Run Baby, Run

Published on: May 11th, 2020

The far-reaching effect of COVID-19 on the global economy is being reflected in the data. We anticipate the economic impact to be violent and reach epic proportions. With many western countries in lockdown, Remi Tetot reports on the newly-released economic data that has been particularly impacted by the COVID-19 breakout during the week.


  • SM
    Shantanu M.
    11 May 2020 @ 18:19
    Is Australia the odd one out because of the positive shock from Chinese economy restarting?
    • AB
      Allex B.
      12 May 2020 @ 08:11
      I would expect a record decline in retail sales in Australia next month as everybody hoarded in March / early April. Supermarket shelves are back to normal now. A month ago you couldn't buy toilet paper, paper towels, pastas, chicken, beef etc. Exports cant really be explained, Australia is the lucky country and may somehow yet again avoid a technical recession..
    • DP
      Divyesh P.
      12 May 2020 @ 02:10
      Think retail is helped by hoarding and exports helped by weak AUD
    • JJ
      Jules J.
      11 May 2020 @ 21:15
      Because Australia has had so few cases of Covid19, I don't believe Australians are taking it seriously. The shopping centres we're full on the weekend and social distancing rules not being followed at all... it seemed retail was business as usual. The potential for a second Covid19 wave, at this rate and social behaviour, it's possible.
  • PC
    Paul C.
    11 May 2020 @ 21:21
  • DR
    Derrick R.
    11 May 2020 @ 21:39
    And who is receiving the exports from China? This would be interesting to know, can China issue credit now to countries willing to take exports from them until this blows over, possibly putting China in a relatively better position as a leader in global trade and a creditor to many parts of the world once this is all over?
  • MC
    Michael C.
    12 May 2020 @ 00:26
    One discordant chart is China exports. But then again, maybe a case of CCP statistics rather than reality? Or is there evidence they have actually increased in the import numbers in other countries?
  • wc
    william c.
    12 May 2020 @ 01:36
    Could it be in fact that Australia is not the odd one out but a predictor for what happens when economies re-open? People seem still too bearish on consumer behavior when economies re-opening. There are a number of anecdotal examples starting to appear which suggest the consumer is ready and waiting to go out and spend once restrictions are lifted. The positive QoQ and YoY changes in data leaving this recession and lock down look likely to beat on the upside and that will be more fuel for the fire for equity prices.
  • SH
    Sahil H.
    12 May 2020 @ 02:23
    Australian numbers are interesting but hardly surprising. I briefly went to the shopping center on the weekend and found that no social distancing rules are being obeyed. No one wears masks. Most stores have hand santiser and are whipping down counters but self serve checkouts aren't being cleaned after every use. People were already going to beaches etc. before we even finished our lock down and our lock downs weren't stringent relative to other countries. We could have had it a bit easier because its been extremely warm, this time of the year and we're only starting to get our flu season as its only been getting cold over the last week or so (I'm in NSW by the way). Prior to plan for re-opening you could only get tested if you were presenting with symptoms & had been overseas or been in contact with people from overseas. There was some community to community tracking going on but testing was mostly focused on identifying overseas cases. During the Easter weekend when we started "flattening the curve" I saw some stats that we were doing less testing over that period. Right now from what I'm observing most testing facilities are open to anyone but its all voluntary. I haven't seen or heard of any mandatory testing going on which can seriously skew results in my opinion. The Australian governments stimulus package was massive compared to most countries (~10% of GDP from memory), whereas most countries were around 5%? (with the exception of the US). Most people that lost jobs and that are on the "job keeper payment scheme" are not classed as unemployed even if they are underemployed/not working at all and many are getting paid more money now than what they were getting when they were working full-time (AU$1500 per fortnight). As a result most Australians are extremely exuberant about what is going on and believe everything is going back to normal. This is based on the conversations I'm hearing on the radio, mainstream media, and people around me. The government is pushing schools to open and everyone to get back to work again. in my opinion the government is hoping we don't get another wave or this doesn't worsen too much because I don't think they can sustain the stimulus package for more than 3 months (6 months at the most with probably a lot of economic damage). Our big 4 banks are hit hard already from all the mortgage reliefs and loans they've given to businesses. The National Australia bank had to raise more capital because they are struggling (reporting a 51% slump in half year profits) ( Though much of those losses are money that's put aside for future losses from bad debts.
    • SH
      Sahil H.
      14 May 2020 @ 05:47
      yeah you're right Beef and Barley are a small portion of our exports but 57% of our exports are resources, and 31% of our total exports go to China. If this does escalate its pretty clear that these tariffs will leak over into other industries. I think we need China more than they need us:( You're right this could turn into nothing. However, last time we had these trade tariff issues with China it was in 2014 right? The world and our economy is in a completely different place than what it was back then. There has been underlying geopolitical tension building over the last 5-10 year with China rising as an economic super power to compete with the US. The Corona virus has created even more of a reason to divide the world between the US and China.
    • wc
      william c.
      13 May 2020 @ 04:50
      Sahil H, beef and barley exports are a very small percentage of overall export volume in nominal Aussie dollar terms. China has done this in the past too, it's nothing out of the ordinary. China needs Australia exports. I think the worst is behind us and a flair up in geopolitics is not enough to cause substantial "pain" as you stated. The risk of severing ties with China is extremely low, don't get caught up in sensationalist headline grabbing news.
    • SH
      Sahil H.
      13 May 2020 @ 02:49
      yeah its really concerning what is going to happen. I've been seeing a lot of Australian's comment on China pushing for those tariffs saying that we should walk away from China completely and we don't need them. And look I completely agree that we shouldn't let other countries push us over but I also don't think most Australian's understand the level of economic pain we will have to go through if we completely severe ties with China. To be honest I am also struggling to understand how badly this will affect Australia.
    • SS
      Shanthi S.
      12 May 2020 @ 10:00
      Totally agree with this assessment. China just suspended imports from four Australian abattoirs... What's next?
    • SH
      Sahil H.
      12 May 2020 @ 02:32
      More importantly, our politicians have been poking China pretty hard to determine the root cause of the virus and there is threats of tariffs being placed on Australian exports into China from the Chinese. From my understanding, one of the main reasons we didn't go into a technical recession during the 2008 GFC was that our dollar weakened just as China stepped up their demand for our natural resources. If our politicians decide to pick a fight with China and back the US in this, then China may not be there to save us on the back end of the recession. Keep in mind this is Australia's first recession in almost 30 years so there's going to be a lot of psychological factors/biases that will play into how Australia deals with this crises. I foresee a lot of pain coming within the next 6 months and I don't think most Australians will see it coming :(
  • RS
    Ravi S.
    12 May 2020 @ 06:28
    I’m also from Australia Retail explosion is likely grocery hoarding which will settle now Exports increase is gold and iron ore A major department store Myer chose to close trade
  • FB
    Frank B.
    12 May 2020 @ 20:58
    Just a small suggestion to increase the font size on the chart axis to a readable size.