New virus lockdown is going to be a body-slam to whole of Australia economic growth
ANZ say that the Melbourne shut down will further shunt GDP lower, down a 1.5 to 2% on already poor what was expected.
- with the whole of Melbourne metropolitan and Mitchell local government areas locked down, we estimate the rebound in activity we are looking for in Q3 will be as much as 1.5-2.0ppt lower than we expected.
- This estimate reflects both the direct impact of the lockdown to around 20% of the economy, but also the impact on regional Victoria and on business and consumer confidence nationally.
- We also think there will be more businesses that decide they can't hold on during another lockdown and a flow-on impact to the labour market too.
Wait, it gets worse for the unemployed people in the community:
- We now see the unemployment rate rising to 7.7% in Q3 as the recovery in employment is delayed.
- The outlook beyond Q3 depends critically on the policy steps the Government takes. A number of options have been canvassed and we will gain clarity about the choices made on 23 July (if not before in some cases). Until then, our forecasts beyond Q3 are under review.
While AUD is subject to global sentiment I suspect it may underperform ahead.