The Australian economy has plunged into a recession for the first time in 30 years, as it suffers the economic fallout of the coronavirus pandemic. Compared to the last three months, the Gross Domestic Product (GDP) fell by nearly 7 percent in the April-June quarter.
This comes after the 0.3 percent fall in the first quarter and is the biggest since 1959 when the records began. If any economy sees two-quarters of negative growth, it is in recession. During the 2008 global financial recession, Australia was the only major economy to avoid a recession, primarily because of the Chinese demands for its natural resources.
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Earlier this year, the Australian economy was hit by a fall in economic growth due to the wild bushfires as well as the earlier stages of the COVID-19 outbreak. Even though the government and the state bank of the country support the economy, the shutdown of the businesses in the country has taken their toll.
Economic experts have described it as the worst expansion in more than 61 years, primarily because of the significant contraction in spending on services and goods. In mid-1990, Australia fell into its last recession.
However, the pandemic has been a major blow to the country’s economy, even though the figure is slightly encouraging than the predicted 8 percent by the State Bank of Australia. Despite the significant drop in economic activity, the country is doing much better than many countries worldwide as many advanced economies have experienced even bigger downturns.
Meanwhile, the US, which is the world’s biggest economy, recorded a 9.5 percent contraction in the April-June quarter while Britain’s economy shrank by nearly 20.4 percent, sending it into a recession as well. Moreover, Japan’s economy shrank by 7.6 percent, and France’s economy fell by a staggering 13.8 percent.
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