The Australian economy has bounced back from the COVID-induced economic downturn faster and stronger than all expectations.
While KPMG anticipate job losses will occur as a consequence of the wage subsidy programme ending, we are not expecting to see job figures ‘falling off a cliff’ next month either.
KPMG anticipates the ending of the JobKeeper program will add to the pressure of those marginal workers and businesses that are still struggling in this coronavirus-impacted economy.
KPMG forecasts a global rise of 4.4 percent in GDP this year. But there is a big caveat. So much is dependent on the speed and success of international vaccine distribution.
Overall, we believe the unemployment rate will stay around its new level for the next few months as the economy consolidates and handles the transition out of high levels of government support to the business sector.
Even with the current surge in house prices, the RBA has not changed the cash rate today – no surprise, given it has been signalling rates could stay at historically low levels until 2024.
Given last week’s stronger than expected capital expenditure figures, we are upgrading our forecasts for this week’s Q4 GDP figure to 2.3 percent.
The ABS data shows the Australian labour market, and hence the Australian economy, took a slight pause in its recovery during January in response to the additional lockdown procedures implemented over Christmas.
As expected, the RBA kept its settings unchanged, and we do not anticipate any movement in the near future.