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Commonwealth Bank of Australia Predicts 2021 Economic Recovery
11th January 2021
The Commonwealth Bank of Australia’s (CBA) chief economist Stephen Halmarick has mapped his economic expectations for 2021, explaining that whilst 2020 was likely to be the poorest year for the global economy since World War II, 2021 is predicted to see a much-improved economy for Australia.
Mr Halmarick stated: “We do expect a solid recovery in 2021, with global growth forecasts at 5.2 per cent – led by the US and China.
“In the US, there remains a number of political risks ahead. But assuming Joe Biden is sworn in as the 46th President of the United States on 20 January 2021, we expect him to focus on a few key policy priorities that should support the US economy throughout 2021 and beyond.”
Mr Halmarick outlined that one of the most significant consequences of the pandemic had been the effects it had had on monetary policy.
“The recession, the rise in the unemployment rate, the global economic environment, and the expectation that inflation will remain below the 2 to 3 per cent target range for years, has seen monetary policy in Australia enter unconventional space for the very first time,” he said.
Although the COVID-19 pandemic was set to have grueling effects on our national economy, the impacts were not as severe as first predicted, as Australia managed to regain control of the spread much more successfully than other countries.
“Australia has done a better job than just about any other nation in controlling the spread of the virus,” Mr Halmarick said.
“This, combined with fiscal and monetary policy support being provided to the economy, and the role played by the Australian banking system, means the economic impact of COVID 19 has been less severe in Australia than many other nations, and less severe than initially expected.”
Even though 2020 marks the first year in 30 years where Australia has plummeted into a recession, it could have been much more devastating. We are already starting to see positive improvements, with the decrease in unemployment and the gradual return to a new normality, the future of Australia is looking promising.
Written by Sophie Cunningham; 11th January 2021
