RBA governor Philip Lowe delivered some optimistic remarks about the Australian economy recently when he let on that employment levels in the country could have declined by less than expected during Q2 2020. While addressing a parliamentary committee, Lowe stated that employment levels could have fallen by only around 15% in the second quarter of the year, against previous expectations for a 20% decline.

While this is certainly some news to cheer, Lowe has cautioned that the economic outlook for Australia still remains highly uncertain even as it reopens after weeks of shutdown. However, he also hoped that the downturn would not be as severe as previously anticipated because Australia was able to manage the coronavirus crisis far better than several other countries worldwide.

In addition, the several stimulus measures rolled out by the government and the RBA, including the unlimited QE program, have helped cushion the economic fallout from the pandemic. Initially, the government had estimated that the shutdown would have to last for up to six months for the pandemic to be brought under control.

Lowe also stated, “The shape and timing of that recovery depends not only on when restrictions are lifted, but also on the confidence that Australians have about their own health and their finances. With the national health outcomes better than earlier feared, it is possible that the economic downturn will not be severe as earlier thought. Much depends on how quickly confidence can be restored.”