Dr Brendan Rynne, KPMG Chief Economist, comments on the Q2 GDP figures

With COVID-19 restrictions continuing in both New South Wales and Victoria the Federal Government is contributing to economic support programs in both states.

Understanding the economic impact of the current restrictions is very difficult, and comparing to past lockdowns is useful, but only to a point.

One of the conundrums of the COVID-19 era to many is why during a pandemic – with recession only having been staved off by mass government stimulus packages – house prices have been soaring.

The RBA Board has announced it will continue with highly accommodative monetary policy settings in the near term, albeit with a couple of the monetary policy levers notched back a step.

The underlying economic premise of this budget is one of turning the corner and focusing on a more prosperous and progressive future.

The statistics show that, as hoped for by the Government, the drivers of the economic growth are shifting away from  COVID-19 related government support spending to additional expenditure by businesses and households.

As anticipated, the Reserve Bank of Australia board today left the cash rate unchanged at 0.1 percent, despite increasing noise about an impending uptick in inflation and wages. KPMG believes…

KPMG expects the consequences of JobKeeper and other support packages ending will play out fully over the next few months.