The Australian economy will grow by enough in 2021
to regain its pre-COVID level by the end of the year before slowing in 2022,
according to the first World Economic Outlook (WEO) for the year from the
International Monetary Fund (IMF). But, as always, the optimistic forecast for
us and the rest of the world all hangs on the current COVID vaccination
campaigns across the globe succeeding.
Inflation will be more of a problem for the economy this year judging by the weak data for the December quarter and 2020 released this morning by the Australian Bureau of Statistics (ABS).
The headline rate for the quarter and 2020 as a whole was 0.9%, way below the Reserve Bank’s target range of 2% to 3% over time. The underlying rate of inflation tracked by the Reserve Bank’s favoured trimmed mean and weighted median measures was 0.45% in the quarter and 1.3% for the year.