Australia’s economic recovery will be boosted more by domestic borders opening than international ones, Westpac’s chief economist has claimed.
While Aussie businesses are anticipating a strong economic recovery when international borders open it may actually present a “double-edged sword”, Bill Evans is expected to tell the Flight Centre Travel Group’s corporate travel conference, Illuminate.
Sharing insights from his upcoming keynote presentation, Evans said he expected the opening of state borders for travel would contribute more to Australia’s economic bounce-back than international travel.
“Open domestic borders for travel will be critical to a strong economic fightback because when you look back at consumer spending in 2019, Australians spent $55 billion overseas, while tourists here on our shores only spent $25 billion,” Evans said.
“Some people will rightly be cautious about flying to a nation where their hospital system isn’t as good as ours, so there’s a real opportunity here for domestic travel to lead the way, which will be music to the ears of tourism operators doing it tough. But the borders have to be open for that.”
When will we be back to ‘normal’?
By around mid-next year, according to Evans.
Cautiously optimistic about the economic recovery overall, Evans said the comeback would be gradual to begin with, with November and December looking particularly slow.
“The boost in stimulus packages that allowed Australians to continue spending, and accumulate savings, will prove fruitful once all our borders reopen,” he said.
“By mid-next year we will see a complete opening up of the country and our economy will be able to bounce back strongly, underpinned by strong household savings and a booming housing market.”
Evans said the quicker we reached our vaccination goals, the faster the country would be able to bounce back.
“I expect a strong recovery in 2022 and I’m optimistic our unemployment rate will come down even further by the end of next year,” he said.