Australia's economy has reached recession levels after data showed GDP fell in the first quarter due to the closure of many businesses in the face of the new Covid-19 outbreak, the Statistics Office data showed today.
The Australian economy contracted by 0.3 percent in the first quarter, marking the first decline in the Australian economy since 2011.
The country's annual growth reached 1.4%, the lowest reading since the global financial crisis in 2009, due to the state's vulnerability to seasonal forest fires and the government shutdown by the state in the face of the pandemic, which led to the closure of many businesses and the loss of many people's jobs.
More to mention, household consumption recorded the biggest decline in growth in the last quarter due to a marked drop in spending on clothing, cars, transportation, hotels and restaurants.
This will be the first economic recession in Australia since the early 1990s and ends one of the longest growth lines in the world, despite the support of net exports and government spending for the economy during the previous quarter.
With the high number of infections, reaching 7,000 cases, the Australian government to carried out closure measures to face the pandemic.
These measures led to the loss of 600,000 jobs and the unemployment rate rose to 6.2% in April, not to mention the central bank's forecast that unemployment will reach 10% by June and remain high for most of 2021.
Earlier, the Reserve Bank of Australia (RBA) lowered its cash rate to a record low of 0.25% and launched an unlimited bond purchase program, in addition to a 60 billion Australian dollars pay support plan.
RBA Governor Philip Lowe said this week that these stimulus measures were working best, and the outlook for the economy looked less gloomy as health outcomes improved and business reopened earlier than expected.
As of 09:34 GMT, the
Aussie dollar extended its advance versus its U.S. counterpart at 0.6883, the
highest since January 3, but it snapped its earlier gains to trade at 0.6882.