Australia takes sharp economic blow from COVID-19 pandemic

Australia’s economy currently faces an unprecedented downturn due to the novel coronavirus crisis. However, large volumes of fiscal and monetary supports could minimize the impact of the deadly respiratory disease, according to the minutes released by the Reserve Bank of Australia on Tuesday.

“An economic contraction of such speed and magnitude would be unprecedented in the 60-year history of Australia’s quarterly national accounts,” the RBA said.

The RBA retained its cash rate at 0.25% on May 5. The country’s central bank also pledged to purchase the necessary amount of government debt to secure the 0.25% standing of the three-year bond yields.

RBA’s board members discussed a range of possible economic scenarios, expecting Australia’s gross domestic product (GDP) to hit a 10% contraction rate in the first half of 2020. For its annual reading, it was forecast to decline by 6%.