The global economy is currently experiencing a crisis due to the Coronavirus (COVID-19) outbreak. Many countries including Australia will experience a recession due to the Great Lockdown. Currently, the situation on the effects of the economy is still unpredictable as the pandemic has not reached its peak yet.
Governments are providing households as well as businesses with financial help to relieve economic burdens. The world is currently working together closely on preventing the virus spread as well as widespread or financial losses layoffs and bankruptcies. The global crisis will not leave any country unaffected and even the most advanced economies as Australias will suffer.
How strong is the economy?
Before the Coronavirus outbreak, Australia had successfully maintained 28 years of uninterrupted annual economic growth. The country was a reliable and safe environment to conduct business. Australia has always had the ability to respond to global changes maintaining steady growth. Unfortunately, it is expected that both advanced and developing economies will experience a recession in the year of 2020. Unemployment will continue to grow as the businesses are forced to shut down for an unknown period of time, unable to pay salaries to their employees. Australia is expected to suffer its first recession since 1991. Australia among other countries is reliant on tourism, travel, and entertainment, unfortunately, all of these fields will be greatly affected in 2020 as well as the first quarter of 2021.
How is the Australian economy doing?
Australia will experience its first recession since 1991 as the Coronavirus outbreak has disrupted the economy as well as healths and lives of many people. Australia is predicting large budget shortages, as the money will be used to provide welfare payments and reduced taxes. Health authorities anticipate that the virus will not slow down for a few more months affecting healthcare, education establishments as well as the world’s economy. Property prices have gone down and the housing market including construction activity will be amongst those who are affected. As some of the sectors are suffering some are flourishing, supermarkets are recruiting thousands of new employees to help to cope with the high demand.
This recession has been done deliberately in order to avoid the spread of the virus and Australia is ready to do everything it takes to recover as soon as possible.
It is estimated that the pandemic will last until the 3 rd quarter of 2020 and the economy will only be able to start recovering in 2021.
Is Australian economy in trouble?
Household debt, unemployment, and many lives in danger are only a few things that have resulted from the Coronavirus (COVID-19) outbreak. All major economies have been hit and the year 2020 will be one of the hardest years in the history of the economy. In order to contain the virus spread the largest sectors of the economy have been shut down sending Australia to the recession that has not been experienced in almost three decades. It is predicted that unemployment could reach 15 percent within the next few months that will leave 2 million people without an income. Sectors that will suffer the most will be – hospitality, entertainment, tourism, and arts. It has been estimated that the economy will shrink by 3 percent this year, although it is hard to predict as the virus has not yet reached its peak.