A new outbreak in Victoria has caused daily new cases to surge to a record high in Australia. By contrast, New Zealand has maintained its elimination of the virus with new cases remaining very low and only being detected in quarantine facilities for incoming New Zealand arrivals. (See Chart 1.) As a result, we expect domestic demand in New Zealand to return to near its pre-virus level over the coming months. In Australia however, we think the fresh outbreak will cause consumption and investment to decline again. We don’t expect domestic demand in Australia to recover to pre-virus levels until the end of 2021.
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