Treasurer Josh Frydenberg confirmed today the nation was officially in recession after figures show the economy shrank by 0.3%.
We might have dodged more bullets than other COVID-19 riddled nations, but we’re no Neo from the Matrix when it comes to the economic hit from COVID-19.
Despite faring better than all but a handful of countries, Australia will still weather some of the worst economic conditions faced in the past three decades.
With the release of National Accounts today, Treasurer Josh Frydenberg admitted the 0.3 per cent drop in GDP during the 12 months up until March meant Australia had officially entered the ‘R’ word.
Recession is upon us.
It could be much much worse
Despite Australia facing the slowest through-the-year growth since September 2009, Mr Frydenberg said today’s data actually showed the “remarkable resilience” of our economy.
“The fact that the Australian economy only contracted by 0.3 per cent shows the Australian economy’s remarkable resilience,” he said.
“Indeed, Australia’s performance in the March quarter compares very well to that seen in other nations, with negative growth of 9.8 per cent in China, 5.3 per cent in France, 2.2 per cent in Germany, 2 per cent in the United Kingdom, and 1.3 per cent in the United States.”
Mr Frydenberg said earlier in the pandemic, “we were on the edge of the cliff”.
“What we were facing was an economist’s version of Armageddon,” he said.
“We have avoided the economic fate, and the health fate, of other nations because of the measures, that we have taken as a nation – the social-distancing requirements, the work that we’ve done on isolation and quarantine, the travel bans – that has seen the number of cases reduce dramatically.”
Things will keep going downhill
The contraction seen in March will be nothing to what we’re going to see when June comes around.
“Based on what we know from Treasury, we’re going to see a contraction in the June quarter which is going to be a lot more substantial than what we have seen in the March quarter,” Mr Frydenberg said.
“In the June quarter, the economic impact will be severe.
“We’ve just notched up a 0.3 per cent decline in the economy in the March quarter – we’re looking at 8.5 per cent in the June quarter.”
Watch: Australia is almost certain to enter its first recession in nearly three decades.
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