Australia is officially going into a recession. Technically, it already is in a recession — GDP data from the Australian Bureau of Statistics shows that Australian economy shrank by 0.3% in the March quarter.
And government officials and economists expect the data for the June quarter to be even worse.
A recession is defined as a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.
According to Treasurer, Josh Frydenberg, both business and consumer confidence was at its lowest during mid-March.
However, the early stages of coronavirus is not the only contributing factor to the economic downturn.
The bushfires have also played a role; figures from the Australian Bureau of Statistics (ABS) show Australia’s economy recorded its slowest growth in over a decade before the coronavirus lockdown was put in place.
Is Australia going into a recession?
ABS figures confirm what a lot of us already knew was coming our way — that being the first recession in 29 years in Australia.
May numbers reported by ABS show that:
- Employment decreased by 227,700, to 12,154,100 people
- Full-time employment decreased by 89,100, to 8,540,000 people
- Part-time employment decreased by 138,600, to 3,614,100 people
- Unemployment increased by 85,700, to 927,600 people
- The unemployment rate increased by 0.7 points to 7.1%
- The underemployment rate decreased by 0.7 points to 13.1%
- The underutilisation rate increased by less than 0.1 points to 20.2%
- Monthly hours worked in all jobs decreased by 12.1 million hours, to 1,604.7 million hours.
Unemployment isn’t the only symptom of a recession. Commercial slowdowns, government spending and weak consumer confidence also play a part in reinforcing the recession in Australia, which has been caused by both the bushfires and the coronavirus pandemic.