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Australia’s economy was already weak - and the coronavirus pandemic has belted it into recession

Katharine Murphy reports in The Guardian (2.9.20) on the release of ABS data showing Australia’s economy had gone into recession in the last financial quarter, suggesting what might be expected in the federal government’s response.

'Obviously, the number is very bad. Australia’s economy contracted by 7% in the June quarter, which is the worst quarterly fall on record, and a million Australians are unemployed.

'At the beginning of the pandemic, econocrats were hopeful this would be a V-shaped recovery. Now, nobody has been talking about a V-shaped recovery for some time.

'But the point is not the negative number in the gross domestic product column for the June quarter of 2020, even though the number is terrible. The point is the event the number heralds.

'… the scale of the economic downturn, both here, and around the world, suggests that deeper thinking will be needed. The environment is strongly suggestive that what’s required to turn things around will be more than reverting, mindlessly, to the orthodoxies that have dominated postwar economic thinking.

'Morrison has been able to shape shift to manage the crisis, but a big question remains about whether he can be the leader Australia needs during the recovery.'

 

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