Prior to Omicron, the economy had established strong positive momentum. It had bounced back quickly following the Delta-related lockdowns. This momentum, though, wasn’t sustained into the new year with Omicron leading to many people having to isolate at home and interrupted supply chains, and it affected spending as people limited their activities.
Yet, once again, the economy has shown remarkable resilience. Australians have adjusted and they’ve adapted and we still expect GDP growth to be positive in the March quarter, although only modestly so.
The worst of the disruptive effects from Omicron now appear to be behind us. Supply chains and workforce management issues, which have been significant, are gradually being addressed. And I think as case numbers trend lower over the weeks ahead, the economy will bounce back strongly and we’ll see a sharp pick up in spending.
While Omicron has delayed the recovery of the Australian economy, it’s not derailed it.