Australia has entered its first recession in almost three decades after Covid-19 battered the economy, which shrank a record 7 per cent in the June quarter.
The decline in gross domestic product follows a fall of 0.3 per cent in the March quarter, marking two consecutive quarters of contraction — the technical definition of recession — according to the Australian Bureau of Statistics.
“The global pandemic and associated containment policies led to a 7 per cent fall in GDP for the June quarter. This is, by a wide margin, the largest fall in quarterly GDP since records began in 1959,” said Michael Smedes, ABS head of national accounts.
The economic contraction was worse than expected, with economists forecasting a 6 per cent fall in the second quarter and a decline of just over 5 per cent on an annual basis. The ABS figures revealed that GDP fell 6.3 per cent in the 12 months to the end of June.
A 12 per cent decline in household consumption and a 17 per cent fall in spending on services, particularly transport, hotels, cafés and restaurants, dented economic output.
A big drop in imports, particularly travel services owing to border…