News

Australia is already recovering out of recession according to the RBA

28 October 2020

The Reserve Bank says Australia has already started to exit its recession and the lockdowns in Victoria haven’t affected the national economy as much as first feared.

Our central bank has forecast positive growth in the September quarter after we recorded two successive quarters of negative growth and the first recession in nearly 30 years.

RBA governor Guy Debelle said the country had performed well outside of Victoria.

“The strength elsewhere in the country was more than the drag from Victoria,” he told Senate estimates this week.

“Possibly the drag from Victoria was a little less than we guessed back in August.

“Our best guess is it looks like the September quarter for the country recorded positive growth rather than slightly negative.”

While the news around the recession is positive, Mr Debelle said there was still obviously a lot of uncertainty in the economy still.

“The range of uncertainty around the numbers at the moment is as large as it has been in my career,” he said.

“We are having a lot of trouble trying to understand where we are, let alone where we are going.”

Mr Debelle gave no indication on whether the RBA would again cut interest rates at their next metting.

RBA assistant governor Michele Bullock also said many challenges remain.

“The COVID-19 pandemic has had a devastating effect on the world and the Australian economy,” she told the Chamber of Commerce this week.

“The economic recovery is expected to be unpredictable and uneven so there will be rising business insolvencies and problems for some households in servicing their debts.”

Ms Bullock said one major concern was the possibility of more households being unable to meet mortgage repayments because of falling incomes.

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