Australia’s economy has suffered its sharpest quarterly drop since the Great Depression because of the pandemic, with official data released on Wednesday confirming the country is experiencing its first recession in 28 years.
The latest national accounts showed the economy shrank 7% in June, the biggest contraction since records began in 1959.
Its nearest rival was a 2% fall in June 1974, though economists estimate a sharper fall in the early 1930s when Australian became one of the countries hardest hit by the Great Depression.
Today’s National Accounts confirm the devastating blow to our economy from #COVID19.— Josh Frydenberg (@JoshFrydenberg) September 2, 2020
Our Government’s plan for the recovery is seeing hundreds of thousands of Australians getting back to work & thousands of businesses reopening their doors.
There is hope & there is a road out. pic.twitter.com/IOnjXA4nde
Combined with a smaller 0.3% drop in the March quarter, the definition of a technical recession – two consecutive quarters of contraction – has been fulfilled.
Treasurer of Australia Josh Frydenberg said: “Today’s national accounts confirm the devastating impact on the Australian economy from Covid-19.”
“Our record run of 28 consecutive years of economic growth has now officially come to an end.”
The country’s prime minister Scott Morrison told parliament: “This is a devastating day for Australia.”
Organisation for Economic Cooperation and Development figures show the average contraction among OECD countries in the June quarter was 9.8%, including a 20% slump in the UK, a 14% downturn in France and a 9.1% drop in the US.