According to data released by the Australian Bureau of Statistics on Wednesday, retail sales in June fell 1.8% from May, the biggest drop since this year, as the pandemic lockdown and movement restrictions imposed in most parts of the country hit consumer demand. As COVID-19 cases continue to rise, this has cast a shadow over Australia's economic outlook for the third quarter.

An ANZ economist wrote in a report: “We expect retail sales to fall again in July as Sydney's blockade intensifies, another round of Melbourne's lockdown begins, and South Australia also enters a lockdown.”

“As the risk of a prolonged lockdown in Sydney increases, so does the risk of a weak recovery, especially when financial support is not as strong as during Melbourne's prolonged lockdown in 2020.”

Currently, most economists expect Australia's GDP to shrink in the third quarter. This will be the first contraction since the second quarter of last year.