A new report has warned that international travel for Australians is likely to remain restrictive until 2024.
Deloitte Access Economics’ quarterly business outlook – printed prior to the Morrison government’s vaccination program being thrown into disarray late last week – expects international borders will re-open only gradually.
For Australia, Deloitte economist Chris Richardson anticipates there will be some sort of quarantine remaining for incoming travellers for some time.
“That keeps international travel – both inbound and outbound – pretty weak in 2022, and it may not return to pre-pandemic levels until 2024,” he said.
Late last week health authorities recommended the AstraZeneca vaccine should only be given to people above 50 due to the risk of blood clotting – throwing plane companies’ plans for an international relaunch into disarray.
The government has since secured an additional 20 million Pfizer vaccine doses that will be shipped from abroad later in the year.
Otherwise, Richardson says globally vaccines are mostly working, governments are still mostly spending and central banks are mostly “pedal to the metal” in term of low interest rates.
“Fundamentals are moving pretty fast off the back of that,” he said.
He said Australia’s economy appears to be “roaring back”, although like the Reserve Bank, he expects a lift in the interest rates is some years away.
Shadow treasurer Jim Chalmers said the expected economic rebound is welcome.
“But Australians’ jobs and livelihoods are being threatened by Scott Morrison’s bungled vaccine rollout, premature cuts to JobKeeper, and attacks on wages and incomes,” he told AAP.
Richardson does not expect a sustained inflation rise back into the RBA’s two to three per cent target band to commence until 2023/24.
“A sustained lift in inflation requires a conga line of things to happen,” Richardson told AAP.
It will take time for the jobs market to tighten and the unemployment to fall enough to lift wage pressures.
“This is going to be a slow moving train not a fast one,” he said.
One immediate hurdle for the labour market will be last month’s demise of JobKeeper.
Richardson anticipates there will be many stories of individual business closures and job losses as a result of the wage subsidy ending.
He doubts the jobless rate will return to above six per cent as a result of the end of JobKeeper.
“But if it does, it will only be temporary,” he said.
The Australian Bureau of Statistics will release labour force figures for March on Thursday, which will capture the final days of the JobKeeper program.