The country’s GDP in the second quarter decreased by 7% compared to the previous quarter.
Australian Bureau of Statistics (ABS) said Wednesday. This is the second consecutive quarter of recession for Australia – GDP contracted 0.3% in the first quarter – and the largest drop since the record began in 1959.
It was also worse than the projected 5.9% drop that was expected according to the Refinitiv analyst survey.
The authorities attributed the fall to the pandemic and the halting measures that the country took to contain it, although Australia had already argued about the problems before. The country was devastated earlier this year
worst forest fires he has seen in decadesmaking consumer spending and tourism more difficult, according to
Australian Tourism Export Council…
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.”
There is probably more pain ahead. The Reserve Bank of Australia has
said the rate of recovery outside the last quarter is
uncertainty depending on how long the outbreak lasts. And Victoria – Australia’s second most populous city of Melbourne – is now
withstanding the most severe constraints felt the Australians during the pandemic, after the brutal second wave of the virus.
“This will have a big impact on the September numbers,” added Friedenberg.
The recession is a landmark turn for the Australian economy, which has experienced 29 years of economic growth. IN
the streak was partially caused due to China’s insatiable appetite for commodities such as iron ore and coal, as the country has become the world’s second largest economy. (Notably, these relations have worsened recently: tensions between China and Australia
spilled on beef, a little bit and wine after the last country called for an investigation into the causes of the pandemic.)
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.
The pandemic has harmed many world powers. All leading advanced economies – Canada, France, Germany, Italy, Japan, UK and USA –
saw their economy plummet in the first half of 2020.
