Australia's economy is now STRONGER than it was before Covid-19

Australia’s economy is now STRONGER than it was before Covid-19 after better-than-expected recovery despite border closures and strict lockdowns

  • Australia’s economy has rebounded to pre-pandemic levels, new figures showed
  • The economy grew 1.8 per cent in the first quarter as Covid-19 restrictions eased
  • Economy is also 0.8 per cent larger than before Covid pandemic and bushfires
  • Meanwhile, the UK remains a massive 5.9 per cent below pre-pandemic levels

Australia’s economy is now stronger than pre-pandemic levels after a better-than-expected recovery, despite closing their borders and imposing strict lockdowns.

The economy has rebounded much faster than predicted after growing a massive 1.8 per cent in the first quarter of the year as strict Covid-19 restrictions were eased.

And not only has the country recovered to pre-pandemic levels, it is also 0.8 per cent larger than its peak from before the Covid crisis and the devastating bushfires, according to ABC.

The impressive consumer-led recovery is thanks to a surge in domestic spending and investment, the Australian Bureau of Statistics reported on Wednesday. 

Australia’s economy rebounded quicker than expected after growing a massive 1.8 per cent in the first quarter as Covid-19 rules eased. Pictured: Shoppers in the Strand Arcade in Sydney

It comes as the country continues to battle coronavirus as Victoria extended a snap coronavirus lockdown in Melbourne on Wednesday for a second week.

Australia’s economy is one of six countries that is boasting a bigger economy than before the pandemic, while the UK has seen its finances in tatters, according to Deloitte Access Economics (DAE).

The other countries with stronger economies than post-pandemic levels are China, Chile, Romania, Lithuania and South Korea, according to DAE figures.

But the UK still remains 5.9 per cent below pre-pandemic levels in February last year, despite seeing its gross domestic product (GDP) grow by 2.1 per cent in March this year, latest figures showed.

Britain has seen its economy begin to recover as its GDP increase in March was the fastest monthly growth since August last year, while the service sector also grew by 1.9 per cent in the same month.

But the nation’s GDP still remained lower than before the pandemic, and 1.1 per cent less than the initial recovery peak in October last year, as the economy continues to recover from three Covid lockdowns.

Meanwhile, Australia’s economy shrank in 2020 but recovered strongly at the end of the year as coronavirus outbreaks were brought under control and curbs were lifted.

The turn of the year saw shops, bars and restaurants across most of the country remove all restrictions on the number of customers they can host, while many workers returned to the city centre.

Not only has the country recovered to pre-pandemic levels, it is also 0.8 per cent larger than its peak from before Covid crisis and bushfires. Pictured: Shoppers on George Street in Sydney

The change saw domestic demand account for 1.6 percentage points of the GDP increase in the first quarter of 2021.

While the country’s mining-heavy economy was also boosted by strong iron ore prices.

The Reserve Bank of Australia also left historically low interest rates on hold on Tuesday and indicated that will continue until 2024. 

In the latest World Economic Outlook, the International Monetary Fund is projecting a stronger recovery for the global economy in 2021 and 2022 compared to its previous predictions made in January.

The world’s economy is now expected to grow by six per cent in 2021 and 4.4 per cent in 2022, compared with 5.5 per cent and 4.2 per cent respectively previously.

But the fund warns a high degree of uncertainty surrounds these projections, with many possible downside and upside risks.

‘Much still depends on the race between the virus and vaccines,’ it says.

‘Greater progress with vaccinations can uplift the forecast, while new virus variants that evade vaccines can lead to a sharp downgrade.’ 

Australia’s faster-than-expected economic growth comes as the state of Victoria extended a snap Covid lockdown in Melbourne on Wednesday for a second week.

The Australian capital is scrambling to rein in the highly contagious variant of coronavirus, which was first detected in India.

Last Thursday’s lockdown in Australia’s second most populous state was due to end tomorrow, but infections rose and the number of close contacts reached several thousand.

Melbourne’s five million residents now face a second week of being allowed to leave home only for essential work, healthcare, grocery shopping, exercise or vaccination.

But the strict lockdown is likely to be relaxed elsewhere in the state, depending on local transmission in the next 24 hours, while other measures, such as mandatory masks, will stay.

Australia continues to battle the virus as Victoria extended a snap lockdown in Melbourne on Wednesday for a second week. Pictured: Healthcare workers transport patient in Melbourne

Melbourne’s (pictured on June 1) five million residents face a second week of being allowed to leave home only for essential work, healthcare, grocery shopping, exercise or vaccination

‘If we let this thing run its course, it will explode,’ the state’s acting Premier James Merlino said. ‘This variant of concern will become uncontrollable and people will die.’

‘No one…wants to repeat last winter,’ he added, referring to one of the world’s strictest and longest lockdowns that the southeastern state imposed in 2020 to leash a second wave of infections.

More than 800 people died in last year’s outbreak, accounting for around 90 per cent of Australia’s overall deaths since the pandemic began in March 2020.

Snap lockdowns, regional border curbs and tough social distancing rules have helped Australia suppress prior outbreaks and keep its Covid figures relatively low, at just over 30,100 cases and 910 deaths.

Though Victoria’s daily cases have been in the single digits since the lockdown was imposed, officials fear even minimal contact could see the Indian variant spread.

Six new locally acquired cases were reported on Wednesday, compared with nine a day earlier, taking the tally of infections to 60 in the latest outbreak.

Health authorities said the variant could take just one day to pass from person to person, versus the five or six days of contact required for transmission of earlier variants.

The latest outbreak has been traced back to a traveller who returned from overseas, authorities said.

The individual left hotel quarantine in the state of South Australia after testing negative, but subsequently tested positive for the virus in Melbourne. 

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