Treasurer Josh Frydenberg has warned the economy faces challenging times ahead with coronavirus lockdowns in the nation’s two major states placing jobs and companies at chance.
Economists are predicting the economy to contract by as a lot as four per cent in the September quarter as a outcome of the lockdowns in NSW and Victoria.
Victoria has flagged that its sixth lockdown will extend past Thursday, a further negative for the outlook.
The June quarter national accounts are released on Wednesday, that will explain how the economy was faring heading into this expected downturn.
There are issues the economy may already be in a technical recession ought to the June quarter outcome be a negative and given expectations for the September quarter.
Two consecutive quarters of contraction constitute a technical recession.
Asked on the Nine Network whether Australia is heading into a recession, Mr Frydenberg said the median market expectation is for a puny increase in economic increase.
“This may be line ball. Our economy faces some very challenging days ahead,” Mr Frydenberg said.
“The lockdowns in our two largest states are not fully costing jobs, seeing companies terminate, they are increasing our debt burden as successfully and having a toll on folks’s mental health.”
He again urged the states and territories to stick to the plan that will start to examine restrictions ease as soon as the vaccination rate hits 70 per cent for double-dosed Australians aged 16 and above.
At this stage economists’ forecasts centre on a 0.5 per cent expansion in the June quarter, a marked slowdown after the rapid recovery from last year’s recession considered in the earlier three quarters.
Nevertheless, forecasts range as low as a 0.1 per cent contraction.
“The optics can be bad, and information of another recession would not be legal for self assurance,” AMP Capital chief economist Shane Oliver said.
Economists will agency up their increase forecasts after a spread of quarterly stories over the next couple of days.
The Australian Bureau of Statistics will release its “industry indicators” file for the June quarter on Monday, which are expected to explain company profits rising by 2.5 per cent.
Industrial inventories – stock on shelves and in warehouses – are also forecast to upward thrust by one per cent.
International trade and govt finance figures for the June quarter are released on Tuesday.