Virus effects linger on economy
THE Australian economy will continue to feel the effects of the coronavirus over the next six months, with China-facing education and tourism sectors to weigh particularly heavily on GDP.
AMP Capital senior economist Diana Mousina said the Australian economy was looking at an overall hit of about 0.5 or 0.6 per cent from the coronavirus, spread out over two quarters.
“It will drag for at least three to six months from here,” Ms Mousina said.
Ms Mousina said estimates she had seen suggested the government’s China travel ban, which was on Thursday extended until February 29, could see Australia lose up to $1 billion from tourism and education per week.
Despite education arrivals from China representing just 0.6 per cent of GDP, and tourist arrivals from China representing about 0.2 per cent, these losses would not rebound as easily as more lucrative exports such as commodities.
Ms Mousina said there was a much higher chance of recouping mining losses once Chinese facilities and production lines return to full capacity. “The biggest hit to growth that we won’t be able to recoup is the loss of tourism.
“With education, some of the students will come and do their courses when out of quarantine, but you still have lost uni fees in the near-term, potentially lost accommodation, and the spending that goes along with education.”
Meanwhile, she predicted the total first quarter of Australian GDP growth would fall by 0.1 per cent.