Treasurer says Australia’s economy is in a recession

Treasurer Josh Frydenberg says Australia is in the midst of a recession, as the country recorded its first quarter of negative growth in nine years.

The latest Gross Domestic Product (GDP) numbers show the economy has contracted by 0.3 per cent in the March quarter.

The result means the economy is on track to post an even bigger fall when the next set of numbers are released in September. That data will take into account business shutdowns and other measures to slow the spread of COVID-19.

Two negative quarters mean Australia will technically be in a recession, but Josh Frydenberg today said the country is already there.

Q: Is Australia in recession today?

A: Well, the answer to that is yes. And that is on the basis of the advice that I have from the Treasury Department about where the June quarter is expected to be.

Despite the gloomy outlook, Australia’s economy has performed better than many other economies.

“When combined with the ongoing drought … and the devastating impact of the fires that were raging across many states, one looks back on the March quarter and there wasn’t much good news,” Mr Frydenberg said.

“It was in this quarter, the March quarter, that consumer and business confidence fell to its lowest level on record, that the ASX 200 lost a third of its value, and on the 16th of March saw its biggest daily fall, 9.7%, on record.

“The fact that the Australian economy only contracted by 0.3% shows the Australian economy’s remarkable resilience.”

Australia’s performance in the March quarter compares favorably to many parts of the world. Over the same period, GDP in China shrunk by 9.8 per cent, GDP in France contracted by 5.3 per cent, and in the US, GDP is down by 1.3 per cent.