Economic Update – September 2020

Reg GranthamEconomyLeave a Comment

The Reserve Bank forecasts the economy will contract 6% this year before rebounding 5% in 2021. The recent company reporting season provided an insight into the financial impact of COVID-19 on the economy and for investors.

Only 75% of ASX 200 companies reported a net profit in the year to June. Full-year earnings were down 38% on aggregate, while dividends were down 36%. 53% of companies either cut or didn’t pay a dividend, a move that will affect investors who depend on dividend income from shares.

The current cash target rate of 0.25% has been left unchanged and is expected to remain at its current level for the foreseeable future.

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