Thursday, March 4th, 2021
Looks Great: A file image showing an employee making changes to a customer in a mall. According to the Australian Bureau of Statistics, the economy picked up 3.1% in the three months to December. – Bloomberg
SYDNEY: Australia’s economy expanded much faster than expected in the final quarter of last year, and all indications are that 2021 has started on solid foundations, also supported by massive monetary and fiscal stimuli .
The economy picked up 3.1% in the three months to December, data from the Australian Bureau of Statistics showed. It was above projections for a 2.5% increase and followed an upwardly revised increase of 3.4% in the third quarter.
Despite the best consecutive growth quarters, annual production was still down 1.1%, which underscores the chaos caused by the coronavirus pandemic, suggesting the A $ 2 trillion ($ 1.57 trillion) economy will continue to require political support.
The Australian dollar rose about roughly, according to the data 10 pips to a daily high of $ 0.7836 as bond futures plunged down on the three-year contract that implied a return of around 0.3% versus the official 0.1% cash rate. « The ‘V- The Shape of Recovery is everywhere – economic growth, labor, retail spending and housing, » said Craig James, Chief Economist at CommSec in Sydney.
Big bank credit and debit card spending data and official retail sales figures , Employment and construction activity point to a good start to this year.
Marcel Thieliant, economist at Capital Economics, expects GDP growth of 4.5% pandemic for 2021. “Australia’s economy has outperformed its rich world counterparts thanks to very low community transmission of Covid-19 along with massive and timely fiscal and monetary stimulus.
Economic output declined 2.5% in 2020 , well under 10% in the UK, 9% in Italy, 5% in Canada and more than 3% in the US.
« Our stimulus plan is working, and today’s national accounts are evidence of that, » said Treasurer Josh Frydenberg in a press conference. « The job is not done, » he added.
« We have challenges ahead. But you don’t want to be in any country other than Australia by the start of 2021. «
To mitigate the economic shock from the pandemic-induced standstill, the Reserve Bank of Australia (RBA) cut interest rates three times last year to a record low of 0.1% and launched an unprecedented quantitative easing program.
The Government announced a wage subsidy system to keep people in the workplace while banks postponed home loan payments and cut lending rates to fuel credit growth.
On Tuesday, the RBA again pledged to keep three-year yields at 0.1 % until their employment and inflation targets are met, which policymakers don’t expect until 2024 at the earliest. Yesterday’s data showed that there was little domestic inflation in the economy with the biggest price increases from commodity exports.
The RBA did repeatedly stated that the unemployment rate has to fall from now over 6% to around 4% in order to increase wages f to drive above 3% and bring inflation back into its target range of 2% to 3%. – Reuters
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