The AUD GBP exchange rate was -0.12% lower on Thursday after surrendering early gains. The Australian treasurer Josh Frydenberg is hopeful of a swift recovery based on Australian’s savings. However, the IMF has downgraded its forecast for the Asian economy.
The AUD GBP exchange rate is trading at 0.5425 as the Aussie seeks to continue its recovery.
Australian Treasurer Frydenberg sees economic “bounce back” as lockdowns end
The Australian economy will “bounce back” quickly, with Australians having accumulated 250 billion AUD in savings during the lockdowns, Australia’s Treasurer Josh Frydenberg said on Wednesday.
“And we know that the Australian economy will rebound strongly as a result of the economic support that we have put in place and as a result of the restrictions easing across the country,” he added.
“Expect Australia’s gross domestic product (GDP) to fall by three percent or more in the September quarter due to more than half the population being locked-down in Sydney, Melbourne and Canberra.”
“The sharp economic downturn put the cost of the strict restrictions at approximately two billion Australian dollars per week. “We are seeing a light at the end of the tunnel as vaccination rates rise,” Frydenberg said. “Vaccines are the cheapest form of economic stimulus available.”
Meanwhile, the International Monetary Fund (IMF) revised down its 2021 economic growth forecast for Asia to 6.5%, down by 1.1% from its April forecast, according to a regional economic outlook report.
“The resurgence of the pandemic, amid initially low vaccination rates, slowed the recovery in the Asia-Pacific region, especially in emerging market and developing economies,” Chang Yong Rhee, director of the IMF’s Asia and Pacific Department said.
For developed economies, the IMF forecast is largely unchanged for 2021 with upgrades in South Korea and New Zealand and downgrades in Japan and Australia, according to the report.
Deloitte sees Aussie economy lagging its peers in new index
Accountancy firm Deloitte said Australia is complacent and is not guaranteed the same success over the next 50 years as it faces challenges coming out of the pandemic.
The report said that major structural changes were being enacted in the global economy and Australian politicians and business leaders were urged to adapt to compete in a more complex and fragmented world.
“Out of uncertainty and volatility, we have the opportunity to shape a new future for Australia,” Deloitte Australia chief executive Adam Powick said.
The latest outlook is part of Deloitte’s new economic sophistication index that ranks countries based on their value add to the goods and services chain and how well their industries are connected to global supply chains.
Germany is top of the table, followed by Britain, while Australia lags far behind 37th.
“It’s a shock to realise we aren’t doing as well as we think we are,” head of Deloitte Economics, Pradeep Phillip, said.
“With half a century of hindsight, it’s little surprise that we have an economy characterised by low manufacturing capabilities and missed opportunities from not commercialising our strong research.”
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