Australia economy shrinks 1.1% in 2020

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FILE PHOTO: An Australian flag is pictured at its embassy in Beijing, China January 24, 2019. REUTERS/Jason Lee

Australia’s economy contracted 1.1 percent in 2020 as the coronavirus pandemic took hold, but saw a remarkable recovery late in the year as outbreaks were brought under control and restrictions lifted.

Official figures released Wednesday showed the economy grew 3.1 percent in the October-December quarter following a 3.4 percent increase in the previous quarter.

The Australian Bureau of Statistics said it was the first time since records began 60 years ago that the nation had recorded two consecutive quarters of more than three percent growth, albeit from a low base.

Prime Minister Scott Morrison tweeted that the country’s “comeback… continues to gather pace”, hailing the figures as “better than all the G7 countries and the OECD average”.

However the result was not enough to lift the economy to pre-pandemic levels, as growth remained 1.1 percent lower compared with December 2019.

The spread of the coronavirus last year sent Australia tumbling into its first recession in three decades, with a record seven-percent decline in the June quarter following a 0.3-percent dip in the first quarter of 2020.

A recession is generally defined as two successive quarters of economic contraction.

Australia’s central bank this week predicted the economy will return to pre-pandemic levels by mid-2021, far earlier than previously forecast.

Higher unemployment is expected to persist, with the 6.4 percent jobless rate recorded in January still 1.3 percent higher than a year ago.

Australia has largely relaxed virus restrictions after successfully curbing outbreaks, recording just under 29,000 cases and 909 deaths.