Latest ABS numbers reveal the Australian economy decreased by 0.3% for the first three months of 2020, alongside the slowest through-the-year growth since the 2009 GFC.
“This was the slowest through-the-year growth since September 2009 when Australia was in the midst of the Global Financial Crisis and captures just the beginning of the expected economic effects of COVID-19,” claims ABS Chief Economist, Bruce Hockman.
Whilst the economy leapt by 0.5% over the December quarter, new national accounts figures from the ABS reveal annual GPD growth has slowed from 2.2.% to 1.4% through the year.
The news comes as global economies continue to feel the brunt of the coronavirus pandemic, with retailers now reopening amidst stringent health and safety conditions.
Local economists expect the coming quarter’s reading to be even worse, with social distancing measures amplifying during the period.
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Market commentators predicts a rebound for September, following a drop of around 8% in the June quarter.
It has prompt commentator speculation that Australian economy will notch its first recession in 29 years, with two consecutive quarters of GDP contraction.
For the March quarter, net trade contributed 0.5 percentage points to GDP, with imports of goods falling 3.9% – consumption and capital goods drops reflected “weak domestic demand.”
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The household saving to income ratio climbed to 5.5%, signalling a drop in consumption and lift in gross disposable income.
The figure is driven by a jump in social assistance benefits, alongside and increase in recipients and government aid around the coronavirus pandemic.
Household final consumption expenditure dropped 1.1% – the first decline since December 2008, detracting 0.6 percentage points from GDP.
