ECONOMIC FORECASTING – AUSTRALIA

Iron ore exporters flag $21b tax boost from port

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Original article by Brad Thompson
The Australian Financial Review – Page: 3 : 10-Jun-20

A report produced by ACIL Allen Consulting has assessed the economic contribution of the Port Hedland export hub. It estimates that the port and its supply chain injected some $54bn into the Western Australian economy in 2019 and supported one in every 12 jobs in the state. The report forecasts that iron ore production linked to Port Hedland will top 547.5 million tonnes in 2022-23, compared with 524.9 million tonnes in 2019-20. It also estimates that increasing shipments via Port Hedland would boost government revenue from taxes and royalties by $21bn over the next decade.

CORPORATES
ACIL ALLEN CONSULTING PTY LTD, PORT HEDLAND INDUSTRY COUNCIL, PILBARA PORTS AUTHORITY, BHP GROUP LIMITED – ASX BHP, FORTESCUE METALS GROUP LIMITED – ASX FMG, ROY HILL HOLDINGS PTY LTD

Less gloomy Treasury flags faster recovery

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Original article by Matthew Cranston
The Australian Financial Review – Page: 4 : 10-Jun-20

Treasury secretary Steven Kennedy has told a Senate inquiry that Australia’s unemployment rate is now likely to peak at around eight per cent as the economy begins to re-open and coronavirus lockdown restrictions are eased. The Treasury had previously forecast that the impact of the pandemic would cause the jobless rate to reach 10 per cent by June. Australia’s official unemployment rate is currently 6.2 per cent. Kennedy also said the impact of the pandemic on GDP growth will also not be as severe as initially forecast.

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AUSTRALIA. DEPT OF THE TREASURY

Depth of downturn less than expected

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Original article by Adam Creighton
The Australian – Page: 2 : 3-Jun-20

Australia has recorded a trade surplus of $19.2bn for the March quarter, and a current account surplus of $8.4bn. The result was driven by strong growth in export volumes and a fall in imports due to the impact of the pandemic. Meanwhile, the median forecast of economists is for GDP growth to have contracted by 0.4 per cent in the quarter, with official data to be released on 3 June. Reserve Bank governor Philip Lowe has suggested that the coronavirus-induced economic downturn may prove be less severe than initially expected.

CORPORATES
RESERVE BANK OF AUSTRALIA

Australia could avoid technical recession fate

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Original article by William McInnes
The Australian Financial Review – Page: 21 : 1-Jun-20

Most economists expect GDP data to be released on 3 June will show that the Australian economy contracted in the March quarter. However, five of the 24 economists polled by Bloomberg believe that Australia recorded positive GDP growth for the period, despite the impact of summer bushfires and the coronavirus pandemic. Phil Odonaghoe of Deutsche Bank expects the economy to avoid a technical recession, although David Plank of the ANZ Bank contends that this is moot given that nearly 20 per cent of Australians are unemployed or underemployed.

CORPORATES
BLOOMBERG LP, DEUTSCHE BANK AG, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Lowe urges paying subsidies for longer

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Original article by Patrick Commins
The Australian Financial Review – Page: 4 : 29-May-20

Treasurer Josh Frydenberg has reiterated that the JobKeeper wage subsidy scheme and the doubling of the JobSeeker allowance are temporary and targeted measures. However, Reserve Bank of Australia governor Philip Lowe has told a Senate committee hearing that there may be a case for extending some of the coronavirus stimulus measures; he has warned that withdrawing the fiscal stimulus too soon could hinder the economy’s recovery from the pandemic. Lowe also said that recent economic data suggests that the downturn may not be as severe as had been forecast.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, RESERVE BANK OF AUSTRALIA

House prices crash 30pc in doomsday scenario

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Original article by James Kirby
The Australian – Page: 20 : 14-May-20

The Commonwealth Bank of Australia has warned that house prices could fall by 32 per cent over the next three years if there is a prolonged economic downturn. This worst-case scenario is based on the unemployment rate exceeding nine per cent. CBA’s base case downturn scenario is for house prices to fall by 11 per cent. The bank has identified unemployment, underemployment, changes to income and house prices as the key drivers for the housing market.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Treasurer concedes coronavirus economic figures sobering as Australia faces largest deficit in history

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Original article by Brett Worthington
abc.net.au – Page: Online : 13-May-20

Treasurer Josh Frydenberg used an economic update on 12 May to advise of a blowout in the budget deficit. He revealed that the underlying cash deficit was $22.4bn at the end of March; this is nearly $10bn higher than the federal government had forecast in its mid-year Budget update in December. Frydenberg has not revealed the likely size of the deficit for 2019-20, but Chris Richardson of Deloitte Access Economics expects the next two budgets to feature the biggest deficits on record. Treasury expects GDP to fall by at least 10 per cent in the June quarter due the coronavirus pandemic, while household consumption is forecast to fall by about 16 per cent.

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AUSTRALIA. DEPT OF THE TREASURY

Two-year hangover from Covid

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Original article by Patrick Commins, Simon Benson
The Australian – Page: 1 & 2 : 12-May-20

KPMG has warned that the Australian economy will not recover its losses from the coronavirus pandemic until the September 2021 quarter. The firm’s research suggests that industries such as healthcare, public administration and civil engineering will have fully rebounded by the end of 2020, but the hospitality, accommodation, and retailing and sectors will not recover until March 2022. KPMG’s forecasts are based on expectations that the easing of lockdown restrictions will not result in any major virus outbreaks.

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KPMG AUSTRALIA PTY LTD

Recovery rapid but jobs must be saved

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Original article by Simon Benson
The Australian – Page: 5 : 11-May-20

A new report from Deloitte Access Economics forecasts that the coronavirus pandemic will reduce national income by 10 per cent, which equates to nearly $200bn. The firm also expects income tax revenue to fall by $14bn in 2020 and $37bn in 2021, and warns that the unemployment rate may not return to five per cent until 2024. Deloitte also expects the Australian economy to recover from the pandemic more quickly than other countries. Treasurer Josh Frydenberg will release an economic statement on the coronavirus on 12 May.

CORPORATES
DELOITTE ACCESS ECONOMICS PTY LTD, AUSTRALIA. DEPT OF THE TREASURY

Cost of Covid: $4bn a week

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Original article by Geoff Chambers
The Australian – Page: 1 & 6 : 5-May-20

Treasurer Josh Frydenberg will use a National Press Club speech on 5 May to warn that the coronavirus pandemic will reduce GDP by about $50bn in the June quarter. However, he will contend that the GDP hit could have been around $120bn if Australia had imposed the more restrictive lockdowns of some European countries. Frydenberg will add that economic activity will be reduced by nearly $4bn for every week that lockdown restrictions remain in place, and that the economic impact of the pandemic would have been much worse without initiatives such as the JobKeeper scheme.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY