Current AffairsWorld

Australia in recession for 1st time in almost 3 decades

Canberra: Australian Gross Domestic Product has fallen 7.0 percent in the June quarter, the largest quarterly fall on record, according to figures released by the Australian Bureau of Statistics (ABS) on Wednesday.

The figure follows a fall of 0.3 percent in the March quarter this year.

It means that Australia has fallen into recession for the first time in nearly 30 years, according to a report by the Australian Broadcasting Corporation.

Michael Smedes, head of National Accounts at the ABS, attributed the quarterly fall to “global pandemic and associated containment policies.”

“This is, by a wide margin, the largest fall in quarterly GDP since records began in 1959,” he said.

Report from the ABS also shows that due to increased number of recipients and additional support payments, social assistance benefits in cash rose to a record 41.6 percent.

Spending on services dropped 17.6 percent after decrease in transport services, operation of vehicles and hotels, cafes and restaurants.
“The June quarter saw a significant contraction in household spending on services as households altered their behavior and restrictions were put in place to contain the spread of the coronavirus,” said Smedes.

Australian Treasurer Josh Frydenberg said on Wednesday that the June National Accounts were full of “heartbreaking stories.”

He warned that the road ahead will be long, hard and bumpy as Victoria’s COVID-19 situation is likely to affect the next economic quarter.

“It’s important to recognize that this fall in the June quarter does not include the economic impact from the stage four restrictions imposed by the Victorian Government in early August,” he said.

“This is something that will weigh heavily on the September quarter numbers.”

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