SYDNEY, AAP – Australia can expect a rebound in the economy as the lockdown states of NSW, ACT and Victoria gradually reopen on the back of ramping vaccination rates.

But the longer-term outlook is uncertain given the risk of more serious outbreaks of COVID-19 here and abroad, the central bank says in its latest review of the banking system.

“With rapid progress in vaccinations, it is expected that output will rebound as the economy gradually reopens, reducing the risk to the financial system,” the Reserve Bank of Australia said on Friday.

“But with most of the global population yet to be vaccinated and infections widespread, there is a risk that new highly infectious or even vaccine-resistant variants could emerge, making the outlook for the economy and the financial system highly uncertain.”

The RBA noted households and businesses were generally in a strong financial position before the latest outbreak of the Delta variant in June.

This was because most had “substantial” assets to meet or stay ahead of their debt repayments.

“There has been an increase in applications for loan payment deferrals and other support due to the current lockdowns, but these remain well below levels seen earlier in the pandemic in 2020,” it said.

The bottom line, according to the RBA, was that Australia’s financial system had shown resilience throughout the pandemic.

The RBA’s Financial Stability Review is published twice a year.