Slow vaccine roll-out could deepen economic scars
While South Australia’s economy is recovering strongly, the slow vaccine roll-out is a significant threat to the nation’s ongoing ability to weather the long-term effects of the pandemic. Some sectors of the economy will be scarred by the effects of prolonged border closures.
In their latest Economic Briefing Report, economists from the University of Adelaide’s SA Centre for Economic Studies (SACES) have highlighted what’s on the post-pandemic horizon for the state’s economy and what factors, both national and global, will impact it going forward.
Their report highlights:
- Prolonged border closures due to a slow vaccine roll-out may accentuate scarring effects on sectors of the economy that are dependent on migration, travel and overseas workers.
- Australia lags well behind other countries in the vaccine roll-out: further outbreaks will hold back economic recovery.
- Recovery has been uneven and is slowing.
- In the residential building sector there is a risk of a hard landing when stimulus measures tail off, exacerbated by slower population growth due to ongoing border closures which have reversed overseas migration flows.
- South Australian exports have done well through the pandemic but exports of services have fallen away.
- Wine exporters face a significant challenge in diversifying to other markets as punitive Chinese tariffs start to have an effect.
- Australia needs more effective governance structures than are currently in place to cope with increasing economic, political, and environmental threats.
- While aspects of the nation’s policy apparatus have performed well, there is dysfunction in the State-Federal system.
- The potential end of American global leadership in parallel to the Chinese Communist Party’s pursuit of a mercantilist trade and development policy presents a direct challenge to Australia’s open society.
“South Australia’s economy is recovering strongly with the return to pre-pandemic life, ongoing low COVID cases, the rebound in external demand, and considerable policy support,” says Mr Steve Whetton, Deputy Director, South Australian Centre for Economic Studies, the University of Adelaide.
“Although global recovery is expected to be carried forward into next year, it is likely to slow as activity approaches more normal patterns.
“While the South Australian economy has fared well during the pandemic the momentum of economic recovery may not be maintained as the natural bounce back fades, stimulus measures are withdrawn, and underlying structural weaknesses reassert themselves.”
The full Economic Briefing was delivered today by SACES to South Australian business leaders at a presentation at the InterContinental Hotel.
Our guest speaker was Saul Eslake, an independent economist, speaker, company director and Vice-Chancellor’s Fellow at the University of Tasmania from Corinna Economic Advisory Pty Ltd.
The topic of Saul's presentation was The Post-Pandemic Economy. A copy of his presentation slides can be downloaded from here.