realestatebusiness logo

Subscribe to our newsletter

Treasury revises forecasts in wake of Melbourne lockdown

The stage 4 lockdown in Melbourne has prompted Treasury to revise down its forecasts for the Australian economy.

Just weeks after issuing an economic and fiscal update, Prime Minister Scott Morrison has confirmed that Treasury has revised its forecasts in response to stage 4 lockdown measures imposed in Victoria.

In media conference held on Thursday (6 August), the Prime Minister revealed that additional restrictions in Victoria are estimated to cost the real economy between $7 billion to $9 billion over the September quarter.

According to Mr Morrison, the Victorian economy is expected to bear 80 per cent of the cost ($6-7 billion), with the remainder representing a “preliminary estimate” on the broader impact on confidence in other states and territories, and “supply chain impacts” from industry shutdowns in Victoria. 

“The combined effect on GDP of the stage 3 and 4 Victorian restrictions through September quarter is expected to be in the order of $10-12 billion, contracting 2.5 per cent from quarterly real GDP growth,” he added.


Treasury also revised its forecast for the unemployment rate, from a peak of 9.25 per cent to 10 per cent.

The effective unemployment rate is also expected to hit the “high 13s”, with an increase in effective unemployment of between 250,000 to 400,000. 

“That is very concerning, that is very troubling, but it is not unexpected in these circumstances,” Mr Morrison said.

“These measures will have a very significant cost, and it will impact the recovery path. 

“But the task doesn’t change. We get on top of this issue in Victoria, we band together, and we make this work.”

He concluded: “We work together across the country to do the things we need to do to boost demand, encourage investment and rebuild our economy and go forward.”

[Related: Government confirms record-high budget deficit]

Treasury revises forecasts in wake of Melbourne lockdown
Treasury revises forecasts in wake of Melbourne lockdown

Latest News

The latest sentiment data reveals household and businesses are reacting differently to the economic challenges, with mortgagors becoming mor...

The first monthly consumer price index indicator is set to be released by the Australian Bureau of Statistics in October. ...

While the majority of NAB customers are ahead on their home loans, 1 in 5 has felt financially stressed in the last 90 days, a bank survey h...


Join Australia's most informed brokers

Do you know which lenders are providing brokers and their customers with the best service?

Use this monthly data to make informed decisions about which lenders to use. Simply contribute to the survey and we'll send you the results directly to your inbox - completely free!

Do you think the new NSW property tax will help or hinder first home buyers?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.