Just how long till the economy bounces back?

Restrictions ease in Australia and around the world. But not everyone is ready. We try to unpack some of the numbers being thrown around about the economic costs of the pandemic. And while Australian journalists should not be clapped under any circumstances, in some countries they’re really risking it. 

Too many numbers

In a parallel universe, Josh Frydenberg is getting ready to deliver his budget today. Instead, we’re getting swamped by lots of big, scary numbers about how bad the economic impacts of the pandemic will be.

Yesterday, Deloitte Access Economics told us the budget deficit could blow out to a record $143 billion this year, and that unemployment won’t return to 5% till 2024. Meanwhile, modeling from accounting firm KPMG suggests a return to pre-COVID levels of economic activity won’t happen until early 2022.

In forecasts released on Friday, the Reserve Bank of Australia pointed to a 10% reduction in economic activity in the first half of 2020, but more optimistically, predicted a 6% rebound next year that would leave the economy the same size at the end of 2021 as it was at the end of 2019. The Commonwealth Bank of Australia is predicting a weaker rebound of 3.25% next year. They can’t all be right.

The barrage of numbers can seem overwhelming, but also indicate just how difficult and uncertain Australia’s road out of the pandemic will be. Last week, the front pages of The Sydney Morning Herald, The Age, and The Australian had the news, to be delivered by Frydenberg at the National Press Club, that Australia’s lockdown would cost the economy $4 billion a week.

But easing restrictions too quickly and unleashing a second wave of the virus would also be ruinous. The front page of today’s Herald suggests it would cost NSW alone $1.4 billion if lockdowns had to be reintroduced, meaning that any economic boost from restarting the country will be wiped away quickly if the restart isn’t carefully managed. 

The road out begins

For the first time since the start of the pandemic, NSW, the worst affected state, has recorded no new cases of COVID-19 in the past 24 hours, despite carrying out over 6000 tests. It’s a momentous achievement that underscores just how far Australia has come in flattening its curve. There hasn’t been a single recorded case outside of NSW and Victoria since last week.

Australians can now have a little freedom, as a treat. From midnight, Victorians will be allowed to have five people visiting them at home. That means that, until NSW follows suit on Friday, Victorians will actually have slightly laxer restrictions than their northern neighbours. And this morning, Premier Daniel Andrews brought the state in line with the rest of the country on the controversial schools question. From May 26, prep, years one, two, 11 and 12 will return to school, with other grades going back from June 9.

The road out also begins where it shouldn’t be

Australia can have freedom because it’s done well. But other countries are easing things up when they probably have no business doing so.

Yesterday, Russia notched a record 11,656 new cases, giving it the fourth highest number worldwide. Despite this, President Vladimir Putin announced an easing of the country’s lockdown, with a return to work starting today.

On the weekend, UK Prime Minister Boris Johnson told Britons they could go back to work, in an address widely panned for leaving people more confused. The stay at home message was replaced by a plea to “stay alert”, while no mention of tracing or testing was made. Even Johnson’s deputy Dominic Raab couldn’t seem to get his head around who people could have contact with. The messaging has been so confusing Johnson has managed to lose breakfast TV.

Journalists on the front line

It’s easy to mock calls by some journalists, tweeting from the comfort of their own homes, about the need for our profession to be clapped and cheered as if we’re frontline health workers. But in some parts of the world, journalists really are seriously risking their health to cover the virus.

In Pakistan, where the pandemic is escalating, over 50 reporters have been infected, with many saying social distancing is not being followed. Dozens of journalists in neighbouring India, many of whom have been leaving home to cover the pandemic, have also contracted the virus.