(Image: Unsplash)

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.
(Image: ABS)
(Image: ABS)

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.

Read: Will coronavirus cause a recession in Australia? | The most recent forecasts

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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