Last Tuesday, the Reserve Bank Governor Philip Lowe outlined the Bank’s key economic forecasts.
He said restrictions are likely to be ‘eased’ from June and mostly removed by the end of the year. The impact forecast is:
- The economy will contract 10% in the first half of 2020, and 5% over the full year
- Unemployment will be 10% by June
- Growth will bounce back by 4-5% in the second half
- And growth will be 6-7% in 2021
- The cash rate will sit at 0.25% for the next three years
If you have a job, this is a rosy picture. For businesses, history has taught that confident operators who promote ‘confidence’ will attract customers while those that cut back will have a slow recovery.
Businesses that rely on volume of discretionary sales will continue to suffer.