Josh Frydenberg (left) with US Secretary of the Treasury, Steven Mnuchin, during a meeting of the IMF in Washington DC in 2019. Photo credit: Wikimedia Commons
Treasurer Josh Frydenberg says the Federal budget update confirms Australia’s economy is rebounding strongly and people are now back working, spending and moving freely across the nation.
In an opinion piece published in the Australian Financial Review, he said the updated numbers are encouraging and better than what was expected at budget 10 weeks ago. Unemployment is lower, GDP growth higher, and the bottom line has improved.
“But the road ahead is challenging. Our recovery is very much dependent on our continued success in containing Covid-19.” Frydenberg stated.
“Consumer and business confidence are back at pre-Covid-19 levels. Eighty five percent of the 1.3-million Australians who lost their jobs or had working hours reduced to zero at the start of the crisis are now back at work.”
In his opinion piece, the Treasurer stated that the September quarter had an increase in GDP of 3.3 percent – the biggest quarterly rise since 1976. Australia’s economic recovery from the Covid-19 crisis, he noted, is forecast to be faster than previous recessions.
The unemployment rate is expected to return to its pre-COVID-19 level in about four years – in contrast to the six years it took following the 1980s recession, and the 10 years it took following the 1990s recession.
According to this latest update, real GDP is forecast to grow 4.5 percent in 2021, following a reduction of 2.5 percent in 2020. This is an upgrade to the budget forecast of 4.25 percent growth in 2021, and a 3.75 percent fall in 2020.
“Australia is outperforming all of the major advanced economies. The euro area is forecast to contract 7.5 percent; Japan [by] 5.25 percent; and the United States [by] 3.75 percent this year,” Frydenberg said.
“We have come a long way from Treasury’s initial estimate early on in the pandemic that the unemployment rate could hit 10 percent by year-end, or 15 percent in the absence of JobKeeper.”