How coronavirus second wave will affect economy by JJ Smith 17 June 2023 written by JJ Smith 17 June 2023 204 As the state braces for tough lockdowns, a new chart from ANZ shows the devastating economic impact of a second wave of COVID-19. Australia has moved heaven and earth to get the economy up from its coronavirus slump. We have endured incredibly tough lockdowns. The government has unleashed unprecedented multi-billion dollar spending programs. We have been through complete upheaval. And it has worked. The virus is down and the economy is up. But now a new chart shows just how fragile the economic recovery is. Victoria’s new coronavirus outbreaks show that just a handful of cases can spiral out of control and suppress the spending that keeps the economy moving. “Health risks and lockdown conditions in VIC are delaying the spending recovery,” said ANZ economist Adelaide Timbrell. Ms Timbrell shared the following chart, which shows how Victorians’ spending has shrunk. The chart uses ANZ data and reveals that in the rest of Australia, spending is still higher in 2020 than in 2019. In Victoria that was also true – until the most recent week. Now, with the coronavirus once again tearing through the lungs of hundreds of Victorian citizens, and the state responding with tough lockdowns, spending is shrinking again. An ANZ Research new chart shows that as cases of COVID-19 spiked in Victoria, spending went down: The chart shows the recent fall in spending is not nearly as large as the fall in March and April. (Neither is it as large as the fall in late December, caused by bushfires.) But it is a worrying signal of how rapidly the progress of the economy follows the virus. If Victoria is unable to get on top of the virus, its economy is at risk. For now, as the next graph shows, the state can still claim its unemployment rate looks better than other states. That relative success won’t last if the virus keeps trending upwards – and Victoria’s weakness will also weigh on other states. Current unemployment rates state by state:
