Australia's forest fires have not waned for months, causing widespread damage to the local environment, ecosystems and wildlife, sparking global concern. The industry fears that the fires could adversely affect the economy, triggering a ripple effect.
The Australian fire, which began in September 2019 and lasted nearly four months, left at least 24 dead, hundreds of homes and thousands of hectares of land destroyed. Against this backdrop, Australia's already weak economy is under further strain.
“The wildfires are not conducive to Australia's economic growth in the fourth quarter of 2019 and the first quarter of 2020, and in particular will hurt the country's economic activity in areas such as tourism, regional trade, construction and agricultural production. Eleanor Creagh, Australian market strategist at Shengbao Bank, told the Shanghai Stock Exchange that she expected the fires to cost the Australian economy billions of dollars.
The fire also hit market confidence. ANZ-Roy Morgan's weekly consumer confidence survey data showed that in the first week of 2020, Australia's consumer confidence fell to its lowest level in nearly four years, down% from its previous survey. And between 2010 and 2019, the data averaged% in the first week of January.
Market confidence was in a worse shape just after the start of 2020, with ANZ's head of the Australian economy, David Plank, blaming the forest fires, believing there could be dire news of the blaze later in the current hot weather.
The uncertainty facing economic growth may have an impact on Australia's monetary policy. Shane Oliver, head of investment strategy at AMP Capital in Sydney, predicted the fire could bring Australia's economic growth to a standstill in the first quarter of the year and force the RBA to cut interest rates ahead of schedule.
“At a time when the government is reluctant to relax its fiscal policy, the fires have fueled the RBA's loose monetary policy, which is expected to cut interest rates by 25 basis points in February. said Eleanor Craig.
As one of Australia's closest trading partners, whether China's related industries will be affected by the fire is also under scrutiny. For now, the market believes that the impact area is focused on energy.
“China is Australia's leading energy trading partner in areas such as coal, gas, iron ore and bauxite. Some listed companies in China invest directly or indirectly in raw ore in Australia. After the fire, the local mine is not likely to expand production in the short term, may curb the production of coal, rare earth ore, bauxite, and some products such as rare earth and bauxite are expected to increase prices. Ren Zhenming, market analyst at online financial services dealer CMC Markets, told the Shanghai Stock Exchange.
Prior to the market rumors that the Australian fire affected Rio Tinto port Cape Lambert export terminal, caused damage to some of the facilities, but also forced to close some of the export terminals. It is also rumored that the east coast wildfires have spread to the mine-intensive western coastline. Mysteel responded on the 8th that there was no large-scale fire at rio's port terminal, but only a small fire caused by the handling of the cargo ship, which had been completely resolved and had no impact on the shipment.
Ren Hui, author of eco-science, told the Shanghai Stock Exchange that record high temperatures, persistent droughts and Australia's inability to cope with the disaster.