A series of unfortunate events pushed the economy over the edge
Like in Europe and Asia, Australia joined the ranks of nations which are in recession due to the pandemic's economic effects.
The data provided by the Treasury and the Australian Bureau of Statistics weren’t positive at all. The numbers showed a 0.3% economic contraction for the first quarter of 2020, caused by the pandemic and bushfires happening at the beginning of the year. The decrease is the first one in nine years.
Bureau of Statistics chief economist Bruce Hockman, stated, "This was the slowest through-the-year growth since September 2009, when Australia was in the midst of the global financial crisis and captures just the beginning of the expected economic effects of Covid-19."
The Reserve Bank of Australia took measures to cushion the economic blow, and in March, it cut the interest rate to a record low of 0.25%. Also, it started an unlimited bond-buying program. According to the Bank's governor, Australia is going through the toughest macro-economic conditions since the Great Depression.
Moreover, the unemployment rate reached 6.2% in April, after more than 600,000 were left jobless by the pandemic. By June, the rate is to increase to 10% and stay up high until 2021.
A small recovery could happen in the second half of the year.
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Sources: bbc.com, the guardian.com, investing.com
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