Goldman Sach: Australia’s GDP to Shrink by 2% in the Third Quarter

Goldman Sachs (395.87, 2.30, 0.58%) Group said on Monday that Australia’s lockdown may cause severe economic contraction this quarter, and the highly contagious delta variant virus will slow the lifting of restrictions, which will put pressure on the rebound. .

Economists led by Goldman Sachs and Andrew Boak said that due to weak household consumption and construction activities, Australia’s GDP in the third quarter is expected to shrink by 2% from the previous quarter. With the gradual relaxation of restrictions, GDP is expected to grow by 1.8% in the fourth quarter.

Bock said: “Since the Reserve Bank of Australia announced the reduction of its quantitative easing program in early July, the downside risks to Australia’s macroeconomic outlook have increased significantly. Our basic assumption is that the QE reduction will take place as scheduled in September (65% probability), but We still believe that the Reserve Bank of Australia has strong reasons to postpone (even if modest) withdrawing policy support.”

  Goldman Sachs lowered its GDP growth forecast for Australia this year by 0.5 percentage points to 4.2%, and raised its GDP growth forecast for 2022 by 0.4 percentage points to 4.2%.

At the same time, Australia’s vaccine promotion is rapidly accelerating after its slow start. Goldman Sachs predicts that according to the current rate, by mid-November, the proportion of adults receiving two doses of the vaccine will rise from the current 30% to the government’s target of 70%-80%.