Pandemic set to shrink Australian economy in first quarter, worse yet to come by Swatisays
SYDNEY - Australia’s economy is expected to have shrunk in the first quarter as the global coronavirus pandemic is set to tip the country into its first recession in three decades.
A Reuters poll of 15 economists forecast the A$2 trillion economy to contract by 0.3% in the three months to March - the first quarterly decline in nine years.If the economy contracts in both the March and June quarters it would be Australia’s first technical recession since the early 1990s. The country’s central bank stepped in by cutting the cash rate to a record low 0.25% and launching an unlimited bond buying programme. It is widely expected to sit tight at its monthly policy meeting on Tuesday.
“That means Australia might escape ‘technical’ recession. Again,” said Deutsche Bank economist Phil Odonaghoe forecasting a 0.1% growth in March quarter.Even before the coronavirus-related mobility restrictions kicked in, Australia’s economy was struggling from a devastating bushfire season, a slowdown in tourism and weak domestic demand.
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