Australia confirms end of longest economic boom as forest fires and pandemic destroy growth
The Australian economy has entered a recession, the country’s treasurer said on Wednesday after data showed that gross domestic product fell in the last quarter as whole business sectors were closed to fight the coronavirus.
The economy of 2,000 billion Australian dollars ($ 1.39 trillion) contracted 0.3% in the three months ended March, said the Australian Bureau of Statistics, the first decline in nine years. .
This brought annual growth to 1.4%, the slowest since the global financial crisis of 2009, as the economy was hit by the worst season of bushfires in memory, prolonged drought and a pandemic that closed businesses and left many unemployed.
When asked if the country was already in a recession, technically defined as two consecutive quarters of contraction in GDP, treasurer Josh Frydenberg replied in the affirmative.
“Based on what we know from the Treasury, we are going to see a contraction in the June quarter, which will be much larger than what we saw in the March quarter,” he told journalists in Canberra.
Investors show little reaction to the Australian GDP report as it is outdated news. It was put on the market a few weeks ago. Investors are now betting on a rapid recovery and are reacting more to RBA Governor Philip’s forward-looking statement.
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