While Greater Sydney are now weeks into an extended lockdown that will last until at least 31 August, and Melbourne have this week gone into a seven-day lockdown, Philip Lowe believes the situation is different to last year when the whole country was in lockdown due to the COVID-19 outbreaks.
“I’m optimistic about next year,” Mr Lowe said during a House of Representatives standing committee on Friday.
“We’ve got to traverse a difficult few months. When there’s a great deal of uncertainty about how the economy is going to travel over the next few months and much depends on the health situation. But the experience here and elsewhere is that once the health situation is brought under control, the economy bounces back quickly.
“There’s been remarkable resilience demonstrated by Australian households and businesses and I think we can look forward... to once again strong growth next year.”
Mr Lowe added that talk of another recession is “unlikely” saying: “It's important not to lose sight of the fact that not all of Australia is affected. Significant parts of the Australian economy are still on a positive trajectory that was in place before the outbreak.
“I think it’s quite unlikely that we’ll have two quarters with negative GDP.
“The September quarter will surely be negative... but by the end of the year, many of us will be vaccinated, one hopes the restrictions are being eased late in this quarter and into the next quarter. And as restrictions are eased, the economy should start its recovery.”
Mr Lowe’s comments come after RBA made its call on the official cash rate for August on Tuesday.
Neil Griffiths
Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.
Neil is also the host of the ifa show podcast.
