ANZ researchers expect the effect of a dent in tourism to be transient and think their April rate cut is at risk due to the shift of the Reserve Bank of Australia (RBA) to a more relaxed mode. AUD/USD is trading at 0.6697 after starting the year at 0.7020.
“GDP growth in Q1 will likely turn negative, due mainly to a dent in tourism. We expect the effect to be temporary with only a small impact on full-year growth. We also expect the travel ban to add downside risks to the budget in the near term.”
“There is a growing case for the government to consider fiscal easing to offset these shocks, and the RBA has shifted to a patient mode, which puts our call for an April rate cut at risk.”