Australia has entered its first recession in almost three decades
Yesterday was a day full of essential data readings. The reports painted a gloomy picture of the current state of the economies hit by the pandemic.
According to the Australian Bureau of Statistics report, the country's economy contracted by a record of 7% in the past quarter. It is the first time in almost thirty years when Australia reports two consecutive GDP contractions, after in Q1 in contracted by 0.3%.
The significant contraction was caused due to firms closing, driving thousands of people into unemployment. Also, international border closures crushed the tourism sector in #Q2, while the few firms that were up-and-running were afloat only by using governmental aid packages. All eyes are currently over Victoria state, which is responsible for roughly 25% of national output. The increase in the number of COVID-19 cases forced the state to adopt severe #lockdown measures.
Australia’s GDP contraction would have been more severe if it wasn’t for the Reserve Bank’s deployment of a $147 billion fiscal stimulus and its decision to cut the interest rates to 0.25%. Treasurer Josh Frydenberg estimates that the ongoing restrictions will make the GDP drop $12 billion in September, and 400,000 people will end up without a job.
From the specialists’ point of view, it will take several years for the job market to be at the pre-pandemic level.
Read more about pandemic-induced recessions here!
Sources: bbc.com, 9news.com.au, marketwatch.com