Goldman Sees Deepest Australian Downturn Since Great Depression

Given the rapid deterioration in the Australian economic outlook as the coronavirus causes the closure of borders and restrictions on movement, Goldman Sachs Group Inc. now forecast the sharpest annual GDP contraction since the great depression of the 1920s.

The Australian economy will shrink 6% in 2020 versus last year, economists led by Andrew Boak wrote in a report dated March 20. Most of the contraction is expected to be driven by a collapse in ‘social’ consumption, with an assumption that spending at hotels, cafes and restaurants will fall more than half, while spending on many discretionary categories will drop by up to one third.