Australia’s recession likely already over: BetaShares
The Government’s social distancing measures have likely caused the sharpest and the shortest economic contraction in history, just spanning March and April, according to Betashares.
Betashares’ chief economist, David Bassanese, said the extent to which a recession was defined as a period of economic contraction, “the good news is that Australia’s recession is likely already over”.
“That said, to the extent recession is defined as a period of subpar economic growth and persistent very high unemployment, then challenging times will likely persist for at least another six months to one year,” he said.
“While we may see a short-term bounce in economic activity from depression conditions as social distancing restrictions ease, the ongoing risk of second waves likely mean global business and consumer spending settle back to a quite subdued pace over the following months thereafter.”
Bassanese noted that the economy was already struggling before the COVID-19 pandemic as a result in a downturn in housing construction, weak business investment, and tapped out consumer spending. The pandemic, he said, had only exacerbated the issues.
“While the RBA may still be tempted to flirt with negative interest rates if the Australian dollar strengthens further, its perhaps better off pleading with other central banks not to pursue this zero sum game of competitive currency depreciation,” he said.
“It’s not helpful to the banking sector and risks further inflating a dangerous bubble in equity market valuations.”
Recommended for you
Sharing his reasoning in joining the FSC board, WT Financial chief executive, Keith Cullen, believes “product and advice cannot be separated” from each other in the current environment.
The Emerge Foundation, a charity run by financial advisers and fund managers, has announced a scholarship program to help veterans transition into tertiary education.
In an open letter, Sequoia chief executive Garry Crole has hit out against shareholders “with a personal axe to grind” as he fights for his job ahead of an EGM.
The JAWG has announced it is in talks with Treasury around five “core principles” to strengthen the education standards for new entrants to the financial advice space.
