My talk today will cover three topics. First I will provide a perspective on the historic decline in output that both the Australian and global economies have experienced and discuss the current state of the economy. Second I will explain how the monetary policy actions the Reserve Bank has taken are working to support the Australian economy, complementing the large fiscal response. Finally I will outline possibilities for further monetary policy action should the Reserve Bank Board decide that it is warranted.
The Economic Impact of the Pandemic
The pandemic has resulted in a historic decline in output in the Australian and global economy. Graph 1 shows the GDP outcomes for a range of economies. It is a truly daunting picture in terms of the size and the synchronised nature of the declines.