Aus­tralia faces largest post-war bud­get deficit and first re­ces­sion since 1991

The Daily Telegraph - Business - - Business -

◆ Aus­tralia will post its big­gest bud­get deficit since the Sec­ond World War this year as the coron­avirus cri­sis sparks its first re­ces­sion in three decades, writes Chris John­ston.

De­spite man­ag­ing the pan­demic bet­ter than most de­vel­oped na­tions, the out­break has left its trade-ex­posed A$2 tril­lion (£1.1 tril­lion) econ­omy grap­pling with un­em­ploy­ment that is ex­pected to peak at 9.25pc this year.

Trea­surer Josh Fry­den­berg said yes­ter­day the bud­get swung to a deficit of A$85.8bn in the year to June. The short­fall is pro­jected to fur­ther wi­den to A$184bn in 2020-21 – the largest since the war as a per­cent­age of GDP, mainly ow­ing to a gov­ern­ment stim­u­lus of A$289bn. Real GDP was likely to have shrunk by 7pc in the June quar­ter as lock­down sent the econ­omy spi­ralling into re­ces­sion for the first time since 1991.

Data sug­gests ac­tiv­ity has picked up in the cur­rent quar­ter as re­stric­tions were broadly eased in late May. Aus­tralia has so far re­ported more than 13,300 coron­avirus cases, more than half in Vic­to­ria where Mel­bourne has re­turned to lock­down, and 133 deaths.

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