📈 Australia’s economic recovery plans see through Omicron scare – December 2021 📈
With Australia’s economy preparing to open up for the unvaccinated on the 15th of December, the Federal government is warning states to stay open to prevent another dip in economic recovery. Frydenberg is gearing up to deliver his MYEO and has revealed that the GDP figure would be better than the budget predicted with business investment up 16% and upticks in household consumption. Whilst the Omicron variant has created a source of uncertainty across Australia, complete state-wide lockdowns or lockouts have been ruled out as to prevent any ‘overreactions’ of border closures. Consumers have remained positive with sentiment restoring quickly, evidenced by the weekly ANZ-Roy Morgan consumer confidence index rising 1.4% to a one-month high, whilst the inflation expectations index rose 1% to 4.9%.
Australia’s central bank has left monetary settings unchanged at 0.1%, mentioning the accommodative policy is required to push unemployment low enough to drive wages higher. The labour market is still plagued by the shortage of skilled workers to meet job vacancies and the rising demand for labour. In 2022, there is an expectation of additional 120,000 workers entering the labour force with the international borders gradually easing up. The RBA has predicted a strong return to economic recovery and mentioned the Omicron variant wasn’t expected to derail the recovery. Philip Lowe’s upbeat statement indicates a greater chance that the RBA will scrap its $4bn quantitative easing program in the first meeting of 2022. The IMF is forecasting the Australian economy to grow by 4.1 per cent in 2022 after 3.5 per cent in 2021.