Covid-19: Australia Races to Stem Delta Variant as New Cases Emerge

Australian authorities are racing to contain outbreaks of the highly contagious delta strain that have forced Sydney and Darwin into lockdown and put other major cities on high alert.

The outbreak in Sydney now numbers about 130 cases, with 18 more infections announced by New South Wales state on Monday.

Residents of Greater Sydney have been ordered to stay home except for exercise, essential shopping and medical treatment until July 9, while Darwin, the capital of the Northern Territory, on Monday saw its initial 48-hour lockdown extended until Friday.

The clusters show the limits of Australia’s so-called “Covid-zero” strategy, which has relied on closed international borders and rigorous testing to eliminate community transmission of the virus. While nations such as the U.K. and U.S. are preparing to open up their economies after widespread vaccinations, a slow rollout in Australia means the economy, and particularly domestic tourism, remains vulnerable.

Doses administered so far in Australia are only enough to cover 14% of the population, compared with 51% in the U.S. and 58% in the U.K., according to Bloomberg’s Covid-19 Vaccine Tracker.

“The threat that the delta strain could meaningfully spread to other states as well means that there is significant downside risk to our forecast that the Australian economy is going to perform really strongly this year,” said Katrina Ell, an economist at Moody’s Analytics Inc. in Sydney. “Until the vaccine really speeds up, the Australian economy is going to be really vulnerable to a fit and start recovery mode as we continue to see these localized outbreaks.”

In response to the clusters emerging around Australia, states and territories are reimposing domestic border restrictions, while a quarantine-free travel bubble between Australia and New Zealand has been suspended.

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