According to ANZ analysts, it is no surprise that the bushfires are dominating the national conversation at the start of 2020 for the Australian economy, given their unprecedented scale and the associated loss of life and destruction of animals and property.
“Appropriately, most of the present focus is on the immediate efforts to help those directly impacted and also prepare for further hot and dry weather. But increasingly there are attempts to gauge the wider economic impact of the fires.”
“Previous major bushfire events have had a negligible impact on national output, noting that the loss of property and destruction of fauna and flora is not captured in the calculation of GDP. But the size, intensity and duration of the current Australian bushfires mean that they will almost certainly have a larger economic impact than past fires.”
“All up we think that the immediate impact on GDP over the final quarter of 2019 and the first quarter of 2020 will be negative, but most likely not beyond 0.1–0.2ppt per quarter.”
“We still think it more likely than not that the RBA will decide that the path of least regret is to ease again in February. A strong labour market report for December may change that calculation, however.”
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