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Economic imapct of COVID-19
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Blog | The economic impact of Coronavirus on Australia

Simon Curtain
Partner/Private Client Adviser
5 Oct 2020

After almost three decades of economic growth, Australia’s stellar run came to an end recently with a -0.3% dip in economic activity in the March quarter and a much larger -7% decline in the June quarter. Technically the economy is in recession. 

But is it all bad news? 

Despite the headlines touting economic recession, I think most people would agree that Australia has, thus far, escaped the worst of the Pandemic when compared to other countries around the World; with lower case numbers and lower death-per-capita (deaths per person based on the size of a countries population). 

So where does Australia sit based on economic performance in recent months? As the table below shows, quite well: 

As you can see, most countries, except China, posted negative growth over the June quarter and only a select few posted stronger economic figures than Australia. 

Interestingly the Scandinavian countries of Finland, Norway, and Sweden posted similar, or better, performance to Australia, despite Sweden’s seemingly radical approach in tackling the virus. 

After the initial economic shock and decline, the economy is now on the road to recovery with many Australian states opening up and Victoria emerging from stage 4 restrictions. Economic activity is starting to fire up again. 

The Reserve Bank of Australia predicts that the economy will continue to improve into 2021 and 2022 growing 5% and 4% over the period respectively. 


Unemployment is expected to peak at around 10% by the end of the year and decline gradually over the following few years. While unemployment is high, Government stimulus measures have protected many households and we remain optimistic of economic conditions improving, allowing many more Australians to return to work. 

Share Market 

The share market has recovered quite well after the March lows but is still 17% below its pre-Coronavirus peak. Volatility has subsided and we have seen the market move sideways in recent months. We expect this to continue in the absence of major news, be it positive (vaccine) or negative (second/third/fourth waves). 

Property Prices 

Property prices have been remarkably resilient over the quieter Winter months and there is much anticipation as markets open up over Spring. While property prices are expected to decline year on year, current estimates show an expected 6% decline in average Capital City prices, a far cry from the 30% to 40% decline touted by fear mongers at the outset of the pandemic. 

Interest Rates 

Interest rates remain at a record low of 0.25%. Rates are tipped to fall further later in the year with some Economists predicting a cash rate of 0.10% by years end. This is unprecedented territory and good news for those with debt.  

Unfortunately, it is not great news for self-funded retirees and this really highlights why a diverse investment portfolio is key, as relying on paltry interest rates to fund a lifestyle can be tough going. 


While there is a lot of bad news, as always there is a healthy dose of positive news if you look for it. Undoubtedly this period will be one we talk about for many years to come and the Economy will take a number of years to recover, but recover we will. 

At Hewison Private Wealth we guide and advise our clients through all manner of economic uncertainty. Putting in place strategies to reach clients’ goals and objectives over time. If you or someone you know is interested in speaking to a financial adviser please contact us to start the conversation. 




Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.auPlease note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.