How Australia's economy gained momentum because of Covid-19

Abstract

The objective of the paper is to assess the resilience of the economy of Australia following the Covid-19 pandemic that hit the global economy in Q4 2019, in years 2020, 2021 and 2022. Quarterly growth rates (annualised) of the Real GDP of Australia and Canada are forecasted between Q2 2022 and Q4 2050. Two sets of forecasts are generated: forecasts using historical data including the pandemic (from Q1 1961 to Q1 2022) and excluding the pandemic (from Q1 1961 to Q3 2019). The computation of the difference of their averages is an indicator of the resilience of the economies during the pandemic, the greater the difference the greater the resilience. Used as a benchmark, Canada's economy shows a slightly lower resilience to the Covid-19 pandemic (+0.37%) than Australia's economy (+0.39%) based on Q2 2022–2050 forecasts. However, driven by stronger growth than Canada, the average estimate of the Q2 2022–Q4 2050 quarterly (annualised) growth rate forecasts of Australia is expected to be +2.09% with the Q1 1961–Q1 2022 historical data while it should be +1.61% for Canada. Supported by higher growth, Australia's Real GDP is expected to overtake Canada's in Q1 2040.