Australia | It’s a race: reopening waiting on vaccine rollout
The protracted Greater Sydney lockdown, and return to lockdown conditions in other capital cities and regions has led to a marked downgrade in our forecasts for 2021. Uncertainty abounds, with the highly transmissible Delta strain of the coronavirus making suppression strategies very difficult to achieve and increasing the chance of future outbreaks.
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- Federal and state governments have put forward guidance on how future outbreaks will be navigated. In NSW, vaccination rate targets will be a prerequisite for reopening the economy. However, social distancing and travel restrictions will be tighter than previously envisaged until vaccination milestones are reached.
- Vaccination rates have increased sharply in recent weeks. We present upside and downside scenarios on the future path of new vaccinations to benchmark when restrictions could be relaxed. We expect it will take until mid-late Q4 before the 80% vaccination target for those over 16 years old will be met.
- The reimposition of restrictions has led to a sharp downgrade in our consumption forecasts, while the expected recovery in services trade has also been pushed out. Work stoppages in construction will also weigh on GDP in Q3.
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