The country’s biggest bank and top analysts are warning the Sydney lockdown will shrink the national economy and could leave thousands unemployed, with some predicting the restrictions will be extended beyond the extra two weeks announced on Wednesday.
“The total hit to GDP in 2021 would be around 0.4 per cent because the lost production over the September quarter represents a permanent loss in output,” he said. He also expects a small increase in the national unemployment rate.Treasurer Josh Frydenberg told the ABC on Tuesday evening the impact on the economy would be “significant”, with Treasury estimating the cost of the Sydney lockdown at $700 million a week. Treasury declined to comment beyond this statement.
“Although there is a growing risk the economy now goes backwards in September, we have increasing evidence that the bounce back [after restrictions] is pretty good,” Mr Richardson said. Westpac chief economist Bill Evans said concerns around the virus outbreak and NSW restrictions were not “spilling over” to the rest of the country at this point with the index improving elsewhere.
He said while the Sydney lockdown has started earlier in terms of the flow of new daily cases, they are “assuming the lockdown is extended to mid-August, taking it to seven weeks” due to the more contagious Delta variant and the time it will take to reduce the spread.At a cost of $7 billion for this extended lockdown, he said GDP growth would “flatten” this quarter down from the 1 per cent quarter-on-quarter growth expected ahead of the latest outbreak.
JennieDuke Maybe say thanks to community transmission of COVID.
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