The wildfire is endless! Latest emergency alert: Australian fire fears a comeback, pressure to cut interest rates is even greater ...
The Australian economy is entering 2020 with a severe flu. With the economic slowdown and high unemployment, a wildfire that seems to be "burning out" has pushed the Australian economy into a more painful abyss.
Since September 2019, forest fires in Australia have been raging along the coastline. Except for the Northern Territory, fire emergency warnings have been issued in other parts of Australia. There are still more than 260 fire fields burning.
According to foreign media reports, the burned area exceeded 10.3 million hectares (25.5 million acres), which is equivalent to the entire South Korea, killing 26 people, leaving thousands homeless, and thousands more were forced to evacuate multiple times. An estimated 500 million mammals, birds and reptiles died in the fire. Affected by forest fires, Australia was shrouded in haze in many places, and the air quality of the capital Canberra was at the bottom of the world's major cities.
Droughts in the past three years have made most bush areas in Australia vulnerable to fires, creating the current crisis.
At present, the fire has caused more than 9,000 insurance claims, totaling more than 700 million Australian dollars. It is expected that this number will continue to rise as the fire develops. According to statistics, a "Black Saturday " fire in Victoria in 2009 killed 173 people and caused an area of only 4,500 square kilometres with a loss of $ 4.4 billion.
To make matters worse, the current high temperature may help the Australian wildfire make a comeback, and Australian authorities have issued a new evacuation alert.
On January 9, Australian authorities issued new alerts and evacuation notices across the southeast of Australia. The return of hot weather fueled the wildfire ravages, and several towns and communities were at risk.
Australian authorities have said that the fire will continue to linger before the heavy rain, which is extremely dangerous in hot and windy environments.
The official meteorological agency's annual report on Thursday showed no signs of significant rainfall in the coming months, confirming the concerns. The report also shows that 2019 is the hottest and driest year on record for Australia.
Victoria's Emergency Rescue Minister Lisa Neville said at a television broadcast press conference, "Don't think you can relax in the recent rain," she said, referring to the cooler temperatures in recent days, which allowed firefighters to burn for months. Strengthen the isolation belt around the ignition point.
"These wildfires are definitely moving, and the fires will get bigger and bigger, posing a major threat to the community," Neville said.
RBA fears to cut interest rates again in February?
The Australian wildfire has been going on for four months, bringing devastating blows to production activities in many areas of the country. This has also made the Australian economy, which was already injured in the trade dispute, face more difficulties. Under this situation, The Reserve Bank of Australia's expectations for a rate cut at the February policy meeting also further heated up, posing an additional blow to the Australian dollar.
The Reserve Bank of Australia cut interest rates three times last year, and the benchmark interest rate has fallen to a record low of 0.75%. Many analysts expect to cut interest rates twice more this year.
Australian interbank interest rate futures expanded this week, suggesting a 50% chance of a rate cut as early as next month, as the global economy faces growth risks and the domestic economy is threatened by wildfires.
According to media reports on the 7th, the devastating forest fires this summer have caused Australia's economic losses to look at $ 2 billion, and it is still rising.
Australian Prime Minister Scott Morrison and his conservative government have been criticized for not doing enough to address domestic and international climate issues. The Australian Prime Minister reportedly announced on Monday that the government would invest $ 2 billion over two years to recover the fire jungle.
Terry Rawnsley, head of economic and social relations at SGS Economics and Planning, analyzed in the report that it is estimated that direct economic losses in the tourism, agriculture and retail industries in the wildfire-affected areas in Australia this fiscal year will be about A $ 1.1 billion to A $ 1.9 billion.
Rawnsley also pointed out in the report that the smoke from this wildfire covering major Australian cities may lead to decline in productivity, increased spending and health concerns, etc., which will reduce Australia's economic output by about A $ 500 million, a total of 15 Australian wildfires caused 15 Economic losses of between $ 100 million and $ 2.5 billion. The above figures are based on estimates of losses after a forest fire in Tathra last year.
The wildest fire season coincides with the peak of Christmas shopping and the peak tourist season, which is likely to weigh on economic growth in December and January.
AMP Capital Investment Strategy Chief Shane Oliver estimates that the impact of the fire on Australian GDP will be about 0.25 to 1 percentage point, which will also make the RBA feel more pressure to cut interest rates.
At the same time, data showed that the number of job advertisements in Australia in December fell by the largest in seven months, and was affected by forest fires in the two most populous states.
ANZ senior analyst Catherine Birch said: "In the last two weeks of December, the number of job advertisements fell more than we expected in this period, indicating that the intensified wildfire crisis has affected."
Economists point out that the RBA is expected to cut interest rates again next month due to fears that the fire may make Yuan already cautious consumers spend less.
David Bassanese, chief economist at BetaShares Capital, said on Monday (January 6) that raging forest fires across Australia could weigh on the economy as the country's tourism and consumer industries have been hit.
"I think (RBA) should do more," Bassanese said. He expects the central bank to cut interest rates twice more in the first half of 2020.
The economist said, "Even before the fire, I thought they would cut interest rates twice more given the weak economy. It is likely that interest rates will be cut again in February and then again in the coming months."
ANZ senior economist Felicity Emmett said: "In response to rising unemployment, the RBA may cut interest rates twice more in February and May, but by the second half of this year, we expect leading indicators to rise. The Fed will stick to it unless it is impacted. "