Reserve Bank of Australia Deputy Governor Guy Debelle on Tuesday said there would be a problem if the government ceased the ongoing economic stimulus by September. Debelle added that Australia’s $1.38-trillion economy needed “considerable” support for some time to survive the coronavirus pandemic as it faced the first recession in three decades.
Australia’s fiscal response to the global health crisis reached nearly 10% of GDP, among the biggest in the world. It comes along with the central bank’s measures to cushion the pandemic’s economic fallout through an unlimited quantitative easing program and cutting interest rates to a record low of 0.25%.
Treasurer Josh Frydenberg is scheduled to provide an update on whether there will be changes to the support measures next month. With such a recession risk, the government is expected to extend the fiscal package beyond the current end-September due date.
