Australia | Consumption set for a double-dip
Household consumption reached its pre-pandemic level in Q2. Goods spending has been elevated throughout the recovery, while spending on essential services has broadly maintained its trend. But these components have been offset by discretionary services, where spending remains well below its pre-crisis level.
What you will learn:
- Q2 2021 will be a high watermark as consumption enters a double-dip pattern due to the current lockdowns. We had previously downgraded our outlook due to the protracted lockdown in NSW, but we have made further revisions due to restrictions in Victoria and the ACT, with the former set to remain in lockdown well into Q4.
- We anticipate vaccination thresholds for re-opening in NSW and Victoria will be met in early/mid Q4, and this will enable the beginning of a recovery in spending. However, ongoing restrictions will limit trading capacity, which we expect to translate into a moderate recovery in Q4 and into the first half of 2022
- Strength in goods consumption, and steady growth in spending on essential services has been broadly offset by weakness on discretionary services, which have been disrupted by trading and travel restrictions.
Tags:
Related Services
Post
Japan’s tariff turbulence to flatten near-term growth
We've cut our GDP growth forecasts for Japan by 0.2ppts to 0.8% in 2025 and by 0.4ppts to 0.2% in 2026, reflecting higher US tariffs and heightened global trade policy uncertainty. We now forecast that Japan's economy will barely grow over 2025-2026 on a sequential basis.
Find Out More
Post
Growth outlook cut further for the Eurozone amid tariff turmoil
Given the unique nature of the hike in US tariffs, the size of these supply and demand shocks and the speed at which they are arriving make the precise economic implications particularly hard to pin down. Overall, however, we expect GDP growth in the US and world economy to slow sharply, but we don't anticipate recessions in either.
Find Out More