Australia’s economy has suffered its sharpest quarterly drop since the 1930s global recession because of the Covid-19 pandemic, with official data released on Wednesday confirming the country is experiencing its first recession in 28 years.
The latest national accounts showed the economy shrank 7 per cent in June, the biggest contraction since records began in 1959.
Its nearest rival was a 2 per cent fall in June 1974, though economists estimate a sharper fall in the early 1930s when Australian became one of the countries hardest hit by the Great Depression.
Combined with a smaller 0.3 per cent drop in the March quarter, the definition of a technical recession – two consecutive quarters of contraction – has been fulfilled.
Treasurer of Australia Josh Frydenberg said: "Today's national accounts confirm the devastating impact on the Australian economy from Covid-19."
“Our record run of 28 consecutive years of economic growth has now officially come to an end.”
‘Devastating day’
The country's prime minister Scott Morrison told parliament: "This is a devastating day for Australia."
Organisation for Economic Cooperation and Development figures show the average contraction among OECD countries in the June quarter was 9.8 per cent, including a 20 per cent slump in the UK, a 14 per cent downturn in France and a 9.1 per cent drop in the US. – AP
