Australia is one of just five nations – the others being Taiwan, China, Vietnam and New Zealand – who enter 2021 very well-placed economically, says a new study published by international business consulting firm Deloitte.
Covid numbers are very low, the vaccine news is excellent and confidence is rebounding. “We’ve got this,” enthuses the Deloitte Access Economics Business Outlook.
The study’s authors believe the state of Victoria is catching up to the recovery already underway elsewhere in the country; there are heartening developments in job markets and China’s trade war with Australia has – so far at least – actually added to national income rather than hurt it.
Damage is winding back fast, but hasn’t vanished
“To be clear, although the damage of 2020 is winding back fast, it definitely hasn’t disappeared,” Deloitte says.
“And it will linger: the enormous protection provided by the Federal Government is being dismantled rapidly, the world economy is a mess and the geopolitical backdrop for Australia looks more troubled than it has been for many years.
“Then again, a bit of perspective is handy. Australia has made many mistakes in juggling Covid. But so far we’ve made fewer mistakes than most of the globe. You’d rather be here than almost anywhere else.”
No lengthy jobs hangover, unlike past recessions
The study’s authors say today’s jobs recovery isn’t one your parents would recognise, given that past recessions in the country have left lengthy hangovers.
And although unemployment and underemployment in the country are much higher than they were pre-Covid, these key metrics are also improving much faster than previously anticipated.
“In the meantime the excellent news on vaccines will probably limit the longer-term damage to Australia’s population growth [and] migrants look likely to be back in reasonable numbers by mid-2022,” Deloitte says.
Economy looking much better than it could have
“To be clear, that doesn’t say everything’s great. But it does say it’s looking much better than it could have and Deloitte Access Economics forecasts the unemployment rate to be back down to 5.5% by mid-2023.”
The study says 2021 looks set to continue the recovery in sectors smashed by the lockdowns and border closures of 2020, allowing the likes of the accommodation, food, entertainment and airline sectors to continue to climb back from the abyss.
“And by 2022, tourists and foreign students will be here in greater numbers. Business conditions AV (after vaccines) will look very different to those BV (before vaccines),” the authors predict.
