The deputy governor of the Reserve Bank of Australia, Guy Debelle, said the 12-week lockdown in Victoria will not hinder Australia’s recovery from the first economic recession in more than 30 years.
He said: “At present, the best guess is that it looks like Australia’s economic growth in the second quarter was positive, rather than slightly negative.” The RBA predicts that the gross domestic product (GDP) dropped by 7% following the previous quarter After that, the gross domestic product (GDP) in the second quarter of this year will continue to turn positive. Technological recession refers to two consecutive quarters of negative GDP growth. Debelle said that government spending needs to continue until the unemployment rate can easily fall below 6%. The premature reduction of economic assistance will affect the economic recovery efforts. RBA is expected to announce at the board meeting next Tuesday whether it will further cut interest rates to ease the pressure on the economy.
Many economists believe that the Reserve Bank of Australia will lower its cash interest rate to 0.1% and implement further quantitative easing measures to help boost the economy.
