vaccine and ‘V’-shaped economic recovery. The V-word has had a polarising and exhausting effect on the nation. No matter what your position, the health and economic implications are significant. In this article, we focus on the latter.
The economic impact of a delayed rollout is an increased risk of spot lockdowns, and sustained restrictions on borders and travel.
As we know all too well, lockdowns cripple retail, hospitality, tourism, higher education, art and recreation, transport and mining industries. Lockdowns put pressure on the government for stimulus support and as Treasurer Frydenberg continues to remind us, every dollar spent from now is a borrowed dollar.
Like the rest of the world, the Australian economy tanked when COVID hit last year, but unlike other economies, we rebounded quickly in V-shaped format with GDP rising 3.1% in the December quarter.
The contributing factors can be first and foremost suggested to be consumer spending growth at or above 2.3%, followed by Government stimulus measures, especially JobKeeper, lower interest rates, private business investment up 3.9%, machinery and equipment spending up 8.9%, and residential investment up 4.1%. 93% of jobs lost in the peak of the COVID pandemic had been recovered by February 2021.
We’re in a good spot. The mere threat of lockdowns has a negative impact on consumer confidence which is why it is so critical to eliminate the threat. The only weapon in our arsenal, is the vaccine.
Source: Australian Bureau of Statistics, One year of COVID-19: Aussie jobs, business and the economy