More from Shane Oliver this week on the coronavirus pandemic and its impact on the way we live and as a result on investment markets. In this article Shane addresses some questions, such as: why does a big part of the economy have to go into “hibernation”? how long might it be for? how big will the hit to the economy be? what does it mean for unemployment? why is it so important for governments and central banks to protect businesses and workers? can we afford all this stimulus?
- Significant government support is essential to enable parts of the economy to successfully hibernate.
- This will be financed by borrowing and is affordable given Australia’s relatively low public debt and low borrowing rates.
- Central bank support to keep financial markets functioning properly is also essential and quantitative easing is part of this.
- We are more likely to see a U-shaped recovery than a V or L.
Read Shane’s complete article here. As always, if you have any concerns or questions, please do not hesitate to contact Kate O’Brien at Edney Ryan Wealth Management on (02) 9908 9888.