The AFR’s economist survey for the March quarter is out, with the median forecast of economists predicting the Australian economy will contract by 3.9% in calendar 2020 and by 1.1% in the year to 30 June. The quarterly survey of economics also shows that the economy is expected to contract by 1.5% in 2020-21, while economic growth is not forecast to rebound from the coronavirus until the end of 2021. Meanwhile, economists generally expect the unemployment rate to peak at 8.5% by the end of June 2020, compared with 5.1% currently:
Two straight quarters of negative growth are widely regarded as the definition of recession, something Australia hasn’t experienced since 1991. It won’t be until the end of 2021 that the economy will move back into growth. The median forecast for the end of 2021 is for a rebound to 3.20 per cent.
Every economist in the survey expects the unemployment rate to rise significantly from its current level of 5.1 per cent, and the median forecast is that the rate will hit 8.5 per cent by the end of June. The jobless rate is expected to fall back slightly by the end of the year, to 8 per cent.
