An exceptional week for economic reports will reveal the damage to the economy from a series of coronavirus lockdowns and whether Australia has managed to avoid a recession at this point.
The June quarter national accounts, which include the latest economic growth figures, are released on Wednesday.
It will show annual economic growth at an extraordinary rate of around nine percent, reflecting the momentous recovery from last year’s recession and the huge seven percent contraction in the June quarter of last year that has been removed from the equation.
However, for the June quarter itself, economists’ forecasts focus on a slight expansion of 0.5 percent. The forecast ranges from strong growth of 1.2 percent to a slight contraction of 0.1 percent.
If the latter turns out to be correct, that theoretically puts Australia in its second technical recession in as many years, with the September quarter widely expected to show a sharp contraction due to multi-state lockdowns.
“A double-dip recession is possible, but in our opinion unlikely,” ANZ economists said in a note to clients.
“While we cannot rule out a statistical oddity, it is difficult to match a negative second quarter GDP result with record business conditions, an almost 3% increase in hours worked in the quarter and an increase in 22% of job postings, ‘they said.
Economists will confirm their forecasts after a release of quarterly reports earlier this week.
The Australian Bureau of Statistics will release its “Trade Indicators” report for the June quarter on Monday, which is expected to show corporate profits up 2.5% and inventories up 1%.
However, Tuesday’s international trade figures are expected to show net exports (exports minus imports) slipping 0.8 percentage points from growth.
Figures from last week showed a strong contribution to growth in business investment in the quarter, but a surprisingly weak set of housing construction figures. These numbers are in addition to the positive retail sales figures reported earlier.
There is also a range of more up-to-date housing-related figures during the week.
On Tuesday, the Reserve Bank will release its monthly credit data for July and ABS will issue building permits for the same month.
CoreLogic will release its August home value index on Wednesday, while ABS will release July loan numbers on Thursday.
Meanwhile, Australian stocks are expected to start the week positively after stocks gained on Wall Street on Friday after the head of the US central bank said in a key speech he was in no rush to pull the support for monetary policy.
U.S. Federal Reserve Chairman Jerome Powell has allayed fears he was about to ease his stimulating bond-buying program and sent investors into optimistic moods over the weekend.
The Dow Jones Industrial Average rose 242.68 points, or 0.69%, to 35,455.8, the S&P 500 gained 39.37 points, or 0.88%, to 4,509.37 and the Nasdaq Composite added 183.69 points, or 1.23%, to 15,129.50.
Australian equity futures rose 13 points, or 0.17%, to 7,441.
On Friday, the benchmark S & P / ASX200 closed down 2.9 points, or 0.04%, at 7488.3, pending Mr. Powell’s speech.