Question

An assessment of the economic impact of COVID 19 on the Australian economy – an International Macroeconomic perspective.

The intertemporal model of the current account- the CA balance: likely changes and implications for future consumption

Answer 1

COVID-19 - coronavirus or COVID-19 is a contagious disease which spread through cough,sneeze and through the contact with the affected person.

macro economic impact of coronavirus on Australia-

1. Australia and infact all the countries across the world have been adversely affected by the covid 19 pandemic.in the recent data total cases reported in Australia was around 7200.
2. Australia was under lockdown for around two months which hundle the growth and survival of the economy.
3. due to the lock down demand of various goods and services essential or non essential decreased as a result the production decreased and the firms had to unemployed their employees.
4. tourism sector faced one of the worst business period due to the ban of tourism activity upto a certain period.
5. as per a recent report it has been reported that Australia has entered into recession phase after almost 30 years.
6. temporary trade measures have been adapted as the preventive measure against the adverse impact of covid -19 among various countries.

INTER TEMPORAL model of current account-

the term inter temporal implies for the financial decisions and judgments made in the present time which may affect the future financial situation,it simply state that to combat with the problem of covid-19 problem government will have to spend huge amount of funds for the revival of the businesses as well as on the medical sector.

• there may be a problem of increasing NPA(s) in the economy which may create another burden for the government to combat which may impact the government budget adversely.
• the current account balance of Australia stood around 8395 million Australian dollar (source- Australian bureau of statistics) for the first quarter of 2020.
• this is likely to be equivalent or increasing in future due to the current scenario of Covid - 19 and its post impact.