Via North West Strategy:
After the early surge in the activity post the lifting of initial nationwide lockdowns, the Australian economic growth recovery has been mixed since the resurgence of cases and fresh lockdown in Victoria. However, the COVID situation has now improved in Victoria and case growth has slowed down, setting the stage for a better Q3 outlook.
The country’s ties with China have helped its overall GDP growth in Q2 in comparison to global peers as Australia’s external account held up quite well. Although relations between both countries have soured over the past 3-4 months, we do not expect material escalation in trade tensions. Also the fall in tourism and education exports due to visit restrictions could be a drag in the future. The economic outlook in the short term looks better, though virus trends would eventually be the main game changer in a slightly longer term horizon, with fiscal and monetary policy playing a key role in providing support to the economy.
