Business & Economy

Australia steadies economic recovery after 1.1% GDP drop in 2020

Sydney, Australia, Mar 3 (efe-epa).- Australia underpins its economic recovery after accumulating two consecutive quarters of growth, despite registering a GDP fall of 1.1 percent, according to data officials released Wednesday.

The Australian Bureau of Statistics reported that in the last quarter of last year, between October and December, GDP increased by 3.1 percent, above forecasts, mainly driven by iron exports, the increase in domestic spending and private investment.

This result continues the rise of 3.4 percent in Australian GDP in the period between July and September 2020.

“Despite two consecutive quarters of strong growth, economic activity remains 1.1 percent lower than that registered in the quarter that ended in December 2019,” Michael Smedes, head of the bureau’s National Accounts, said in a statement.

Smedes also remarked that “it is the first time in the 60-year history of the National Accounts that a GDP has grown by more than 3 percent in two consecutive quarters,” highlighting the results that follow the recession Australia suffered after 30 years of economic expansion.

During the Covid-19 pandemic, the Australian economy contracted by 0.3 percent and 7 percent in the first two quarters of the year, respectively, as a result of containment measures and restrictions to prevent the massive contagion of the new coronavirus.

To counteract the effects of the pandemic, Australia’s government gave aid packages since March last year, including wage and unemployment subsidies, in addition to granting economic stimuli equivalent to 13.3 percent of GDP.

The government, which plans to suspend its salary subsidies at the end of the month, forecasts that the economy will grow by 5 percent this year and 3.25 percent in 2022, according to data from the national budget published in October. EFE-EPA


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