Australia's Q2 GDP Growth Rate Drops 7% Due to COVID Impact... Record Largest Decline

Entering 'Economic Recession' with Contraction in Q1~Q2... "28 Years of Continuous Growth Officially Ends"

Due to the impact of the novel coronavirus infection (COVID-19), a shopping center in Sydney, Australia, is completely empty.
[Image source=AP News Agency]

[Asia Economy Reporter Jeong Hyunjin] Due to the impact of the novel coronavirus infection (COVID-19), Australia's second-quarter gross domestic product (GDP) recorded the largest decline ever, CNBC reported on the 2nd.

According to the report, the Australian Bureau of Statistics announced that Australia's second-quarter GDP decreased by 7% year-on-year (6.3% annualized). This is the largest quarterly decline since statistics began in 1959, falling short of the general forecast (-5.9%).

Considering that the first-quarter GDP decreased by 0.3%, Australia recorded negative growth rates for two consecutive quarters, entering a recession. Technically, two consecutive quarters of economic contraction define a recession. Bloomberg News reported that Australia has fallen into a recession for the first time since 1991.

Josh Frydenberg, Australia's Treasurer, said, "The record of 28 consecutive years of economic growth has finally officially ended," adding, "Today's unprecedented crisis shows that COVID-19 has had a tremendous destructive impact on the Australian economy." He also predicted that the movement restrictions in Victoria would place a heavy burden on the third-quarter GDP.

Since March, private consumption and investment in Australia have been severely hit by the COVID-19 impact. The Australian government has spent more than 300 billion Australian dollars (approximately 262 trillion won) to stimulate the economy, but the outlook for economic recovery remains bleak.

Marcel Thieliant, Chief Economist for Australia at Capital Economics, evaluated, "The GDP decline last quarter was not as large as the Reserve Bank of Australia's (RBA) forecast, but the pressure from the market to announce additional stimulus measures will continue."

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