Post-virus China stimulus will help Aust

Chinese economic stimulus in response to the deadly coronavirus will help Australia return to improved growth, Reserve Bank Governor Philip Lowe believes.

The RBA boss' comments at an Australia-Canada Economic Leadership Forum in Melbourne gave hope to the market.

Australia's annual economic growth is expected to pick up to 2.75 per cent by the end of the year and to three per cent by the end of 2021.

Growth stood at a more modest 1.7 per cent in last year's September quarter.

Dr Lowe says if a recent slowdown in fresh coronavirus cases is repeated, the improvement the RBA is expecting can still be achieved.

China has made it clear it plans to stimulate its economy in response to the virus, including through measures to support credit and some infrastructure spending, he noted.

"Just in the last couple of days, the infection rate seems to have come down," Dr Lowe told the event on Thursday.

"There are still a lot of people getting infected but the infection rate is coming down, so if that continues, I think we can have reasonable optimism that the number of cases has stabilised.

"Once the infection rate stabilises, the number of cases is not rising, I think we'll see Chinese stimulus. That will be good for us and we'll return to that gradually improving trend we looked like we were on before the virus."

There were 2015 new confirmed cases of the virus, now officially known as COVID-19, reported in China on Wednesday, the lowest number since January 30.

But the figure was dwarfed by 14,840 new cases reported in Hubei province, the epicentre of the virus, on Thursday.

Provincial officials said they had adopted a new methodology for counting infections.

Health officials in Hubei also said 242 people had died from the flu-like virus on Wednesday, the fastest rise in the daily count since the pathogen was identified in December, and bringing the total number of deaths in the province to 1310.

Austrlaian Associated PressBack to Breaking News

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