Business & Economy

Australia’s GDP expected to fall 3.75% this year due to COVID-19

Sydney, Australia, Jul 23 (efe-epa).- After nearly three decades of continuous growth, Australia’s GDP is expected to fall 3.75 percent in 2020 as a result of the crisis generated by COVID-19 pandemic, Treasurer Josh Frydenberg said Thursday.

The country is also expected to record the largest budget deficit in its modern history, estimated at some AU$85.8 billion ($61.3 million), during the fiscal year that ended on June 30, Frydenberg said in a statement.

In addition, it is predicted that for the year 2020-21, the deficit will hit AU$184.5 billion.

“Australia and the world are now experiencing the most severe economic crisis since the Great Depression,” Frydenberg told reporters. “These harsh numbers reflect the harsh reality we face. The economic outlook remains very uncertain.”

“Recent events in Victoria are a testament to this – a painful reminder how a setback in combating the virus can impact the speed and the trajectory of our national economic recovery,” he added, referring to the outbreak in Melbourne, with more than 400 new COVID-19 cases in 24 hours.

Unemployment will also rise to around 9.25 percent of Australia’s workforce by the end of the year, while net debt, expected to be at 24.6 percent of GDP this fiscal year, will rise to 35.7 percent of GDP for 2020-21.

The treasurer in the statement said “the Government has acted swiftly and decisively to provide economic support for workers, households and businesses of around AU$289 billion or the equivalent of 14.6 per cent of GDP.”

Frydenberg and Finance Minister Mathias Cormann delivered the analysis of the impact of the pandemic on the Australian economy, although the data they revealed is only a forecast. Final numbers will be revealed in October when the federal budget is released, which under normal conditions is announced in May.

Australia, praised for its health and economic policies to manage the effects of the pandemic, has seen its recovery plans slowed down by the outbreak in Melbourne, where infections have exceeded 4,000 cases since the beginning of the month.

Those infected so far in July account for just under a third of the total number of confirmed cases since the start of the pandemic nationwide, some 13,300, including 133 deaths.

The authorities of the state of Victoria, with 6 million residents and economic activity representing 25 percent of the country’s economy, have imposed a second lockdown in Melbourne and rural Mitchell Shire until Aug. 20 due to the outbreak.

The rebound has also led to the closure of internal borders, with that between Victoria and New South Wales, the main Australian state in demographic and economic terms, shut for the first time in nearly 100 years.

In New South Wales, dozens of cases linked to the Melbourne outbreak have also been detected since the beginning of the month, although few or no cases of COVID-19 have been registered in the rest of the country for weeks. EFE-EPA


Related Articles

Back to top button