The hospitality and accommodation sectors will take two years to recover from the downturn caused by the coronavirus pandemic, with economic activity in these sectors to be half what it was by June 2020.
The aviation sector will not surpass its December 2019 output levels until June 2022 with international borders expected to stay closed well into 2021.
The dour outlook comes from research by accounting firm KPMG, which forecasts the nation’s the economy will need 18 months to recover from Covid-19 related losses.
“We have experienced the single largest shock to the economy in close to a century,” said KPMG chief economist Brendan Rynne.
“The economy’s fundamentals were relatively sound going into this, but what you are seeing is an unprecedented decline in activity in parts of the economy which have effectively been turned off.”
Treasurer Josh Frydenberg has warned that financial assistance for those affected by the downturn will not be extended beyond September, saying there no “free money tree”.
“With $320 billion, or 16.4 per cent of GDP in financial support, our focus is getting the country through the crisis and positioning the economy to recover on the other side,” Frydenberg said.
“This has only been possible because of the position of strength from which we entered the crisis.
“Rebuilding consumer and business confidence will be key as the nation’s finances can only be sustained by a strong and growing market-led economy. Australians know there is no money tree. What we borrow today, we must pay back in the future.”
The federal government last week unveiled its three-step process to lifting social-distancing restrictions by July, but it is up to the states and territories to announce their own timetables regarding the plan.