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Australia's economy shrinks in Q1, signals first recession in 30 years
[SYDNEY] Australia's economy shrank last quarter, setting the scene for what will be the country's first technical recession in three decades as entire business sectors shut down to fight the coronavirus.
Wednesday's data from the Australian Bureau of Statistics (ABS) showed the economy contracted 0.3 per cent in the first quarter ended March, the first decline in nine years.
That took the annual growth to 1.4 per cent, the slowest since the 2009 global financial crisis.
Household consumption was the biggest drag on growth last quarter with massive falls in spending on clothing, cars, transport, recreation, hotels, cafe and restaurant.
Australia's A$2 trillion (A$1.94 trillion) economy is facing its worst contraction since the Great Depression in the current quarter.
Two consecutive quarters of contraction would mean Australia would suffer its first technical recession since the early 1990s.
The economic fallout deepened in Australia as the number of local coronavirus cases surged from less than 100 in early March to more than 7,000 now, forcing the government to shut borders and restrict large gatherings.
The country's central bank stepped in by cutting the cash rate to a record low 0.25 per cent and launching an unlimited bond buying programme.
The data shows Australia's economy was struggling from a devastating bushfire season, a slowdown in tourism and weak domestic demand even before the coronavirus-related mobility restrictions kicked in.