Covid plunges Australia into recession for first time in 30 years as pandemic paralyses business activity
Australia is in recession for the first time in almost 30 years after coronavirus curbs paralysed business activity.
Data from the Australian Bureau of Statistics showed the country’s economy shrank 7 per cent in the three months to the end of June having contracted by 0.3 per cent in the first quarter of the year.
It was the biggest decline in quarterly GDP since records began in 1959 and signalled Australia’s first recession since 1991.
Data from the Australian Bureau of Statistics showed the country’s economy shrank 7 per cent in the three months to the end of June having contracted by 0.3 per cent in the first quarter
A host of countries – including the UK, US and Germany – have also plunged into recession in the wake of the Covid- 19 outbreak.
‘This crisis is like no other,’ said Australia’s treasurer and Deputy Leader of the Liberal Party, Josh Frydenberg.
‘Our record run of 28 consecutive years of economic growth has now officially come to an end.’
Australia was the only major economy to avoid a recession during the 2008 global financial crisis, mainly due to demand from China for its natural resources.
But Frydenberg told Australians that ‘we have your back’.
The politician said: ‘We will be with you through this crisis and all the way out of this crisis.’
More than a million people have lost their jobs since March when Australia shut down entire sectors of the economy, hitting private sector demand and investments.
The government did step up with more than A$300billion of stimulus, though the gloomy data underlines the need for more stimulus.
‘The path back from the Covid-19 recession will be protracted,’ said Sarah Hunter, chief economist for BIS Oxford Economics. ‘We expect it to take until early 2022 for activity to return to prepandemic levels.’