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Higher vaccine supply will render lockdowns obsolete

With the virus outbreak in New South Wales going from bad to worse we’re pencilling in a marked slowdown in Q3 GDP growth. However, given that deliveries of the Pfizer vaccine have been brought forward and more people are now encouraged to take the AstraZeneca one, we still expect most adults to be vaccinated by year-end so lockdowns should become a thing of the past before long.
Marcel Thieliant Senior Japan, Australia & New Zealand Economist
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Australia & New Zealand Economics Weekly

Minimum wage to rise by 4% this year

Suggestions by Labor leader Albanese that minimum wage increases in line with inflation plus productivity growth are sustainable are wide of the mark at a time when consumer prices are rising twice as fast as the RBA would like them to. But with even employers supporting a large minimum wage hike, we now expect the Fair Work Commission to lift the minimum wage by 4% next month. While that would reduce the hit to household incomes from soaring living costs, it would add to the upward pressure on inflation. ANZ Drop-in (19th May, 07:00 BST/14:00 SGT): Join economists from our Australia and Markets services shortly after the release of Q1 labour market data on 18th May for a discussion about the Australian growth, inflation and monetary policy outlook. Register now.

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Australia & New Zealand Economics Update

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11 May 2022

Australia & New Zealand Economics Update

Australia - Falling real incomes won’t derail consumption for now

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More from Marcel Thieliant

Japan Economics Update

GDP to rebound in Q3 despite restrictions in Tokyo

While new infections in Tokyo have picked up, the fourth state of emergency in the capital is partly a political move designed to placate fears that the Tokyo Olympics will trigger yet another virus wave. With the health situation in other prefectures less problematic and the bulk of the elderly vaccinated by the end of the month, we assume that other prefectures will stick to light touch quasi-emergency measures.

12 July 2021

Australia & New Zealand Economics Weekly

RBA’s central scenario may signal rate hikes soon

The RBA began shifting the stance of monetary policy this week by watering down its commitment to keep rates on hold for the foreseeable future. The Bank’s central scenario is still consistent with rates remaining on hold until 2024, but the Bank has consistently underestimated the pace of the economic rebound. The Bank will probably revise up its forecasts again in August and we think it will start to hike rates in early-2023.

9 July 2021

Japan Economics Weekly

Pandemic unlikely to herald period of higher inflation

With producer prices rising at their fastest pace in years and goods shortages showing no signs of easing, the risks to inflation seem to be tilted to the upside. However, we aren’t convinced that a prolonged period of stronger consumer price inflation is on the cards and only expect underlying inflation to average 0.7% next year.

9 July 2021
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