Five reasons why this downturn and subsequent recovery are different

Where are we in the Australian recovery now?

Shane Oliver, Head of Investment Strategy and Chief Economist

Key points :

  • This economic downturn and recovery differs from those of the past in that: the downturn was driven by a government shutdown; fiscal and monetary support has been faster and bigger; forced asset sales have been headed off; it’s dependent on containing coronavirus; and it’s seeing more rapid structural change.
  • As a result, we have been seeing almost “deep V” downturns and initial rebounds but the subsequent part of the recovery will be bumpier and slower.
  • Australia’s recovery is likely to pick up pace again with the reopening of Victoria and should benefit from better control of the virus, better stimulus and the faster recovery in our major trading partners.

 

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