RBA Ellis, Assistant Gov
- says to maintain accommodative policy for as long as required
- now think recovery to be more protracted, progress on unemployment will be slower
- says more spare capacity in labour market than unemployment rate suggests
- says monetary and fiscal policy need to pull together
- says monetary policy measures are working as intended
- says Victoria lockdown will reduce growth in q3, push out recovery beyond that
- says expect unemployment rate to continue to rise over rest of this year
- surprising that government support meant household income has not fallen in aggregate
- estimates household consumption fell over 10% in first half of year
- says GDP will probably take several years to return to pre-covid trend path
- many businesses across Australia have put investment plans on hold
- spare capacity, sluggish labour costs to put downward pressure on inflation for some time
- baseline scenario assumes infection rates in Australia subside, no more lockdowns
- baseline assumes borders remain closed until at least the middle of next year
Headlines via Reuters, bolding mine. Not a lot of optimism from Ellis, given the baseline forecasts that is probably about correct.
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