Treasurer Josh Frydenberg agrees with the central bank that the impact on the economy from the outbreak of the coronavirus Delta variant will be short-lived.
Reserve Bank of Australia governor Philip Lowe expects the economy to contract by at least two per cent in the September quarter as a result of lockdowns in the nation's two most populous states.
"This is a major setback, but it is likely to be only temporary," Dr Lowe said in a speech on Tuesday.
"Our central message is that the Delta outbreak has delayed, but not derailed, the recovery of the Australian economy."
Mr Frydenberg agrees with this outlook.
"We will see in the September quarter the economy contract, but we also know from our previous response to the pandemic that we went through last year it bounces back pretty quickly," he told the Nine Network on Wednesday.
However, Dr Lowe warned the unemployment rate could reach the "high fives" for a short period of time, after reaching a 13-year low of 4.6 per cent in July.
Economists expect Thursday's Australian Bureau of Statistics labour force report for August to show the jobless rate has risen to five per cent.
Still, confidence among consumers and businesses has held up relatively well in the face of the COVID-19 lockdowns in NSW and Victoria.
While business confidence remains in negative territory, it's not as severe as in 2020 when the pandemic and a subsequent recession hit Australia.
The latest National Australia Bank business survey showed trading conditions improving in August and, notably, forward orders rebounded after a weak result in July.
ANZ senior economist Catherine Birch said it was further evidence Australia was well placed to recover from the Delta variant setback.
The monthly Westpac-Melbourne Institute consumer sentiment survey for September will be released on Wednesday.
