Australia has had it good in terms of the economy for the last three decades, but despite its natural resources, immigration and trade with Asia, it was not able to avoid the impact of Covid-19. As with many countries around the world, there have been serious negative impacts on the economy as well as on people’s well-being. Impacting everything from employment numbers, high return investments, general spending and more. This once so-called ‘Lucky Country’ might have avoided the crisis in 2008, but today it is officially in recession with two-quarters of negative growth coming consecutively. The country has not performed so poorly since the later 1950s in fact. The good times have been as a result of a combination of careful policy, political stability and from being popular with immigrants coming into fill in the gaps in the labour market. It was also a popular place for international studies.
Sobering new data
With every Australian facing the chaos and negative impact on their finances and on the economy some are wondering whether this sobering new data means the country is in for a long period of recession. Can Australia, its economy and those who make high return investments recover? There are people who have lost their livelihoods, had to receive government assistance and are still struggling.
There is hope
After the pandemic is dealt with, or better controlled with vaccinations, for example, Australia has a much more hopeful outlook than some other countries. If you compare it to Great Britain, their output fell 20% in the last quarter, so compared to that, Australia is coming from a better place. But the economic recovery and growth will not for a long time meet what it once was just a year ago. Things are tense with China, Australia’s main trading partner, and China too is seeing its economic growth negatively impacted.
Other issues have impacted the economy recently
It is not just Covid-19 that Australia is having to deal with either. The awful wildfires at the start of the year were catastrophic, and these fires are happening more frequently and getting worse each time. Having an impact on the economy, these are also a climate issue and put thousands of animals at risk. While the government is making promises and putting money into stimulus packages it is important to note that with this, the pandemic and the stagnant wage growth, Australia is going to have to face things are likely to get worse before the light at the end of the tunnel might be seen.
Conclusion
The fact is the world is facing the same problem, but because of where Australia was before, it starts from a better place than most. Unemployment is high, the worst it has been in more than two decades but a lasting recovery is possible. When it comes to high-return investments the best plan during these times is to talk to your advisor who will be able to guide as best they can. For the time being how things are done now is not the same, and it could be another 3 years at least before things get back to what you think of as normal for Australia’s economy.
