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More stimulus needed as recovery set to slow

The renewed virus outbreak in Victoria underlines that the recent strength of the recovery won’t be maintained. We expect output to remain below pre-virus levels until the end of next year. While the labour market has held up better than we anticipated, inflation is still set to fall sharply. We expect the RBNZ to launch negative interest rates and the RBA to resume its bond purchases next year.
Marcel Thieliant Senior Japan, Australia & New Zealand Economist
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