Get ahead of the downturn with the right financial support

Olivia Gee

Wednesday 15 April 2020

Dubbing the conditions induced by the COVID-19 pandemic ‘The Great Lockdown’, the International Monetary Fund (IMF) has predicted a sharp decline in global economic growth for 2020, with Australia’s economy expected to contract by 6.7% or almost $130 billion. 

Man carries his son through the rain as he considers how to weather the economic storm during COVID-19 pandemic.

The World Economic Outlook Report also warns of a significant and enduring rise in Australia’s unemployment rate across the next two years, jumping from 5.2% in 2019 to 7.6% in 2020 and 8.9% predicted for 2021.

But there are steps you can take to prepare for an economic recession, even if you’re one of the many Aussies struggling right now. We’ve scanned the fine print and found five ways to help you move forward financially (read on for more details).

In Australia and around the world, this will mark the most significant recession since the Great Depression. Economic Counsellor and Director of the Research Department at the IMF Gita Gopinath describes it as “a crisis like no other.”

Globally, economic growth is predicted to fall to -3% in 2020; a stark contrast to the 3.3% growth anticipated in January. For scale, the Global Financial Crisis resulted in a -0.1% global economic growth in 2009.

But this IMF prediction is dependent on the assumption the pandemic will recede in the second half of 2020. If the pandemic persists later into this year and has a resurgence in 2021 (the worst-case scenario in the report), the IMF estimates the global economy would shrink by closer to 11%.

If the pandemic does fade from mid 2020 and effective policies limit widespread financial strain, Australia’s economic growth is predicted to rebound by 6.1% in 2021. But Gopinath points to the complexities all economies face in recovering from a dual health and financial crisis. 

“Policymakers are providing unprecedented support to households, firms, and financial markets, and, while this is crucial for a strong recovery, there is considerable uncertainty about what the economic landscape will look like when we emerge from this lockdown,” she said.

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How can I access financial support during ‘The Great Lockdown’?

Whether you’re a struggling rental tenant, homeowner, business owner or a recently unemployed individual, there are many packages and policies providing a short reprieve from financial burdens, and other long-term protections. 

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