Julia Lee, Burman Invest’s chief investment officer (pictured), said the Australian economy was dealing with “a lot of pain” going into the end of 2020. The International Monetary Fund is forecasting an economic contraction of 6.7 percent for Australia this year
A financial expert has warned Australia faces “a lot of pain” for the remainder of 2020 as the coronavirus crisis hits twice as hard.
The International Monetary Fund predicted this week that Australia’s economy would contract by 6.7 percent this year.
In comparison, the global economy is expected to shrink by three percent in 2020.
This was announced by Julia Lee, Chief Investment Officer of Burman Invest sunrise Australia has been particularly dependent on Chinese demand for commodities such as coal and iron ore.
Export volumes were expected to fall as the coronavirus hit China, Australia’s largest trading partner, and the most advanced nations.
“Unfortunately, we are seeing a slowdown in global growth, which will hit Chinese demand,” Ms. Lee said.
“It has an impact on Australia. It’s about the global economy and how quickly you can lift these lockdowns.”
Ms Lee said border closures would also hurt the tourism industry and the overseas student market, adding the extent of the downturn would depend on the “trajectory of the virus” and how long the government-imposed lockdown on businesses would last.
Jobs numbers released on Thursday showed an unemployment rate of 5.2 percent in March, up from 5.1 percent in February.
Data from the Australian Bureau of Statistics was collected in the first half of the month before non-essential businesses such as pubs, clubs and gyms closed on March 23 to slow the spread of the coronavirus.
The Treasury Department expects the unemployment rate to rise to 10 percent by the end of June, a rate not seen since early 1994.
The Treasury Department expects the unemployment rate to rise to 10 percent by the end of June, a rate not seen since early 1994. Pictured is a Centrelink queue in Brisbane on 24th March 2020
Australia’s unemployment rate shot up to 11.2 percent in December 1992, even though the last recession in 1991 had actually ended 18 months earlier.
That was the highest unemployment rate since the 1930s, when at least one in five people was unemployed.
Excluding the $130 billion JobKeeper scheme, which provides $1,500 in two-week wage subsidies to six million workers, the Treasury forecast Australia’s unemployment rate at 15 percent.
Ms Lee agreed that without this stimulus package, Australia would have Great Depression unemployment rates.
Federal Treasurer Josh Frydenberg gave the IMF forecast a positive turn.
“The IMF projects that Australia will grow 6.1 percent in 2021, faster than the economies of the United States, Canada, Japan, France, Germany and the United Kingdom,” Mr Frydenberg said.
“Our actions are temporary, targeted and proportionate to the challenge we face and will ensure Australia strikes back stronger on the other side.”
Excluding the $130 billion JobKeeper scheme, which provides $1,500 two-week wage subsidies to six million workers, the Treasury Department forecast Australia’s unemployment rate at 15 percent – a level seen since the Great Depression of the 1930s years has not been reached. Pictured is an empty shopping mall in Canberra
