Australia Enters First Recession in Nearly Three Deacades
September 3, 2020
One of the longest economic expansions on record has finally come to an end. Australia’s economy has not entered a recession since 1991, even managing to avoid a major stumble during the Great Financial Crisis.
The coronavirus brought the nearly 30-year run to an end last quarter, when the economy shrank 7%, marking the second consecutive quarter of contraction. This is the worst performance since the government began keeping records in 1959.
Economists worry that the nation may have a hard time regaining its footing even after the threat of the virus passes. Relations with China, their largest trading partner, have grown tense, with the implementation of tariffs on both sides threatening to escalate to a trade war. A housing bubble in the country’s major cities has also led to an increase in household debt. The nation fought catastrophic wildfires early this year, and some worry that climate change could make such occurrences more common. Economists who spoke to the New York Times suggest that the recession could last more than a year.