Australia exits first recession in almost 30 years

SYDNEY: Australia has exited its first recession in almost 30 years, after official figures on Wednesday showed the economy grew 3.3 per cent in July-September compared with the coronavirus-hit previous quarter.

With local transmission of Covid-19 largely under control, official data showed businesses have begun to rebound and consumer spending has surged.

The Australian Bureau of Statistics said household spending largely drove the economic bounce, rising 7.9 per cent compared with the previous quarter.

Treasurer Josh Frydenberg said the figures “can give Australians cause for optimism and hope”, declaring that Australia “has performed better on the health and on the economic fronts than nearly any other country in the world”.

However, central bank governor Philip Lowe warned that positive economic indicators masked lingering difficulties.

“These figures ... cannot hide the reality that the recovery will be uneven and bumpy and that it will be drawn-out.

“Some parts of the economy are doing quite well, but others are in considerable difficulty,” he told lawmakers.

Australia’s central bank has predicted the economy will not return to pre-pandemic levels until the end of 2021.

The economy has yet to fully recover from the coronavirus-fuelled recession, recording a 3.8-per cent slump for the year to September.

The return to economic growth followed a record seven-per cent decline in the June quarter and a 0.3-per cent dip in the first quarter of 2020.

A recession is generally defined as two successive quarters of economic contraction.

The return to growth comes despite Victoria state – which accounts for about 25 per cent of Australia’s economic output – spending much of the September quarter in one of the world’s strictest lockdowns, curtailing economic activity.