Circular Quay in Sydney, a city in lockdown (Image: AAP/Mick Tsikas)

Two months ago, Treasurer Josh Frydenberg was triumphant. Delivering his second pandemic budget, he spoke of Australia's strong economic performance during a pandemic that had devastated the world. Our recovery was looking V-shaped. And in spite of a slower than expected vaccine rollout, the country was on track for strong GDP growth.

But the key assumptions underpinning Frydenberg's budget forecasts are already under pressure. An outbreak in Sydney has the country's economic powerhouse facing weeks in lockdown, without the safety net of JobKeeper. Borders continue to slam shut around the country. The vaccine rollout stalls as Australia retreats further from the rest of the world. Just how badly will it pierce our plans for a rosy future?

What did Frydenberg assume?

Every budget comes with assumptions that underpin its forecasts for the future health of the economy. But the pandemic makes predicting the future fraught. The budget predicted GDP growth of 4.25% in 2021-22, and unemployment falling below 5% by 2023. But that's contingent on the assumptions holding.