Australia's economy is officially in a recession after June quarter data revealed the nation's gross domestic product (GDP) has shrunk by 7 per cent.
Data released by the Australian Bureau of Statistics (ABS) revealed that in the three months from April to June the nation's GDP suffered its biggest drop since records began in 1959.
The previous quarter – which recorded activity across January to March – Australia's GDP fell by 0.3 per cent.
READ MORE: What is a recession? How will it affect ordinary Australians?
A recession is defined as two consecutive quarters in which a nation's GDP shrinks.
Australia has posted several single-quarter losses but today's results confirm that the nation is in a recession for the first time in 29 years.
Michael Smedes, Head of National Accounts at the ABS, said the near double-digit drop in a single quarter was unprecedented.
READ MORE: COVID-19 has gutted global tourism and it's costing Australia $10b every month
"The global pandemic and associated containment policies led to a 7.0 per cent fall in GDP for the June quarter," Mr Smedes said.
"This is, by a wide margin, the largest fall in quarterly GDP since records began in 1959."
Private demand – that is spending on things other than public resources like electricity and water – detracted a whopping 7.9 points from the GDP as households clamped down on budgets during the pandemic.
Spending on services fell by 17.6 per cent, with those in transport, vehicles, hotels, cafes and restaurants hardest hit.
READ MORE: Expect 'severe contraction' in economy, warns Cormann
"The June quarter saw a significant contraction in household spending on services as households altered their behaviour and restrictions were put in place to contain the spread of the coronavirus," Mr Smedes added.
Household saving improved over the June Quarter, driven by the stall in household spending and the increased income some felt through government assistance programs such as JobKeeper and the early access to superannuation scheme.
Total hours worked fell by a record 9.8 per cent and social assistance benefits in cash rose a record 41.6 per cent.
As a result, the government's general net saving rate fell to an eye-watering minus $82.6 billion, reflected largely in the $55.5 billion worth of subsidy payments and reduced tax income as a result of COVID-19.
Defence spending also increased as personnel were deployed to assist with management of the COVID-19 pandemic.
You can get up-to-date information from the Federal Government's Coronavirus Australia app, available on the App Store, Google Play and the Government's WhatsApp channel.
Beyond Blue's Coronavirus Mental Wellbeing Support Service is a 24/7 service free of charge to all Australians. Visit the site here or call 1800512348
For coronavirus breaking news alerts and livestreams straight to your smartphone sign up to the 9News app and set notifications to on at the App Store or Google Play.
from 9News https://ift.tt/2QNzQl2
via IFTTT
0 Comments