Economic growth near an end as Treasury talks of prolonged coronavirus downturn
- Written by Peter Martin, Visiting Fellow, Crawford School of Public Policy, Australian National University
Australia’s three-decade run of near continuous economic growth is set to end, with treasury warning of a hit to growth of “at least” 0.5% in the first quarter of this year, potentially followed by a “prolonged downturn”.
If it came to pass, treasury’s preliminary assessment would most likely mean economic growth vanished and went backwards for several quarters, producing what is commonly known as a “technical recession[1]” – two quarters or more in which income and spending shrink.
Providing the assessment[2] to a Senate estimates committee on Thursday morning, treasury secretary Steven Kennedy said the COVID-19 coronavirus would take “at least half a percentage point” from economic growth during the current March quarter and more beyond that.
In recent quarters economic growth has been about half a percentage point.
Quarterly GDP growth
References
- ^ technical recession (www.smh.com.au)
- ^ assessment (treasury.gov.au)
- ^ Source: ABS 5206.0 (www.abs.gov.au)
- ^ Support package gains shape as GDP turning point swamped (theconversation.com)
- ^ The first economic modelling of coronavirus scenarios is grim for Australia, the world (theconversation.com)
Authors: Peter Martin, Visiting Fellow, Crawford School of Public Policy, Australian National University