AUSTRALIA’S second-most populous state has tightened coronavirus controls as a spike in cases triggers fears the nation could be hit by a second wave of infections.

Victoria extended a state of emergency by four weeks to July 20, halved the number of visitors allowed in homes to 5 and delayed a planned increase in the size of gatherings in cafes, restaurants and pubs.

The weekend announcement, and a jump in cases in countries including the US, Israel and South Korea, heightened market concerns about the difficulty of reviving economic growth while controlling the spread of COVID-19 (coronavirus disease 2019). The Australian dollar declined against most of its Group-of-10 peers on Monday, falling as much as 0.4% before recovering, while the benchmark S&P/ASX 200 index initially declined as much as 1% before recouping its losses.

Australia has managed to limit the total number of coronavirus cases to about 7,460 by closing international and state borders, quarantining returning residents in hotels, social distancing measures and a widespread testing and tracing regime. But concerns are growing about community transmission in Victoria, responsible for 116 new cases in the past week — 83% of the national total, as of June 21. Of those, 87 were largely associated with community transmission.

“This is part of living with COVID-19,” Prime Minister Scott Morrison told reporters in Sydney on Monday. “We will continue on with the process of opening up our economy and getting people back into work. But there will be setbacks from time to time.”

On Monday, Victorian health authorities announced they had detected a further 16 cases in the past 24 hours — six linked to known outbreaks, four detected in hotel quarantine, five detected through routine testing, and one under investigation.

Health authorities are warning people to avoid traveling to six areas in the state capital, Melbourne. A professional Australian Football League match scheduled to be played in the city on Sunday was postponed after a player contracted the virus.

The spike in cases may cause states and territories such as Queensland, Western Australia and Tasmania to keep their borders closed beyond July, despite pressure from Morrison to allow inter-state travel to boost tourism and buoy the shattered economy.

On Monday, health authorities in New South Wales state strongly discouraged travel to and from Victoria because of the spike. Queensland Premier Annastacia Palaszczuk told reporters that the National Cabinet was expected to discuss interstate border restrictions when it meets on Friday, describing the outbreak in Victoria as a “national concern.”

Australia’s Chief Medical Officer Brendan Murphy on Monday said he was concerned by the “fairly rapid rise” of infections over a few days in Victoria, which appeared to be caused by family gatherings. In some instances, people who had tested positive or come into contact with an infected person had failed to self-quarantine.

“Complacency is dangerous,” Mr. Murphy told the Australian Broadcasting Corp.

There was no sign the Black Lives Matter rally in Melbourne earlier this month had caused a spike, he said. Officials don’t believe the three protesters who have tested positive were infected at the rally, or transmitted it there. However, the mass protests may have encouraged other people to flout social distancing rules and gather in larger numbers, he said.

If lockdown measures are re-imposed more widely, it could further damage the economy and erode business confidence and consumer sentiment, said Nathan Cloutman, a senior industry analyst at IBISWorld. “Businesses are now less likely to restock supplies and rehire employees when social distancing is removed, out of fear that restrictions will be re-imposed before they can generate revenue to cover those costs.” — Bloomberg

RELATED ARTICLESMORE FROM AUTHOR