CANBERRA, AAP – A leading economist has predicted an “excellent” recovery for the Australian economy through 2022, although much of the outlook depends on COVID-19 vaccination rates.
But Deloitte Access Economics partner and economist Chris Richardson says although the global backdrop is pretty good, China is suffering a sharp slowdown.
“The net impact of global economic developments on the Australian economy is turning down once more,” Mr Richardson says in his latest quarterly business outlook.
Even so, he expects Australia’s recovery from lockdown should be excellent next year as 80 per cent double-dose vaccination rates are reached across the country by December.
“Forecasts for everything from wages to unemployment to hospitalisation and haircuts depend on vaccination, he says.
Deloitte expects the economic growth to accelerate to 4.5 per cent in 2022 after a 3.2 per cent expansion over 2021.
The Australian Bureau of Statistics will release its labour force report for September on Thursday, which economists expect will show another sharp 120,000 fall in employment after the large 146,300 decline in August.
“The good news is rapid vaccinations have reduced the damage and job recovery should be great,” Mr Richardson said.
“But just how great will depend on how many people don’t get the jabs. Fewer jabs will equal fewer jobs. Absent further vaccine mandates, that could slow and cap the job recovery.”
However, a large lift in wages growth is still “miles off”, he says.
Shadow treasurer Jim Chalmers is unimpressed.
“After all Australians have sacrificed during this pandemic, their reward from Scott Morrison and Josh Frydenberg is slower wages growth for longer,” Dr Chalmers told AAP.
Mr Richardson expects international borders will re-open very gradually, which will keep overseas travel very weak in 2022 and may not return to pre-pandemic levels until 2024, or even 2025.
“We’ve been plenty spooked by COVID and that may keep flows over Australia’s borders on a tight leash for sometime,” he said.