BREAKING: Australia Officially In Recession -7% GDP
Australia is officially in its first recession in three decades, with GDP taking an unprecedented seven per cent hit in the June quarter.
The coronavirus took a sledgehammer to the economy in the second quarter of 2020, with a 12.1 per cent fall in household final consumption expenditure, 17.6 per cent drop in spending on services, and a 13.8 percentage point increase in the household savings to income ratio – from six per cent in the March quarter to 19.8 per cent in the June quarter, with fears of job losses driving consumers to save more rather than spend up.
According to Michael Smedes, Head of National Accounts at the ABS, COVID-19 and the community and government responses to it led to movements of unprecedented size in both GDP and other economic aggregates.
“The global pandemic and associated containment policies led to a 7.0 per cent fall in GDP for the June quarter. This is, by a wide margin, the largest fall in quarterly GDP since records began in 1959.
“The June quarter saw a significant contraction in household spending on services as households altered their behaviour and restrictions were put in place to contain the spread of the coronavirus,” he said.
Key chart from ABS today, 7 per cent in GDP in June quarter. pic.twitter.com/yQccr1QNC9
— Conrad Liveris (@ConradLiveris) September 2, 2020
The seven per cent drop in GDP in the June quarter follows an 0.3 per cent drop in the March quarter, marking two consecutive quarters of negative growth and tipping Australia into a recession for the first time since “the recession we had to have” in the early 1990s.