Reserve Bank Governor Philip Lowe is appearing before Parliament’s economics committee ahead of today’s Statement of Monetary Policy.
Dr Lowe has told the committee the economy has bounced back “stronger than was ever expected” but lockdowns had interrupted the recovery.
“Outbreaks mean that GDP is likely to decline in the September quarter,” he said.
But he said large parts of the economy that were not in lockdown were continuing to recover quickly, creating mixed results across the country.
He also said with vaccination programs ramping up, the central bank was expecting a clear “pathway out of the current difficulties.”
“Our central scenario is the economy will return to strong growth in 2022 with GDP increasing by a little over 4 per cent, followed by growth around 2.5 per cent percent in 2023.”
However he said the primary risk to this outlook was vaccine resistant strains of COVID-19.