Australia plunges into recession as Covid-19 sparks record slump
Australia has plunged into its first recession in nearly three decades after the coronavirus crisis sparked the country’s worst economic slump on record.
Australia’s gross domestic product (GDP) shrank seven per cent in the three months to the end of June — the largest fall since records began. It follows a 0.3 per cent fall in the first quarter.
The bleak figures means Australia joins the UK, US, Japan and Germany in recession, which is defined as two consecutive quarters of decline.
It is the first time the country has been in recession since 1991.
“This crisis is like no other,” treasurer Josh Frydenberg told reporters. “Today’s national accounts confirm the devastating impact on the Australian economy from Covid-19.
“Our record run of 28 consecutive years of economic growth has now officially come to an end.”
The decline, which was deeper than the 5.9 per cent forecast, comes as Australia continues to battle the outbreak of coronavirus.
Victoria, the country’s second most populous state, remains in lockdown, while international borders are also closed.
Frydenberg said the Victoria lockdown would weigh “heavily” on September’s GDP figures.
The government has pumped more than A$300bn (£165bn) into the economy in a bid to accelerate Australia’s recovery.
But more than 1m people have lost their jobs since lockdown began in March, and analysts said will take until early 2022 for the economy to return to pre-pandemic levels.