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Australia to reopen to foreign visa holders in bid to revive economy

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Australia will allow foreign visa holders to enter the country from the start of December, Prime Minister Scott Morrison said on Monday, the latest step to restart international travel and support its economy.

Australia shut its international border in May 2020 and allowed only restricted numbers of citizens and permanent residents to enter in a bid to curtail the spread of COVID-19.

The rules were relaxed in recent weeks to allow foreign family members of citizens to enter, and Morrison said this will be scaled up from Dec. 1 to allow vaccinated students, business visa holders and refugees to arrive.

“The return of skilled workers and students to Australia is a major milestone in our pathway back,” Morrison told reporters in Canberra. Australia will also allow in vaccinated tourists from South Korea and Japan from Dec 1, he said.

The return of foreign students, who are worth about A$35 billion ($25 billion) a year to the Australian economy, will be a major boost for the education sector.

More than 235,000 foreigners, including about 160,000 students, held visas for Australia at the end of October, government data showed.

Many Australian universities have come to rely on foreign students, who make up about 21% of total enrolments, and the border closure led higher education facilities to lay off hundreds of staff.

Many students locked out of Australia have said they would switch to alternative universities if they were unable to begin face-to-face learning in 2022.

The relaxation of the border rules is also expected to ease labour shortages, which threaten to stymie an economic rebound.

“This will be critical relief for businesses who are struggling to find workers just to keep their doors open and for those who need highly specialised skills to unlock big projects,” said Jennifer Westacott, chief executive of the industry body, the Business Council.

Border rules, swift lockdowns and tough social distancing rules helped Australia to keep its coronavirus numbers far lower than many other comparable countries, with around 200,000 cases and 1,948 deaths.

Most new infections are being reported in Victoria state, which logged 1,029 cases on Monday. New South Wales, home to Sydney, reported 180 cases. Other states and territories are COVID-free or have very few cases.

($1 = 1.3824 Australian dollars)

(Reporting by Renju Jose and Colin Packham; Editing by Richard Pullin)

Economy

Australia's economy likely contracted in Q3 but recovery expected soon – Financial Post

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BENGALURU — Australia’s economy likely contracted in the third quarter as fresh lockdowns weighed on consumer spending and investments, but the extent of the fall was milder than the historic recession recorded last year, a Reuters poll showed.

Despite Australia’s success last year in containing the COVID-19 virus, fresh flare ups and the stay-at-home rule imposed this year severely dented economic activity leading to job cuts and calls for a ramped-up vaccination drive.

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The Nov. 23-26 poll of 24 economists showed the A$2.07 trillion ($1.5 trillion) economy contracted 2.7% during the July-September quarter. Forecasts ranged from -3.8% to -1.9%.

If economists predictions were realized, it would mark a sharp turnaround in economic activity from the 1.8% and 0.7% expansion rates in the January-March and April-June quarters respectively.

“Extended stay-at-home orders in New South Wales and Victoria will have hit consumption, with services spending set to be particularly impacted,” said Felicity Emmett, senior economist at ANZ.

The year-over-year growth was estimated at 3.0% but that was over a decline of 3.6% in the third quarter last year, revealing no substantial growth.

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Data released by the Australian Bureau of Statistics on Thursday showed capital expenditure https://www.reuters.com/markets/rates-bonds/australia-q3-business-investment-slips-outlook-surprisingly-resilient-2021-11-25 fell a real 2.2% in the third quarter but an upgrade to future spending showed analysts were expecting a rapid recovery to take hold.

Construction activity too declined last quarter but at a much smaller rate than expected, showing a recovery was not far off.

“The fact investment held up pretty well, we expect GDP to surpass its pre-delta level this quarter. Consumption will probably rebound very sharply given lockdowns have now ended,” said Marcel Thieliant, senior Australia & New Zealand economist at Capital Economics.

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Despite the setback to economic growth last quarter, economists do not see that trend turning into a full blown recession.

