The expectation now is that the Greater Sydney lockdown will last eight weeks and that the Reserve Bank may see a need to review its policies around its quantitative easing (bond buying) which has pumped billions of dollars into the economy and had been scheduled for tapering before the current restrictions were imposed.

But longer term, Westpac’s Bill Evans said vaccination rates could surge as Australians realised it was the only way out of the cycle of lockdowns and that would be a “game changer” for the economy and confidence.

Queensland Treasurer Cameron Dick told InQueensland the state was well positioned to continue outperforming the rest of Australia. He cited the fastest jobs growth, highest retail sales growth and fastest population growth.

“Queensland is in the position we are in today because we have decisively put the health of Queenslanders front and centre since the start of the pandemic,” he said.

“Time and again we have demonstrated that the best way to protect our economy is through fast, sharp lockdowns to contain outbreaks.

“This the best way of ensuring that any lockdowns are short.”

The ANZ said employment could also take a hit from the lockdowns and the third quarter GDP was “in doubt”. It said up to 60,000 jobs could be lost, but Westpac argued that a dramatic shift in vaccination rates could be a game changer for Australia.

“We had already revised down our expectation for third quarter GDP considerably under the previous level of restrictions, though we still had a small positive number in mind,” ANZ said.

“A negative GDP print (for the third quarter) is now increasingly likely, especially if we factor in that Victoria’s lockdown may extend beyond its five days. Much of this loss may be regained in the fourth quarter, especially if fiscal policy responds to the lockdowns by increasing payments to households (which we think should be considered).

“The prospect of a strong rebound may keep the RBA from acting, but we do think the possibility of delaying the modest tapering of bond purchases currently scheduled for September will be discussed at the RBA Board’s August meeting.”

The flow on to Queensland from the lockdowns is being felt in tourism but coal, LNG and agricultural exports from the state remain strong and unemployment is at decade lows. The drive market in tourism is also holding up.

But Google’s mobility data for Brisbane shows significant problems for business. While visits to supermarkets was up 6 per cent since the start of the pandemic’s impacts in February 2020, other retail visits was down 6 per cent and workplaces 9 per cent.

Public transport is still off limits for many Brisbane people with the data showing it was still down 40 per cent.

Outside Brisbane the impacts have not been so profound with retail visits up 1 per cent and supermarket visits up 16 per cent. Even workplace visits had improved on February 2020.

Westpac said it expected global optimism would lift as the vaccine rollout improves and the southern city lockdowns would highlight to Australians that vaccination was the only way to end the cycle.

“Optimistically, Australia can be on track for 60 per cent fully vaccinated by late November,” Westpac’s Bill Evans said.

“Australia’s adult population could become one of the most highly vaccinated globally by the first quarter of 2022.

“That would become a game changer for Australia and the confidence it would earn from markets.”