Australia First Recession In Almost 30 Years

Australia First
Recession In Almost 30 Years

Australia released its Gross Domestic Product (GDP) data on Wednesday, reporting a shrink
of 7% for the second quarter (April-June) compared to the first quarter
(January-March) shrink of 0.3%. A country’s economy is considered to be in
recession after two consecutive quarters of negative growth. Being the only
major economy to have avoided the recession during the 2008 global financial
crisis, Australia now reported the biggest GDP fall since records began back in
1959.

Being
a major exporter of its natural resources, Australia was able to sustain the
2008 financial crisis. However, 2020 has wreaked havoc onto the country’s
economic growth, with the outrageous bush fire and the coronavirus outbreak.
Despite ongoing economic support from the government and the central bank,
businesses across the country were left with no choice but to shut down
following the severe plunge in household spending on goods and services.

Australia
lost its famous nickname as ‘The Lucky Country’ to the year 2020, when the
country fell into recession for the first time in almost three decades.
Australia was proud to have a steady economic growth for a few decades, with
its strong exports of natural resources such as coal, iron, and natural gas to
its major trading partner, China. Tourism also contributed to the country’s
strong economic growth previously.

However,
the economy was badly damaged this year when it was struck by bushfires that
spread across 12 million hectares, jeopardizing tourism and seasonal revenues
of small businesses. Before able to recover from the catastrophe, the Covid-19
outbreak came along and led Australia into a lockdown as it closed its borders
and imposed strict social distancing rules. As a result, nearly one million
Australians lost their jobs while approaching social and financial support
offices in March. 

Furthermore,
Australia publicly backed a global inquiry looking into the pandemic’s origins,
provoking the Chinese government. As tension escalates, both trading partners
exchanged political jabs, inflicting further damage on Australia’s economy.

Throughout
the year, Australia’s government has already pumped in more than $147 billion
of economic stimulus. Despite the efforts and Australia’s outstanding
containment of the Covid-19 outbreak, the country’s economy is still strongly
pressured.