By Shaloo Shrivastava

BENGALURU, (Reuters) – Australia’s economy contracted in the third quarter due to new lockdowns weighing on consumers spending, investments but it was less than the historical recession last year, a Reuters survey showed.

Despite Australia’s successes last year with the COVID-19 vaccine, new flare-ups and the “stay-at-home” rule this year have severely impacted economic activity. This has led to job losses and increased calls for an increase in vaccinations.

A Nov. 23-26 survey of 24 economists found that A$2.07 billion ($1.5 trillion), or 2.7%, was the economy’s contraction during the July-September period. The range of forecasts was ranging from -3.8% down to -1.9%.

It would be a dramatic turnaround in economic activity from 0.7% and 1.8% expansion rates for the January-March quarters, respectively.

Felicity Emmett (an ANZ senior economist) stated that “extended stay-at home orders in New South Wales, Victoria and Victoria will have a significant impact on consumption. Services spending is expected to be especially impacted.”

However, the growth year-over-year was at 3.0%. The third quarter of last year saw a drop of 3.6%.

The Australian Bureau of Statistics released data on Thursday showing that capital expenditure declined by 2.2% in third quarter. However, an increase to future spending indicated analysts expected a quick recovery.

The construction activity also declined in the last quarter, but at a slower rate than was expected. This indicates that a recovery is not too far away.

We expect that GDP will surpass the pre-delta levels this quarter due to investment holding up well. Consumption will probably rebound very sharply given lockdowns have now ended,” said Marcel Thieliant, senior Australia & New Zealand economist at Capital Economics.

Economists don’t see this trend becoming a recession despite the decline in economic growth over the last quarter.

Given that 86% Australian adults are now fully vaccinated, and many restrictions have been removed, there is a rapid rebound in consumer spending.

It is said that history does not repeat itself, but it rhymes. 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)