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Chief economist update: Still the best and better than all the rest

Victorian supermarkets - Woolworths and Coles - have re-introduced buying limits in their stores as hoarders and panic-buyers returned, raiding shelves of toilet paper, paper towel, hand sanitiser, rice, pasta, flour, sugar and the like following reports of increased coronavirus infection cases in the Australian state.

It's become so concerning that state premier Dan Andrews has reportedly sought assistance from the Australian Defence Force (ADP) to help deal with the rising rate of infections. Other states are anxiously monitoring developments in Victoria with NSW premier Gladys Berejiklian urging Sydneysiders not to travel to Melbourne "unless they have to" while indicating that Victorians are not welcome north of the border.

As Federal Health Minister Greg Hunt put it: "We're operating as one single country ... Therefore we're taking it very seriously and we are giving all out resources needed to give our support."

Then again, to put the curse of the coronavirus in perspective, Australia remains the 'Lucky Country' it's been branded.

According to worldometer.com, Australia recorded 7521 total cases of infections, 29 new cases and 103 total deaths as at June 25.

These are worrying stats especially when compared with our next door neighbour, New Zealand, which only has 1,516 total cases to date - 1 new and a total of 22 deaths - but is miniscule when compared with the US - 2,463,166 total cases; 38,998 new cases; and 124,279 total deaths - or Brazil - 1,192,474; 38,998; 53,874 - or Russia - 606,881; 40,995; 8,514.

Some would claim that this is because Australia has a smaller population compared to these countries. However, as worldometer.com figures show, Australia has only 295 total cases per one million of the population (0.03%). The same stat is higher in the US (0.74%); Brazil (0.6%); Russia (0.4%); and equals New Zealand (0.03%).

The International Monetary Fund's (IMF) recently-released 'World Economic Outlook, June 2020' update reinforces the luck of Australians (sorry Ireland).

The IMF its 2020 world GDP growth forecast by 1.9 percentage points (from its April 2020 prediction) to 4.9, with the contraction in all G7 economies revised deeper.

As luck would have it, the IMF revised the country's outlook - it now expects Australian GDP to fall by 4.5% this year, a 2.2 percentage point improvement from its April forecast.

This is the same message delivered by the 'OECD Economic Outlook, June 2020' report, which has Australia's economy being the least worst among the club of rich nations, forecasting Australia's 2020 GDP "to fall by 6.3% in the double-hit scenario and 5% in the single-hit scenario" - compared with -7.3% (single-hit) and -8.4% (double-hit) for the US.

But it's not luck, it's the Federal Government and the Reserve Bank of Australia's (RBA) early and pro-active intervention policies.

The coronavirus pandemic has freed the Morrison government - or any government of the day since Treasurer Wayne Swan - from the promise of achieving that ever-elusive Budget SURPLUS. It has given it license to go forth and spend to save the economy from its first and only recession in 29 years.

Even better, Australia has retained its AAA credit rating despite the government's massive spending.

As Moody's Investor Service noted when it recently maintained Australia's AAA rating with a stable outlook, "...the resilience of the Australian economy supports a return to positive growth next year, without any significant long-lasting impact on growth potential once the crisis passes".

Read our full COVID-19 news coverage and analysis here.

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