SYDNEY, Aug. 14 (Xinhua) -- The COVID-19 outbreak in the Australian State of Victoria will likely delay the country's economic recovery by several months, Reserve Bank of Australia (RBA) Governor Philip Lowe told a parliamentary inquiry on Friday.
Prior to the outbreak in Victoria, both the government and RBA were expecting a return to growth for the national economy during the September financial quarter.
However, Lowe said the outbreak would likely reduce GDP growth by at least 2 percent during that period.
"This will broadly offset the recovery that has been taking place in most other parts of the country," Lowe said. "As a result, we are now not expecting a lift in economic growth until the December quarter."
According to Lowe, figures from the June quarter were likely to show the economy shrinking by 7 percent, the largest contraction in many decades.
Given that inflation would be unlikely to return to the RBA's target band of 2 to 3 percent for several years, Lowe added it was "highly likely" that the official interest rate would remain at the current 0.25 percent.
Lowe also flagged high unemployment as a serious concern, with the official jobless figure topping 1 million people for the first time ever as businesses responded to the pandemic.
The Australian Bureau of Statistics revealed on Thursday that the country's unemployment rate hit 7.5 percent in June, with the RBA predicting it to reach 10 percent by the end of the year.
"Looking forward, an important priority will be to boost jobs," Lowe said. "Based on the forecast I discussed earlier, high unemployment is likely to be with us for some time, which should be a concern for us all."
Latest comments