Australia in recession for the first time in nearly 30 years

AUSTRALIA has tumbled into recession for the first time in nearly 30 years as it grapples with the economic effects of Covid-19.

Dubbed “the lucky country” for its wealth of natural resources and distance from problems elsewhere in the world, it has joined the US, Britain and Germany in recording two quarters of economic decline.

Gross domestic product (GDP) shrank 7% in the April-to-June quarter compared with the previous three months. This is the biggest fall since records began back in 1959 and comes after a fall of 0.3% in the first quarter.

Australia was the only major economy to avoid a recession during the 2008 global financial crisis.

The country joins the United States, Japan, UK and Germany in recession, defined as two straight quarters of decline.

The figures come as Australia’s second most-populous state of Victoria remains in lockdown to curb the spread of the coronavirus while international borders are shut too.

More than a million people have lost their jobs since March when Australia shut down entire sectors of the economy, hitting private sector demand and investments.

In August the UK economy officially fell into recession for the first time since the financial crisis ten years ago.

The economy plunged by 20% between April and June as the pandemic shuttered businesses and kept people locked up at home. GDP had fallen by 2.2% between January and March.