And also that the Reserve Bank of Australia will hold onto its current taper plan.
Comments from Goldman Sachs on Australian economic (lack of) growth this current quarter:
- Gross domestic product is likely to fall 2% in the third quarter from the previous period, driven by weaker household consumption and construction activity
- The economy is then expected to expand 1.8% in the fourth quarter as restrictions are relaxed more gradually than in the past
GS go on with comments on RBA policy:
- The downside risks to Australia's macro-outlook have increased considerably since early July when the Reserve Bank of Australia announced the scheduled taper of its quantitative easing program
- Our base case is for the QE taper to proceed in September as scheduled (65% probability), but we continue to see a strong argument for the RBA to delay any (even if modest) withdrawal of policy support
- Revisions resulted in it cutting its 2021 forecast in annual averaged terms by half a percentage point to 4.2%. In turn, it boosted its 2022 estimate by 0.4 percentage point to 4.2%
On the (now) race to vaccinate, GS forecast:
- based on the current pace, that the share of adults with two doses will rise from 30% currently to the government's 70%-80% target by around mid-November
- While the improvement is encouraging, the experience of countries more advanced in the vaccine rollout raises a number of potential issues on the horizon
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Australia's two largest (population) states, New South Wales and Victoria and two largest cities (Sydney, capital of NSW and Melbourne, capital of Victoria) remain in lockdown.
