A STRONG policy response has helped mitigate the impact of COVID-19 and the largest private sector collapse since the Great Depression, ANZ chief economist Richard Yetsenga says.

Addressing the Australian Grains Industry Conference 2020, Mr Yetsenga also noted the pandemic had also increased geopolitical tensions.

“The policy response [by governments] has no precedent. It is the largest policy response in history in terms of the number of countries that are easing, in terms of the tools that a range of countries are using.

“In terms of the size and the scale, the IMF put the fiscal response at about three times the size of the fiscal response during the Global Financial Crisis,” he said.

“So there is reliance and we do have policy makers in large part to thank.”

He said governments had learned important lessons from the GFC and had acted decisively to support their economies based upon information about businesses closing, not waiting for the publication of economic data.


Rather, new daily data had been crucial in formulating responses.

Nonetheless, the situation remains dire in some parts of the world, with Mr Yetsenga noting “the situation in the US is tracking poorly” and with that nation unlikely to return to pre-pandemic GFC before 2022.

He noted a lack of cooperation between nations on COVID-19 and increased tensions between China and the US and how China appeared to have taken “a big step forward” even as the US appeared to question its own role in the world.

Inequality was also an issue, he said, even with markets performing strongly while the less well-off were losing their jobs.

Mr Yetsenga talked of pandemics as a bi-product of climate change and the potential for nations to push harder towards their Parish Climate Agreement goals.