The International Monetary Fund (IMF) has forecast Australia’s economy will be one of the worst-hit from the COVID-19 pandemic in the Asian region, contracting by 6.7% this year.
“This crisis is like no other,” the report warns.
“It is very likely that this year the global economy will experience its worst recession since the Great Depression, surpassing that seen during the global financial crisis a decade ago.”
Overall, the organisation is predicting the global economy with shrink by 3% in 2020 – more than during the Global Financial Crisis (GFC) – with advanced economies – such as Australia – bearing the brunt.
Unemployment in Australia is tipped to reach 7.6% this year and grow to 8.9% in 2021.
However, the figures also suggest that – provided the pandemic eases in the second half of the year and restrictions are gradually lifted – the domestic economy will rebound by 2021, growing by 6.1%.
The report underlines the need for careful policy making to head off even worse economic results.
“Necessary measures to reduce contagion and protect lives will take a short-term toll on economic activity but should also be seen as an important investment in long-term human and economic health,” it said.
“The immediate priority is to contain the fallout from the COVID-19 outbreak, especially by increasing health care expenditures to strengthen the capacity and resources of the health care sector while adopting measures that reduce contagion.”
That suggests shoring up Australia’s resources – including its capacity to care for its elderly.
Could this be the opportunity to re-shape the aged care system now for the future?
