New Delhi (NVI): Australia’s economy has plunged into its first recession in nearly 30 years, as it suffers the economic fallout from the coronavirus. Gross domestic product (GDP) shrank 7 per cent in the April-to-June quarter compared to the previous three months.
This is the biggest fall since records began back in 1959 and comes after a fall of 0.3 per cent in the first quarter, according to media reports.
It is the largest quarterly drop on record and is higher than what was anticipated by the Reserve Bank of Australia.
An economy is considered to be in recession if it sees two consecutive quarters of negative growth.
Australia was the only major economy to avoid a recession during the 2008 global financial crisis – mainly due to demand from China for its natural resources.
At the start of this year, the economy was hit by falling economic growth due to an extreme bush fire season and the early stages of the coronavirus outbreak.
More recently the shutdowns of businesses across the country have taken their toll, despite measures by the government and central bank to support the economy.
This is the worst economic growth in 61 years due to a severe contraction in household spending on goods and services.
GDP figures from the Australian Bureau of Statistics have shown that the economy shrank by 7 per cent in the last three months as a result of the coronavirus pandemic.
Scott Morrison’s government has already pumped more than A$200bn (£110bn; US$147bn) in economic stimulus.
The country has fared better than many other nations around the world in controlling the virus and in subsequent economic slump but this country of abundance will have to face a much harsher reality for a few years to come.