Australia's unravelling "zero Covid" strategy will cost its economy more than £500m (NZ$992 million) every week of lockdown as analysts warn restrictions in some of its most populous states could last until October.
Forecasters warned that renewed lockdowns and the glacial pace of its vaccination programme will trigger a sharp drop in GDP in the third quarter as Delta cases threaten to explode.
Economists at UBS said the current lockdown in New South Wales and its capital, Sydney, will cause a A$1b (NZ$1.05b) hit a week and cost the Australian economy a cumulative A$25b, or £13b.
If the most populous state is in lockdown for all of the third quarter and restrictions are imposed elsewhere, national GDP would fall by 2.5pc compared with the previous three months, the bank warned. Such a decline would not be as damaging as the record 7pc slump suffered in the second quarter of 2020 but would still be far larger than pre-Covid contractions.