Mubasher: Australia reported its sharpest economic decline on record in the second quarter (Q2) of 2020 due to the shutdown measures taken to contain the coronavirus (COVID-19) pandemic, falling into its first recession in about three decades, Reuters reported on Wednesday, citing official data.

The country’s $1.47 trillion economy contracted by 7% in the April-June period from a 0.3% fall in the prior quarter, data from the Australian Bureau of Statistics showed.

Recession has hit several countries in 2020, including the US, Japan, the UK, and Germany as they posted two straight quarters of economic slump.

“Today’s national accounts confirm the devastating impact on the Australian economy from COVID-19. Our record run of 28 consecutive years of economic growth has now officially come to an end,” Treasurer Josh Frydenberg told reporters in Canberra.

This is Australia’s first economic downturn since 1991 and the deepest fall in the country since records started in 1959.

The government provided over AUD 300 billion of stimulus; however, the gloomy data stresses the need for more stimulus as activity is expected “to return to pre-pandemic levels” by early 2022. 

In March, the Reserve Bank of Australia (RBA) reduced interest rates to a record 0.25% in an emergency meeting,

On Tuesday, the RBA expanded its cheap funding facility for the country’s lenders to maintain low-cost credit flowing in the economy.