The Reserve Bank forecasts Australia’s economy will grow by about 2.75% this year, and by 3% next year, confirming a positive outlook for the nation despite the bush res and the coronavirus.

Reserve Bank governor Philip Lowe says falling unemployment through reconstruction activity will counterbalance any damaging effects of the bush res and the virus. He says the economic hit from the devastating bush re season and unfolding virus threat will only “temporarily weigh on domestic growth”.

He notes that the slowdown in global growth that started in 2018 was “coming to an end” and that global growth is expected to be slightly
stronger this year and next than it was last year.

He attributes the expected growth to the low level of interest rates, recent tax refunds, ongoing spending on infrastructure, a brighter outlook for the resources sector and, later this year, an expected recovery in residential construction.

Lowe also points to the Australian dollar being “around its lowest levels in recent times”, which will boost exporters.