Coronavirus to hit Australian GDP

Coronavirus to hit Australian GDP

Mr Jarman noted official data showed that 60 per cent of travel services exports relate to the education sector, rather than to business or other personal travel.

“Average spend per visitor for the purpose of education is much higher than other types, reflecting the fact that tuition payments are a large share of the associated outlay.”

The risks to the economy from travel lockdowns excludes the likely slowdown in production in China and the possibility of lower demand for key imports from Australia such as iron ore.

There is also risk of a broader downside to Asian growth.

ANZ economists think the hit will be harder in the first quarter.

“We assess that Australia’s GDP could be around 0.2 percentage points lower in 2020 as a consequence of the coronavirus, with most of this being felt in Q1 and Q2,” market economist Hayden Dimes said.

“The most direct impact on the Australian economy will be fewer international visitors from China. This will be material, as China now accounts for almost 16 per cent of international visitors and 27 per cent of total visitor expenditure.

“This will be an overestimate if the virus is rapidly contained and an underestimate if its severity increases dramatically.”

KPMG’s Brendan Rynne and Michael Malakellis have estimated the initial impact of the lockdown in travel to be smaller.

“The initial downturn in the Chinese economy has a causal effect of reducing the Australian economy by about A$0.7 billion by the end of 2020.”

“We note this is a moderate scenario. It doesn’t include a ‘contagion scenario’,” they said.

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