Business & Economy

Australia’s economy ‘rebounding strongly’ from recession

Sydney, Australia, Sep 17 (efe-epa).- Australia’s economy is experiencing strong recovery from recession amid the impact of the Covid-19 pandemic, Treasurer Josh Frydenberg said Thursday.

He was presenting a budget report that also revealed that the country’s deficit and unemployment figures are expected to be lower than initially forecast.

“The Australian economy is rebounding strongly following the biggest economic shock since the Great Depression,” Frydenberg said when delivering the update.

The 2020-21 Mid-Year Economic and Fiscal Outlook (MYEFO) indicates that the budget deficit will fall just under AU$198 billion ($150.3 billion), which is equivalent to 9.9 percent of GDP and 8 percent less than forecast in October.

On the other hand, the unemployment rate is expected to peak at 7.5 percent in the first quarter of 2021, about 0.5 percentage points less than calculated in the 2020-21 budget delivered in October, while GDP will increase 4.5 percent in 2021 after a drop of 2.5 percent this year.

This improvement is due to a reduction in JobKeeper wage subsidies – financial aid given to employers aimed at protecting employees and jobs, one of the key policies promoted for the economic recovery.

“Eighty five percent of the 1.3 million Australians who either lost their jobs or saw their working hours reduced to zero at the start of the crisis are now back at work,” Frydenberg said.

The third quarter saw a GDP increase of 3.3 percent, the highest quarterly increase since 1976, he added.

The treasurer also stressed that the recovery is also due in part to the rise in the price of iron, a raw material of which Australia is the world’s leading exporter.

But he said the country was “not out of crisis yet.”

“Technically the recession is over, but the recovery is not,” he said. “The economic indicators are positive. That being said, this is a very challenging time and there’s a lot of ground to make up.”

Australia, whose second wave of Covid-19 in the city of Melbourne between June and November delayed its economic recovery plans, has accumulated more than 28,050 confirmed cases since the beginning of the pandemic, including 908 deaths. EFE-EPA


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