Economy looking up Down Under

AUSTRALIA extended its streak of almost 26 years without recession at the start of this year in one of the world’s longest periods of economic expansion for a rich country.

The economy expanded by 0.3% in the first three months of the year, following 1.1% quarterly growth at the end of last year, according to the Australian Bureau of Statistics. This means it has enjoyed 103 quarters without a technical recession — defined as two straight quarters of economic decline.

Australia last fell into recession in 1991. It expanded during the depths of the Great Recession as Chinese stimulus boosted demand for its commodities.

Only Japan — which had more than 130 quarters without a recession between 1960 and 1993 — had enjoyed a longer spell of recession-free growth, said the Organisation for Economic Cooperation and Development.

The bureau said growth in the first quarter of this year was driven by the services sector. Manufacturing contracted for 10 of the past 11 quarters, while exports also fell at the start of the year.

Tom Kennedy, an economist at JP Morgan, described the firstquarter expansion as “fairly weak” as households continued to drive down their savings to fund purchases.

Economists expect growth to strengthen later this year as the drag on growth from declining resource sector investment fades. —©