Question

Discuss with TABLES and GRAPHS and explain the effect of COVID 19 toward the main macroeconomic indicators for the Australian economy.

Answer 1

The highest possible economic growth, low unemployment, and targeted inflation rate are the major macroeconomic goals of an economy.

Covid-19 hits the Australian economy very badly. This pandemic leads to a recession as the growth rate of GDP decreased by 7%. Losses of jobs because of the shutdown of businesses have worsened the economy. The income level falls due to a fall in employment which in turn reduces the demand for goods and services. The loss of jobs generated a large pressure on the Australian government. Since, Australia is a big exporter of iron, coal, and natural gas and China used to be the largest importer of these resources. The exports in Australia have reduced sharply because China is the epicenter of this pandemic.  

The other important industry in Australia is tourism which contributes a large share in GDP. Due to restrictions on national and international movements, the tourism sector indicates negative growth. Regardless of being effected by Covid-19, Australia is doing better than other developed countries in this worse pandemic situation.

With the help of given statistics, the impact of Covid-19 on Australian economy can be seen:

Source: Wikipedia (Economy of Australia)

The graphical representation of recessionary situation in Australian economy is following:

Currently, the economy of Australia is somewhere between point A and B which represents the recessionary situation.