Expert spies ‘silver lining’ for recovery

TOWNSVILLE’S export and minerals industry could keep the region’s economy pumping as the country struggles under a recession.

A James Cook University associate professor said the region was already trying to climb its way out of a deep hole following the Queensland Nickel collapse when the pandemic hit but there were positives that could emerge.

On Wednesday, Treasurer Josh Frydenberg announced the country was in recession with about 850,000 people joining unemployment queues.

The nation’s economy shrunk by 0.3 per cent in the March quarter while the June quarter is expected to fall by as much as 10 per cent.

This would be the biggest fall in gross domestic product since the Great Depression.

Mr Frydenberg said even in March, Treasury had feared an unheard 20 per cent drop.

“What we were facing was an economist’s version of Armageddon. We have avoided the economic fate, and the health fate, of other nations because of the measures we have taken,” he said.

James Cook University Associate Professor Riccardo Welters said coronavirus came at an unfortunate time for Townsville, which was beginning to show signs of economic growth.

The region has been repeatedly hit with economic blows, including the monsoonal rain event in 2019, but Dr Welters said while this would further delay the region’s recovery, there was a silver lining.

“The Government will roll out the stimulus packages,” he said.

“We saw the first one (yesterday) with the Homebuilder grant that is something we should capitalise on.

“Our private sector should make the most of these opportunities.”

Dr Welters added that the exports and minerals sector would be another “silver lining” for the region.

“Some countries in Asia like China and Korea quickly dealt with the COVID-19 crisis, so there was little damage to their economies,” Dr Welters said.

“(This will) benefit our export sectors. While it (the pandemic) is hurting our economy, there are things we can capitalise on.”

He added increased travel as rules eased would also be an opportunity for Townsville.

Dr Welters said the worst thing that could happen was for people to lose confidence in the economy.

“As soon as people lose confidence in the economy, they stop spending and things get worse,” he said.

“This is going to be a different recession, there is a clear cause for it, but as soon as the economy opens up … things will improve relatively quickly.”