Gross domestic product figures from the Bureau of Statistics show Australia's economy shrank 0.3 percent in the March quarter, in the midst of bushfires and the beginning periods of the coronavirus pandemic.
This makes it sure that, Australia will endure its first downturn in quite a while, as the full effect of coronavirus-related shutdowns happened during the present June quarter.
Financial analysts generally characterize a downturn as two successive quarters of GDP withdrawal, which are presently sure to happen.
The last time Australia recorded two sequential negative quarters for GDP was March and June 1991, named by then treasurer Paul Keating as “the recession we had to have”.
Indeed, even before the full impact of the coronavirus hit, Australia’s economy recorded its slowest yearly development in over 10 years, as indicated by the ABS.
The agency’s central financial specialist, Bruce Hockman, said “This was the slowest through-the-year growth since September 2009, when Australia was in the midst of the global financial crisis, and captures just the beginning of the expected economic effects of COVID-19,”
While conceding that Australia is presently in downturn, Treasurer Josh Frydenberg said it could have been a lot worse.
“Treasury were contemplating a fall in GDP of more than 20 per cent in the June quarter. This was the economists’ version of Armageddon,” he told reporters at Parliament House.
“It was in this quarter — the March quarter — that consumer and business confidence fell to its lowest level on record. That the ASX 200 lost a third of its value and, on the 16th of March, saw its biggest daily fall of 9.7 per cent on record.
“When combined with the ongoing drought, which saw farm GDP fall by 2.4 per cent in the quarter, and the devastating impact of the fires that were raging across many states, one looks back on the March quarter, and there wasn’t much good news.
“Seen in this context, the fact that the Australian economy only contracted by 0.3 per cent shows the Australian economy’s remarkable resilience.
Mr Frydenberg said the Government would give a report on both the economy and improvement programs in July.