Covid lockdowns, slow vaccination to threaten Australia’s economic recovery – Reuters poll

According to the latest Reuters poll of economists, the Delta covid strain flareups-led renewed lockdowns are likely to negatively impact the Australian economy this quarter.

Key findings

“While only three economists in the July 7-20 poll expected a contraction this quarter, the consensus pointed to a sharp downgrade. Growth is now forecast at 0.1% on a quarter-on-quarter basis compared with 0.9% predicted in an April poll.”

“It would be the weakest growth since the Australian economy emerged from the recession a year ago. Forecasts ranged between -0.6% and 0.8%.”

“The economy was expected to grow 1.1% next quarter, compared with 0.8% in the last poll. Growth is forecast at 4.9% annually this year, the fastest pace in more than two decades. But it is expected to ease to 3.3% next year and then to 2.9% in 2023.”

“When asked what was the biggest risk to the economy this year, 10 of 14 economists said a slow vaccination rate. The remaining four flagged a spread of new COVID-19 variants.”

• AUD/USD drops back towards 0.7300 on Aussie Retail Sales, coronavirus woes