• Friday, Mar 05, 2021
  • Last Update : 02:31 am

Australia enters recession after 3 decades of growth

  • Published at 10:02 am September 2nd, 2020
A lockdown of five million people in Melbourne has compounded the problems for the Australian economy AFP

Australia's economy shrank 0.3% in the previous three months 

Australia has entered its first recession since 1991 after the economy shrank 7% in the second quarter, official figures showed Wednesday, as the country reels from the coronavirus pandemic. 

The Australian Bureau of Statistics said it was the fastest quarterly contraction on record and ends a three-decade run of economic growth that was undented even by the global financial crisis. 

The bureau's head of national accounts, Michael Smedes, said the pandemic and containment efforts were to blame for the "unprecedented" drop that exceeded previous records "by a wide margin". 

A recession is defined as two consecutive quarters of contraction. Australia's economy shrank 0.3% in the previous three months. 

The widely expected result is in line with earlier government predictions that gross domestic product would contract 7% in April-June. 

"The June quarter saw a significant contraction in household spending on services as households altered their behaviour and restrictions were put in place to contain the spread of the coronavirus," Smedes said. 

Hours worked fell almost 10% while cash payments of social benefits rose more than 40%, both records for the country. 

Also read - Australia to probe foreign influence at universities

Trade also took a hit during the quarter, with imports of goods down 2.4% and exports of services dropping 18.4%, the bureau's figures showed. 

The government has stumped up tens of billions of dollars to fight the economic fallout from pandemic. Australia's forced shutdown earlier in the year crippled the economy and a current lockdown of five million people in Melbourne has compounded its problems. 

The country was already reeling from a prolonged drought and massive bushfires that had rattled the economy before the disease struck. 

Australia has now confirmed almost 26,000 cases of Covid-19 and 663 deaths from the virus, the vast majority in Melbourne and its surrounds since July. 

The government in July predicted a return to growth in the third quarter as virus restrictions eased. But the closure of non-essential businesses in Melbourne, the country's second-biggest city, could stifle the recovery. 

Authorities expect national unemployment to peak at 9.3% in December and the budget deficit to blow out to almost a tenth of GDP by mid-2021. 

Facebook 54
blogger sharing button blogger
buffer sharing button buffer
diaspora sharing button diaspora
digg sharing button digg
douban sharing button douban
email sharing button email
evernote sharing button evernote
flipboard sharing button flipboard
pocket sharing button getpocket
github sharing button github
gmail sharing button gmail
googlebookmarks sharing button googlebookmarks
hackernews sharing button hackernews
instapaper sharing button instapaper
line sharing button line
linkedin sharing button linkedin
livejournal sharing button livejournal
mailru sharing button mailru
medium sharing button medium
meneame sharing button meneame
messenger sharing button messenger
odnoklassniki sharing button odnoklassniki
pinterest sharing button pinterest
print sharing button print
qzone sharing button qzone
reddit sharing button reddit
refind sharing button refind
renren sharing button renren
skype sharing button skype
snapchat sharing button snapchat
surfingbird sharing button surfingbird
telegram sharing button telegram
tumblr sharing button tumblr
twitter sharing button twitter
vk sharing button vk
wechat sharing button wechat
weibo sharing button weibo
whatsapp sharing button whatsapp
wordpress sharing button wordpress
xing sharing button xing
yahoomail sharing button yahoomail