Vaccination threshold may be hit in four months

With new virus cases hitting fresh highs this week, Sydney’s lockdown has been extended until end-August and looks set to last for months given the high transmissibility of the Delta variant. Melbourne also briefly re-entered lockdown this month, though restrictions have now been lifted. Other states may manage to keep Delta at bay, but with NSW accounting for one-third of nationwide output, we’re forecasting a 1% q/q decline in Q3 GDP. However, we expect growth to rebound in Q4. The government has now announced that the domestic economy will fully reopen when 70% of the eligible population are fully vaccinated. We estimate that may happen in about four months if daily vaccinations reach 0.8% of the population by the end of this quarter and stay there until year-end, from 0.6% over the past week.