In the last quarter, the closures of hotels, restaurants and other services due to the pandemic were clearly hit: household consumption fell by more than 12%, while spending on services fell by almost 18%.
“We have done our best to soften the blow to the Australian community from Covid-19,” Treasurer Josh Friedenberg said in Canberra on Wednesday. “Saving lives and ensuring that the Australian health system is able to test, track and treat coronavirus cases has been and will remain our priority.”
“This will have a big impact on the September numbers,” added Friedenberg.
The recession will put pressure on the Reserve Bank of Australia to consider additional measures to keep the economy afloat, said Marcel Tiliant, senior economist for Australia and New Zealand at Capital Economics. The central bank has already cut its money rate to a record low to help businesses and households weather the downturn.