Frydenberg: Year to forget for Australia

Treasurer, Josh Frydenberg, has described 2020 as a ‘year to forget’ for Australia as the unemployment reaches a 19-year high of 7.1%.

Speaking at a Bloomberg conference, Frydenberg said it had been a difficult year as a result of the COVID-19 pandemic but that he was more optimistic than the official Organisation for Economic Co-operation and Development (OECD) and International Monetary Fund (IMF) forecasts.

“The OECD and IMF are being a bit pessimistic about the global economy in this calendar year. OECD has forecast a fall of 6.1% this calendar year which is a big drop but it will be a bit less in Australia at 5% and then we can expect growth of 4.1% next year.

“I think there are some sectors that will recover faster than others as a result of the international border closures but that will be helpful for the economy next year after a year to forget this year.”

Unemployment figures reached 7.1% in May, up from 5.3% in March and the highest figure in 19 years, after numerous sectors such as arts, hospitality and retail saw job cuts as a result of the pandemic, with total job losses since March reaching over 835,000. The previous high point was 7.2% in October 2001.

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While Frydenberg admitted unemployment would rise, he disputed that it could reach double-digit figures in the coming months. The 8% rate forecast for September quarter was down from figures as high as 10% earlier this year.

“Unemployment will get higher in the coming months, we are forecasting 8% for the September quarter but there are also more people coming back to the workforce as restrictions are eased which is a good thing.”