Treasurer Josh Frydenberg is optimistic of a strong recovery from the widely expected economic contraction in the September quarter caused by the coronavirus lockdowns in Australia’s major states.
Consumer and business confidence has been buoyed by NSW emerging from a lengthy lockdown, as has the ACT, and Victoria is about to follow suit this week.
Queensland has also pledged to open its borders in December, a positive for its tourism industry in the summer months.
“We are pretty optimistic and confident of a very strong rebound in the December quarter and then into 2022,” Mr Frydenberg told an online Australian Chamber of Commerce and Industry conference on Tuesday.
The Westpac-Melbourne Institute leading index for September is released on Wednesday and may give a clue to the strength of the recovery.
It indicates the likely pace of economic activity three to nine months into the future.
In August, the index pointed to annual growth holding just above its long-term trend of around 2.8 per cent.
The Reserve Bank of Australia, the International Monetary Fund and the Organisation for Economic and Development are all forecasting economic growth of four to 4.5 per cent in 2022.
The minutes of the RBA’s October 5 board meeting released on Tuesday said the central scenario had the economy returning to its pre-Delta path by the second half of 2022.
“Nonetheless, members acknowledged that the recovery was likely to be uneven across the economy and that uncertainty would be a feature of the outlook for some time yet,” the minutes said.
There are also positive signs brewing for Australia’s labour market after last week’s figures showed a further 138,000 jobs were lost in September as a result of lockdowns.
The National Skills Commission will release its final report for September.
It preliminary figures showed job advertisements posted on the internet rose 4.9 per cent in the month.
This followed three months of declines as the result of Delta variant outbreak.