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Australian central bank releases dire economic update

May 08, 2020

Sydney (Australia), May 8: Many Australians could still be jobless by next Christmas, the country's central bank warned in a dire economic outlook on Friday, as the impact of COVID-19 continued to be felt around the world.
In a Quarterly Statement on Monetary Policy, the Reserve Bank of Australia (RBA) predicted that unemployment would remain as high as 9 percent by the end of this year, and that the economy would contract by 6 percent.
According to the report, the RBA expects Australia's economy to contract by 10 percent over the first half of 2020, marking the country's first recession in nearly three decades, before beginning to recover in the second half of this year.
"In many other economies, the most intense phase of the contraction is likely to occur in the June quarter," the report said.
"Gradual recoveries should follow in the second half of the year, supported by the easing of restrictions and the significant expansion in both fiscal and monetary policies."
Like many countries, Australia initiated strict lockdown and social distancing measures to prevent the spread of COVID-19. However, with the number of confirmed cases relatively stable at over 6,800, the Australian government on Friday released a three-step plan to ease the restrictions in coming months.
A slower recovery in retail spending was expected, reflecting an expected hesitance by consumers to venture out, as well as a 17 percent slump in housing investment over the same period, which wasn't expected to return to positive territory until mid 2021.
The report pointed to China as being in a more advanced stage of recovery which has been impacted by the virus early than other countries -- noting that the country's economy experienced a bounce in industrial production and fixed asset investment spending.
Source: Xinhua News Agency