By Keri Algar
SYDNEY, NSW: While the eastern states begin the clean up after flood devastation, and now Victoria is similarly engulfed by rising waters, the Federal Government is taking stock of the financial ramifications.
Analysts predict the federal budget will feel more of a punch than a pinch as an economic domino effect of infrastructure reparation, spoilt agriculture and mortgage defaults pressure the Government’s already tightened purse strings.
This economic fallout however, could have a flipside with the retail sector experiencing increased demand as durable goods and electrical appliances ruined in the inundations are replaced, according to IbisWorld.
The information analysts predict Australia’s GDP forecast to downgrade from 2.9 per cent to 2.6 per cent as a result of the negative impact on tourism, agriculture, insurances and a reconstruction cost of an expected $10 billion.
“From the second quarter of 2011, IbisWorld anticipates the floods will provide a boost to economic growth through the rebuilding of infrastructure and property including roads, railways, bridges, houses and businesses, as well as replacing household durable goods,” said the report.
Meanwhile, Fujitsu General has advised Current.com.au that it has donated $50,000 to the Queensland Premier’s Flood Relief Appeal.
“The damage caused by the floods is absolutely devastating and our thoughts are with all of those who have been affected,” said Kenji Shimizu, managing director, Fujitsu General Australia.
The death toll of the Queensland floods has been confirmed by authorities at 20.