Australia: Coronavirus vaccine to provide significant boost to GDP in H2 2021

The Goldman Sachs analysts offer their take on the odds of a coronavirus vaccine to be approved by the Australian government and its impact on the economy.

Key quotes

“Expects a vaccine to be approved by the Australian government in Q1 of 2021, distribution in Q2.

Australia achieving herd immunity by the middle of 2021.

From a macro perspective, while near-term growth is likely to remain muted, we think a successful vaccine will provide a significant boost to GDP starting in the second half of 2021, primarily reflecting a more rapid recovery in domestic tourism spending.

More front-loaded rebound in house prices and increasingly likely acceleration in tax cuts should also provide support.

Forecasts for GDP:

In 2020 to fall 4.2%, to rise 4.6% in 2021 and 5.3% growth seen in 2022.”