Australian economy likely to contract due to pandemic, dim outlook looms

Australia’s economy is likely to have contracted in the first quarter as the novel coronavirus crisis drags the land down under to its first recession in three decades.

Fifteen economic analysts foresee that the A$ 2 trillion economy will decline by 0.3% in the three months ended March. This will come as the country’s first quarterly decline since 2009. More so, annual economic growth is predicted to decline by 1.4%, far smaller than the 2.2% prediction in 2019.

Australian economy slipped deeper as the number of local coronavirus cases breached 7,000 from less than 100 recorded back in March.  

It would be the country’s first technical recession if the economy contracts in the March and June quarters. To mitigate this pressing concern, the Reserve Bank of Australia had slashed its interest rate to a record low of 0.25% and launched an unlimited bond purchasing scheme.