The Index growth rate remains in deep negative territory consistent with recession.
However, it appears to have bottomed out in April at -5.61% and, without the recent disaster in Victoria, it seemed certain that the June quarter would have marked the low point in the growth cycle.
Victoria represents around 25% of national output. We expect the hard lockdown following the renewed virus outbreak to see the Victorian economy contract by 9% in the September quarter. That will offset the ongoing recovery we expect to be unfolding in other states as they continue to reopen, albeit at varying speeds.
For Australia overall, we expect growth in the economy to be flat in the September quarter before lifting by 2.8% in the December quarter on the assumption that Victoria moves through Stage 4 to Stage 2 and the other states avoid ‘second wave’ outbreaks.