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Australian economy not in recession

It is a stunning outcome.  The Australian economy grew in the March quarter.  Strong growth in exports have offset the weak performance in private investment.  In the absence of two consecutive quarters of negative growth we are technically not in recession – nor have we been in recession for nearly 20 years. 

There has been a lot of whining in the press about the decline in private investment but if anything we were experiencing an investment boom which took over from the property market boom. The current declines represent a tapering off of that boom.

10 comments to Australian economy not in recession

  • derrida derider

    It is indeed a stunner. But Harry, you’ve passed over the fact that it has left your side of politics’ line = “the stimulus didn’t work and will just saddle us with debt” – looking sicker than the US mortgage market. Just look at that consumption figure. And as you point out, the decline in investment is from an extremely high base (and is anyway smaller than virtually all other developed economies have faced).

    Mind you, I’m not really annoyed by the coalition’s line here because I figure they’re just saying what any opposition would in the circumstances. It would have been a worry, though, if Julie Bishop was still Shadow Treasurer – she’d probably have believed what she said.

    The coalition’s opposition to an ETS is far more troubling.

  • hc

    Generally I agree this outcome does not help the Coalition. (Of course I would prefer Australia to win this race than the Coalition).

    The question in today’s outcome is whether we have overreacted. And I don’t know how to answer that question. Nor am I sure that in 20 years time that econometricians smarter than me will be able to tell us. How do you test this?

  • Benson

    greeen shoots green shoots – not to worry – china will save the day – of course they will all start to consume the western world out of its troubles, so exports will just get stronger for australia, our incredibly well thought out stimulus policy will carry us through to the end of the year when oh so conveniently the mainstream financial communities’ predicitons of a return to growth will become reality (as they always do).

  • Uncle Milton

    Before anyone gets too excited, it is worth recalling what happened to GDP in the last recession.

    Dec Q 1989, small negative.

    Every one expected March Q 1990 to be negative, hence a recession could be declared on the stupid two consecutive negative quarters definition. But for some strange reason it came in positive. Of course Australia was actually in deep, deep recession but the March Q result enabled the government to deny that we were in a recession until there were two consecutive negative quarters. So they held out until the Sep Q GDP results cam out in Nov 1990, on which day Keating gave us his famous quip about a recession we had to have.

    Fortunately on this occasion policy has acted early, unlike last time when they didn’t even get started until the depths of the recession had passed. There’s no doubt the $900 did what it was supposed to do, which is boost consumption. Sometimes, the economics textbooks are right! But the economy is still deep in it, just less deep than would be otherwise.

  • the Economic Recession has been pretty hard on us. some of my friends lost their job because of the massive job cuts. i just hope that our economy becomes better in the following years.

  • the economic recession has been pretty hard on us. there is some good progress on the economy this year. i just hope that the economy will continue to recover in the following months and years.

  • i am hoping that the global economy would recover from this economic recession. life has been very hard with these massive job cuts.

  • Economic recession created huge unemployment rates around the world. I think the world economy is already on the road to recovery.

  • the economic recession made a lot of workers jobless. my best friend and me lost our jobs because of job cuts. i hope that our economy would recover soon.

  • the Economic recession made a lot of jobless people in my own country. We could only hope that our economy becomes strong again.

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