Many policy experts and corporate executives have been predicting a V-shaped recovery from coronavirus, i.e. a quick recovery in the economic growth after a steep decline. It implies that the recession lasts only a few quarters before the economy returns to growth to pre virus levels. Also, a U-shaped recovery is like V-shaped recovery with a mere difference that it lasts longer.
1. Easing lockdown - As lockdown measures are relaxed, people will actively start looking for work that is expected to lift the economy.
2. Stability in hours worked - Economists are of the view that the most terrible of coronavirus economic contraction unemployment is over with the JobKeeper subsidy helping in increased employment in the arts, recreation and hospitality sectors.
3. JobKeeper savings can help fund stimulus - A recent announcement by Treasury that JobKeeper Payment will cost only $70 billion instead of the original forecast of $130 billion has freed up some funds for the government.
4. Treasury expects major collapse in employment over in June.
5. Substantial fiscal support - Dr Kennedy asserted that fiscal policy would play a central role in getting the economy back to full employment levels. He added that it will now be more about the demand and consumer sentiment as the economy reopened
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There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.
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