Record Q2 GDP Decline as Australia Enters First Recession in 30 Years - ABS
(02 September 2020 – Australia) The Australian economy is officially in a technical recession with two consecutive quarters of negative economic growth reported by the Australian Bureau of Statistics (ABS).
The Q1 2020 decline of 0.3 percent was followed by a record seven percent decline in gross domestic product (GDP) for Q2 2020. Australia remarkably weathered the Global Financial Crisis in 2008 with a single quarter of negative economic growth.
The quarter-on-quarter decline for the three months to June is the largest quarterly fall on record as COVID-19 restrictions make their mark on consumption, production and confidence, particularly in the hardest hit state of Victoria slowly recovering from a severe second wave outbreak of new cases and deaths.
Relative to other global economies Australia is faring relatively well however, with enormous quarterly GDP hits recorded by other countries such as Peru and Sweden.
The Australian economy contracted by 0.3 of a percentage point in the March quarter, before much of the shutdown measures to combat the spread of COVID-19 were implemented. Australia is in its first recession in 29 years, when it recorded two consecutive quarters of negative GDP growth for Q1 1991 and Q2 1991.
The Parliamentary Budget Office conceded that any future modelling of an economic recovery remains highly uncertain because it includes assumptions of no further fiscal measures than the ones already in place.
“The lockdown in Victoria has been a massive drag on the national economic recovery, with up to A$12 billion expected to be wiped from the GDP” quoted Federal Treasurer Josh Frydenberg.
“The global pandemic and associated containment policies led to a 7.0 per cent fall in GDP for the June quarter. This is, by a wide margin, the largest fall in quarterly GDP since records began in 1959” said ABS Head of National Accounts Michael Smedes
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