Australia will suffer its biggest economic contraction since the 1930s in the first half of this year due to containment measures to curb the spread of COVID-19, Reserve Bank of Australia (RBA) Governor Philip Lowe said yesterday.
Describing the contraction as a “once in a century event,” Lowe said that national output would fall by about 10 percent in the first half of this year, with most of the decline likely in the June quarter.
Unemployment is seen at about 10 percent by June as total hours worked are likely to decline by about 20 percent, Lowe added.
Photo: EPA-EFE
The jobless rate last month was 5.2 percent.
“These are all very large numbers and ones that were inconceivable just a few months ago,” Lowe said in a speech in Sydney. “They speak to the immense challenge faced by our society to contain the virus.”
Earlier, figures from the Australian Bureau of Statistics showed jobs recorded by the tax office payrolls system fell 6 percent between March 14 and April 4, suggesting about 780,000 job losses.
Australia has so far avoided the high numbers of COVID-19 casualties reported around the world after closing its borders and imposing restrictions on public movement.
Though the increase in new infections has slowed significantly in recent days, the country still has more than 6,600 cases, and economists have warned the government against easing social distancing rules too soon.
As entire sectors of the economy shut down, the conservative government announced a A$320 billion (US$201.82 billion) fiscal stimulus plan, while the RBA went all in cutting the cash rate to a record low of 0.25 percent and launching “unlimited” quantitative easing.
Lowe yesterday said it was likely the cash rate would stay at that level for a number of years, as inflation was expected to remain subdued.
“We will not be increasing the cash rate until we are confident that inflation is going to be between 2-3 percent on a sustainable period,” Lowe said in response to questions.
“It’s quite likely that we have the current setting of interest rate for a number of years and this is reinforced by our target on three-year bond yield of 25 basis points,” he added.
Lowe said he was hopeful a recovery could begin within the next three to four months, if restrictions remained in place for now, but that a recovery would be slow.
“Whatever the timing of the recovery, when it does come, we should not be expecting that we will return quickly to business as usual,” he said. “Rather, the twin health and economic emergencies that we are experiencing now will cast a shadow over our economy for some time to come.”
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday said its materials management head, Vanessa Lee (李文如), had tendered her resignation for personal reasons. The personnel adjustment takes effect tomorrow, TSMC said in a statement. The latest development came one month after Lee reportedly took leave from the middle of last month. Cliff Hou (侯永清), senior vice president and deputy cochief operating officer, is to concurrently take on the role of head of the materials management division, which has been under his supervision, TSMC said. Lee, who joined TSMC in 2022, was appointed senior director of materials management and
Nvidia Corp CEO Jensen Huang (黃仁勳) on Thursday met with US President Donald Trump at the White House, days before a planned trip to China by the head of the world’s most valuable chipmaker, people familiar with the matter said. Details of what the two men discussed were not immediately available, and the people familiar with the meeting declined to elaborate on the agenda. Spokespeople for the White House had no immediate comment. Nvidia declined to comment. Nvidia’s CEO has been vocal about the need for US companies to access the world’s largest semiconductor market and is a frequent visitor to China.
MAJOR CONTRIBUTOR: Revenue from AI servers made up more than 50 percent of Wistron’s total server revenue in the second quarter, the company said Wistron Corp (緯創) on Tuesday reported a 135.6 percent year-on-year surge in revenue for last month, driven by strong demand for artificial intelligence (AI) servers, with the momentum expected to extend into the third quarter. Revenue last month reached NT$209.18 billion (US$7.2 billion), a record high for June, bringing second-quarter revenue to NT$551.29 billion, a 129.47 percent annual increase, the company said. Revenue in the first half of the year totaled NT$897.77 billion, up 87.36 percent from a year earlier and also a record high for the period, it said. The company remains cautiously optimistic about AI server shipments in the third quarter,
Hypermarket chain Carrefour Taiwan and upscale supermarket chain Mia C’bon on Saturday announced the suspension of their partnership with Jkopay Co (街口支付), one of Taiwan’s largest digital payment providers, amid a lawsuit involving its parent company. Carrefour and Mia C’bon said they would notify customers once Jkopay services are reinstated. The two retailers joined an array of other firms in suspending their partnerships with Jkopay. On Friday night, popular beverage chain TP Tea (茶湯會) also suspended its use of the platform, urging customers to opt for alternative payment methods. Another drinks brand, Guiji (龜記), on Friday said that it is up to individual
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