Forecast update in light of the Melbourne/Mitchell lockdown and fiscal update: #GDP rebounds in Q3 but by less than prior forecast. A fiscal cliff then looms, with GDP expected to contract in Q4. #Unemployment to rise >8% by year-end. #ausecon @felicity_emmett @cfbirch pic.twitter.com/nFizmbSMLN
— ANZ_Research (@ANZ_Research) July 30, 2020
- Forward GDP indicators have bounced back vigorously out of lockdown. That’s great news, and to some extent expected given the low base – but how long will it last?
- There are a number of temporary factors supporting the bounce, including pent-up demand, unseasonably strong domestic tourism during the colder months, and temporary income support and job retention measures.
- High-frequency economic indicators may remain on a stable to improving trajectory into September, but our analysis suggests that by November at the latest the mood is likely to turn. By then, some temporary supports expire and the impacts of a closed border will become more acute.
- Uncertainty is extreme. And while not our forecast, we think there is a material risk that the economy enters a double-dip recession from Q4 2020.
The only issue I have that analysis is that it is a double-dip depression not recession.
They have not added the growing housing crash.