Saying the year 2020 wasn’t a great one for the economy is a bit of an understatement.
Shops shuttered, businesses were forced to close or, worse, go bust, and unemployment hit 1 million people as sectors like hospitality and tourism were decimated.
But economist Chris Richardson, from Deloitte Access Economics, is upbeat about 2021 — so much so, his business outlook for the year is: “We got this.”
He expects Australia will see some important recovery this year provided vaccines start to be administered in Australia from next month, state borders remain mostly open and virus numbers remain suppressed.
So what are his key predictions?
Flying will resume, bringing students and tourists
Dr Richardson expects the much-talked-about “travel bubble” with New Zealand will finally expand to allow Australians to cross the Pacific Ocean “in coming months”.
“Broadening to cover much of the world by the end of 2021,” he said.
But just as with crises past, he believes it will take years — until 2024 — for Australians and the rest of the world to resume travelling like we were in 2019.
When it does, Dr Richardson says, “a return to global travel will likely lead to a big increase in Chinese tourism”.
Which is something our economy really benefits from.
Margy Osmond, the chief executive of the Tourism and Transport Forum, told The Business last year the average visitor from China spent $8,500 during their stay in Australia, compared to about $1,500 spent by local tourists.
The struggling education sector will also welcome the return of international students.
International education was worth about $37.6 billion a year to the Australian economy before the pandemic.
Despite some recent vaccine concerns, the United Kingdom, United States and Canada are predicted to have two-thirds of their population vaccinated by the middle of this year.
“It may be closer to October 2021 before Australia, the European Union, Japan, Russia, most of Asia’s tigers and Brazil achieve a similar rollout, with the rest of the world seeing their rollout timetable likely to spill into the start of 2022,” Dr Richardson said.
A key issue longer-term remains the extent to which business travellers return to the skies.
“Having had to substitute in-person meetings for video conferencing for many months, there may be a more permanent shift from businesses to save costs.”
Unemployment will improve slightly and slowly
Australia is one of just five nations (along with Taiwan, China, Vietnam and New Zealand) to enter 2021 “very-well-placed” according to Dr Richardson.
“COVID-19 numbers are very low, the vaccine news is excellent, confidence is rebounding, Victoria is catching up to the recovery already underway elsewhere, there are heartening developments in job markets, and China’s trade war…
Go to the news source: The top five things this leading economist thinks will happen in 2021