Australia’s economy has been in recession for the first time in nearly 30 years due to the economic blow from the coronavirus.
Gross domestic product (GDP) declined 7% in the April-June quarter compared to the last three months.
This is the biggest drop since the record began in 1959, after a 0.3% drop in the first quarter.
If the economy shows negative growth for the second consecutive quarter, it is considered a recession.
Australia was the only major economy to escape the recession during the 2008 global financial crisis. It was mainly because of China’s demand for natural resources.
Earlier this year, the economy was hit by a decline in economic growth due to the extreme wildfire season and the early stages of the coronavirus outbreak.
In recent years, corporate shutdowns across the country have been hit hard despite measures by the government and central banks to support the economy.
This is the worst economic growth in 61 years due to severe cuts in household spending on goods and services.
2020 will be a year to remember and a year everyone is already trying to forget! Australia technically fell into a recession for the first time in nearly 30 years after losing the famous nickname of’The Lucky Country’.
According to the Australian Bureau of Statistics GDP figures, the economy has declined 7% over the past three months due to the coronavirus pandemic.
For young people who have recently joined the job, this is something they have never experienced before. Australia has experienced steady economic growth for decades with strong coal, iron ore and natural gas exports to China. Tourism was also a great driver of growth.
But this year, the country was hit hard. twice. Tourism was hit hard when wildfires devastated more than 12 million hectares and thousands of small businesses lost essential seasonal revenues for months. Then the coronavirus became a global pandemic. Australia has closed its borders and imposed strict social distancing rules.
As a result, nearly a million people lost their jobs. I remember seeing in March that people lining up outside the social and financial aid office were bewildered with people in this situation, perhaps for the first time in their lives.
In addition, relations with China, Australia’s largest trading partner, are increasingly tense. Australia strongly and publicly supported a global investigation into the origins of the coronavirus that infuriated the Chinese government in April. Since then, Canberra and Beijing have exchanged political jabs, and the Australian economy has felt a crisis.
The Scott Morrison administration has already pumped more than 200 billion dollars (110 billion pounds, 147 billion dollars) into economic stimulus. Australia controls the virus and outperforms many other countries around the world in the consequent economic downturn, but this affluent country will face even more harsh reality in the years to come.
Australia last fell into recession in the mid-1990s and reached the end of 1991.
However, while the coronavirus pandemic has hit Australia’s economy hard, that figure is slightly better than the 8% decline previously predicted by the Reserve Bank of Australia.
Despite a severe decline in economic activity, Australia is doing better than most other developed countries that have experienced a bigger recession.
The world’s largest US economy declined 9.5% between April and June, and the UK also fell 20.4%.
The French economy fell 13.8% and Japan 7.6%.
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