Australian economy tumbles at fastest pace since Great Depression due to COVID-19
Economists estimate a sharper fall of 9.5 percent in 1930, when Australian became one of the world's hardest-hit countries by the Great Depression
- Sep 2, 2020,
- Updated Sep 2, 2020 12:46 PM IST
Australia's economy has suffered its sharpest quarterly drop since the Great Depression because of the pandemic, with data released on Wednesday confirming the country is in its first recession in 28 years. The latest national accounts showed the economy shrank 7 percent in the June, the biggest contraction since records began in 1959. Its nearest rival was a 2 percent fall in June 1974. Economists estimate a sharper fall of 9.5 percent in 1930, when Australian became one of the world's hardest-hit countries by the Great Depression.
Combined with a smaller 0.3 percent drop in the March quarter, the definition of a technical recession -- two consecutive quarters of contraction - has been fulfilled. "Today's national accounts confirm the devastating impact on the Australian economy from COVID-19," Treasurer Josh Frydenberg said.
"Our record run of 28 consecutive years of economic growth has now officially come to an end," he added. Prime Minister Scott Morrison told Parliament: "This is a devastating day for Australia." Organization for Economic Cooperation and Development figures show the average contraction among OECD countries in the June quarter was 9.8 percent, including a 20 percent slump in the Britain, a 14 percent downturn in France and a 9.1 percent drop in the United States.
Also read: COVID-19 effect: Germany to lower its 2021 economic growth forecast
Australia's economy has suffered its sharpest quarterly drop since the Great Depression because of the pandemic, with data released on Wednesday confirming the country is in its first recession in 28 years. The latest national accounts showed the economy shrank 7 percent in the June, the biggest contraction since records began in 1959. Its nearest rival was a 2 percent fall in June 1974. Economists estimate a sharper fall of 9.5 percent in 1930, when Australian became one of the world's hardest-hit countries by the Great Depression.
Combined with a smaller 0.3 percent drop in the March quarter, the definition of a technical recession -- two consecutive quarters of contraction - has been fulfilled. "Today's national accounts confirm the devastating impact on the Australian economy from COVID-19," Treasurer Josh Frydenberg said.
"Our record run of 28 consecutive years of economic growth has now officially come to an end," he added. Prime Minister Scott Morrison told Parliament: "This is a devastating day for Australia." Organization for Economic Cooperation and Development figures show the average contraction among OECD countries in the June quarter was 9.8 percent, including a 20 percent slump in the Britain, a 14 percent downturn in France and a 9.1 percent drop in the United States.
Also read: COVID-19 effect: Germany to lower its 2021 economic growth forecast