$69 postpage LB

Earlier vaccine rollout to rev up Australian recovery

  • December 03, 2020 02:02 PM AEDT
  • Hina Chowdhary
    Director, Equities Research Hina Chowdhary
    1394 Posts

    Hina Chowdhary is the Director, Equity Research at Kalkine and has an extensive experience of about 15 years in the area of Research, which includes 5+ years in Equities Research particularly.She has earned a Master of Science degree from the renowne...

Earlier vaccine rollout to rev up Australian recovery

Summary

  • Australian economy has outperformed other countries and has recorded a GDP growth rate of 3.3%.
  • Stringent policy action by the RBA coupled with fiscal aids and job creation initiatives have led to a growth rate of 3.3% in the Australian GDP.
  • If vaccine rollout starts 6 months before expected, then Australian economy could benefit by $34 billion.
Gold MTF non-AMP

The Australian economy has managed to fare well in this stressful time by coming out of its first recession in nearly 30 years. With a GDP growth rate of 3.3% in the third quarter, Australia has started on its journey towards economic recovery. Treasurer Josh Frydenberg claims that a lot is still to be achieved before Australia is brought completely out of a state of peril.

Vaccine related developments might boost the Australian recovery even further. Treasurer Frydenberg stated that if the vaccine rollout were to be conducted 6 months earlier than expected then the Australian economy could benefit by A$34 billion.

CURBING THE VIRUS LINKED TO INCREASED GROWTH

Australia has outpaced many other countries like Japan, Canada, UK, Germany, France, and New Zealand in economic recovery. The improved forecasts for the unemployment rates in December came after strong and robust policy action by the Australian government.

Initiatives like JobSeeker and JobKeeper helped the economy recover, along with fiscal and monetary benefits. However, improvements to the vaccine timeline may further boost the economic recovery.

It is important to note that the Australian economy is still quite dependent on monetary and fiscal aids for its recovery. Thus, vaccine related news might not be sufficient to drive economic growth just yet.

The Organisation for Economic Cooperation and Development urged the government to continue monetary and fiscal policies currently in action. However, treasurer Josh Frydenberg stated that the JobKeeper wage subsidy would stop by the end of March, while other policies would continue to remain in action.

RELATED READ: RBA Monetary Policy Decision: No Changes to Policy Setup

The Intensifying Dispute With China Affecting Economy Further

Australia and China have both joined hands in the Regional Comprehensive Economic Partnership (RCEP) Agreement. However, little seems to have changed between the diplomatic ties of the countries following this decision.

ALSO READ: Will RCEP bring a thaw in Australia-China trade relations?

The relationship between the two countries were threatened more when a Chinese official shared a fabricated image suggesting violence by Australian soldiers. An emergency meeting was called by Prime Minister Scott Morrison to address this issue as it was condemned by Australian authorities.

Australian economy is largely dependent on trade and on its exports. While China forms one of the biggest markets for exports of iron ores from Australia, current tensions have caused a severe blow to the Australian exports.

IN CASE YOU MISSED:  What can Australia do about its relationship with China?

 


Disclaimer
The website https://kalkinemedia.com/au is a service of Kalkine Media Pty. Ltd. (Kalkine Media) A.C.N. 629 651 672. The principal purpose of the content on this website is to provide factual information only and does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stock of the company (or companies) or engage in any investment activity under discussion. We are neither licensed nor qualified to provide investment advice through this platform. In providing you with the content on this website, we have not considered your objectives, financial situation or needs. You should make your own enquiries and obtain your own independent advice prior to making any financial decisions.
Some of the images that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed on this website unless stated otherwise. The images that may be used on this website are taken from various sources on the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image. The information provided on the website is in good faith, however Kalkine Media does not make any representation or warranty regarding the content, accuracy, or use of the content on the website.

 

   
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK