Australia enters first recession in almost three decades
Australia has entered its first recession since 1991 after the economy shrank 7 percent in the second quarter, official figures showed Wednesday, as the country reels from the coronavirus pandemic, AFP reports.
The Australian Bureau of Statistics said it was the fastest quarterly contraction on record and ends a three-decade run of economic growth that was undented even by the global financial crisis.
The bureau's head of national accounts, Michael Smedes, said the pandemic and containment efforts were to blame for the "unprecedented" drop that exceeded previous records "by a wide margin".
A recession is defined as two consecutive quarters of contraction. Australia's economy shrank 0.3 percent in the previous three months.
The widely expected result is in line with earlier government predictions that gross domestic product would contract seven percent in April-June.
The country was already reeling from a prolonged drought and massive bushfires that had rattled the economy before the disease struck.
Australia has now confirmed almost 26,000 cases of Covid-19 and 663 deaths from the virus, the vast majority in Melbourne and its surrounds since July.
The government in July predicted a return to growth in the third quarter as virus restrictions eased. But the closure of non-essential businesses in Melbourne, the country's second-biggest city, could stifle the recovery.
Authorities expect national unemployment to peak at 9.3 percent in December and the budget deficit to blow out to almost a tenth of GDP by mid-2021.