Australia is officially in its first recession for almost three decades, with the June quarter GDP numbers showing the economy went backwards by 7 per cent; the worst fall on record and slightly worse than most economists had predicted.
Key points:
GDP plunged 7 per cent in the June quarter, more than three times the previous biggest fall of 2 per cent in 1974
Household expenditure fell 12.1 per cent
With fewer places to spend money the household saving rate jumped from 6 to 19.8 per cent
The Bureau of Statistics numbers out today also confirmed the March quarter’s 0.3 per cent decline, meaning Australia’s economy has gone backwards for two consecutive quarters, meeting a common definition of recession.
It is the first time this has happened since 1991, although the scale of the downturn is vastly greater than “the recession we had to have”, where the economy shrank 1.3 and 0.1 per cent.
The 7 per cent quarterly GDP slump was also more than three times worse than the previous biggest fall of 2 per cent in June 1974.
