In its latest economic analysis of Australia and the RBA monetary policy outlook, Goldman Sachs (GS) expects GDP “to fall 2% in the third quarter from the previous period, driven by weaker household consumption and construction activity.
“The economy is then expected to expand 1.8% in the fourth quarter as restrictions are relaxed more gradually than in the past,” added GS.
On the RBA policy, the US bank said, “The downside risks to Australia's macro-outlook have increased considerably since early July when the Reserve Bank of Australia announced the scheduled taper of its quantitative easing program.”
It’s worth noting that Goldman keeps its September tapering view on the table with 65% probability while also saying, “but we continue to see a strong argument for the RBA to delay any (even if modest) withdrawal of policy support.”
GS further mentioned, “Revisions resulted in it cutting its 2021 forecast in annual averaged terms by half a percentage point to 4.2%. In turn, it boosted its 2022 estimate by 0.4 percentage point to 4.2%.”
In general terms, GS said, “Based on the current pace, that the share of adults with two doses will rise from 30% currently to the government's 70%-80% target by around mid-November. While the improvement is encouraging, the experience of countries more advanced in the vaccine rollout raises a number of potential issues on the horizon.”