Australia says unemployment rate will rise above 13% by end of September

Australia’s unemployment rate is likely to shoot up to whopping 13 per cent by the end of September, Treasurer Josh Frydenberg announced, according to a news agency report. As many as half a million Australians are feared to lose jobs that could cost the national economy between $10 billion and $12 billion. Country’s second most populous city was clamped down to stem the second wave of the novel coronavirus. Australian PM Scott Morrison said, “Government is looking at job keeper wages subsidy in the light of the deteriorating outlook,” at the press conference. 

Australia’s Treasury estimated a gross domestic product (GDP) shrink by at least 0.75 per cent in the September quarter due to the statewide shutdown, which will further raze 1.75 percentage points from growth. It stated that the recent lockdown would result in a 2.5 per cent contraction in real GDP in the September quarter.

Lockdown would push up Australia’s underlying unemployment — that’s what the unemployment rate would be if the government wasn’t paying employers to retain staff — from just over 11% to almost 14%— AP reported Australia's government as saying.

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Citing Australia's Treasury Department, Frydenberg said that at the end of July, the unemployment rate was put at 9.9 per cent which dipped from a record high of 14 per cent in April. However, he predicted that over 450,000 people might go out of jobs, of which, 5 million comprise in Victoria state capital, Melbourne. He added, the recovery from the economic turmoil from the recent lockdown that halted the business operations will be “bumpy”. Due to spike in the COVID-19 deaths in Australia, the state of Victoria earlier this month ordered the economy to close down in a lockdown that imposed movement restrictions in a bid to curb the second wave, reports confirmed. 

Lockdown, which extends across Victoria state, but is less restrictive beyond Melbourne, was expected to cost the national economy up to 9 billion Australian dollars ($6.5 billion) in the September quarter—AP reported Australia's PM Scott Morrison as saying.

This is a heavy blow. A heavy blow, Morrison said.

Government-issued permit needed

While businesses in the state of Victoria shut down once again in the government’s initiative to control the pandemic, citizens whose jobs were deemed essential had to reportedly secure a government-issued permit in order to move across the state. State-imposed the strict curfew from 8 pm to 5 am that even made masks mandatory. Melbourne lockdown hit the local economy hard, sending almost 250,000 people out of jobs thus far. 

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(With Agency Inputs)

(Image Credit: AP)