RBA Expects Economy to Contract by 4% in 2020

The Reserve Bank of Australia (RBA) is not expecting the gross domestic product (GDP) to contract by more than 4% in 2020, before recovering by 6%.

“We estimate that activity contracted severely in the June quarter of this year, but began to recover late in the quarter.”

The central bank’s economic outlook report showed that “the economic contractions induced by health-related restrictions on activity in the June quarter were very large. However, they were not quite as severe as initially expected.”

“Consequently we now think that, even though the initial contraction was smaller, the subsequent recovery is likely to be more protracted and progress on reducing unemployment will be slower.”