With about 86% of Australia’s adult population now vaccinated and most restrictions eased, a swift recovery is anticipated on higher consumer spending.

“There is a saying that while history doesn’t repeat, it does rhyme. The pattern for GDP in the second half of 2021 is certainly rhyming with the middle quarters of 2020 – a sharp decline followed by a large bounce,” wrote economists at ANZ. ($1 = 1.3986 Australian dollars)

(Reporting by Shaloo Shrivastava; Polling by Md. Manzer Hussian and Devayani Satyan; Editing by Marguerita Choy)

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China's Economy Likely Remained Weak as Factories Slump – Financial Post

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(Bloomberg) — China’s manufacturing activity likely remained subdued in November, with weak domestic demand in the economy outweighing any relief that came from an easing in energy shortages.

The official manufacturing purchasing managers’ index is forecast to improve slightly to 49.7 from 49.2 in October when it’s released Tuesday, according to the median estimate in a Bloomberg survey of economists. That would be the third month it stays below the key 50-mark, indicating a contraction in production. 

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The non-manufacturing gauge, which measures activity in the construction and services sectors, is forecast to fall to 51.5 from 52.4 in the previous month. 

China’s energy shortages, which ravaged factory production in September and October, likely eased this month as coal producers boosted output and inventories rose. However, the housing market crisis shows no signs of ending, and frequent Covid-19 outbreaks continue to curb consumption.

“Supply-side restrictions have improved marginally, so production likely rebounded somewhat,” said Xing Zhaopeng, senior China strategist at Australia & New Zealand Banking Group Ltd. But there’s “not much positive signal on domestic demand,” which continued to weigh on activities, he said.

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Economic growth is forecast to slow to 5.3% next year, according to a Bloomberg survey median, with some economists seeing expansion as low as 4%. Bloomberg Economics forecast growth will come in at 5.7%, as the government will likely target a 5-6% range.

What Bloomberg Economics Says…

“In 2021, policy played a secondary role in setting the growth trajectory. In 2022, it will be pivotal. The extent of the slowdown will hinge largely on what balance China strikes between supporting short-term growth and advancing long-term reforms.

…We see the People’s Bank of China cutting the interest rate on its one-year medium-term lending facility by 20 basis points and the reserve requirement ratio by 100-150 bps by end-2022.”

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— Chang Shu and David Qu

For the rull report, click here

Authorities are trying to moderate the sharp downturn in the property market, while providing targeted support to areas such as small businesses and green technology. Officials will reveal more clues on how much policy easing they plan to provide during two key political meetings in December by the Politburo and the Central Economic Work Conference.

China will adopt a more proactive macroeconomic policy next year to respond to the challenges from an uneven recovery of the global economy and instability in containing the pandemic, the Securities Times, run by the People’s Daily, said in a front-page commentary Monday. 

Authorities have exercised restraint in using monetary and fiscal tools amid an economic slowdown this year, thus creating sufficient space for policy maneuvering next year, according to the commentary.

The slowdown is being cushioned by strong export demand, which likely remained solid in November, judging by latest shipment figures from South Korea.

Consumption and travel continues to be affected by a resurgence in virus cases and the country’s growing determination to stick to its strict Covid Zero strategy. Subway passenger traffic in six major cities of China declined less than 10% in November from October, though the plunge is smaller than that over the August outbreak, according to Xing. 

©2021 Bloomberg L.P.

Bloomberg.com

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China's Economy Likely Remained Weak as Factories Slump – Bloomberg

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China’s manufacturing activity likely remained subdued in November, with weak domestic demand in the economy outweighing any relief that came from an easing in energy shortages.

The official manufacturing purchasing managers’ index is forecast to improve slightly to 49.7 from 49.2 in October when it’s released Tuesday, according to the median estimate in a Bloomberg survey of economists. That would be the third month it stays below the key 50-mark, indicating a contraction in production. 

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