News Australia is officially out of recession after 3.3 per cent rise in GDP in the September quarter
Australia is officially out of recession after 3.3 per cent rise in GDP in the September quarter
Staff reporterDecember 7, 2020
Australia is officially out of a recession.
The Australian Bureau of Statistics (ABS) advised that the nation's Gross Domestic Product – or GDP – rose 3.3 per cent in the September quarter.
CommSec's Craig James called it a "Christmas miracle."
It was the strongest quarterly growth since the March quarter 1976.
However throughout 2020 Australia's GDP has fallen 3.8 per cent.
A technical recession is defined as two consecutive quarters in negative growth.
The three months to June saw the nation's GDP shrink by seven per cent, the biggest drop since records began in 1959.
The previous quarter to March saw Australia's GDP fall by 0.3 per cent.
The market had been predicting that the economy would grow 2.5 per cent in the September quarter. Westpac had forecast three per cent growth.
"The key dynamic of the covid recession and the re-opening of the economy relates to the restrictions on the movement of people and on travel, with the closure of the borders," Westpac economist Andrew Hanlan said.
"Consumer spending plunged by 12.5% in Q2 reflecting the reduced opportunities for people to spend.
"As restrictions were eased, consumers returned to the shops in greater numbers and consumer spending rebounded by 7.9% in Q3 (providing the upside surprise to our forecast).
"Another key feature of this recession has been the massive income transfer from the government to households and businesses – on an unprecedented scale."