The wrath of the pandemic has bought massive disasters for the economies. Some of the world’s strongest economies have been suffering and going downhill, whereas on the contrary, the GDP of China, which was the birthplace of Covid-19, has recorded an increase of 3.2% in the second quarter.
As per the reports of the recent quarter, the GDP of Australia, Canada, Italy, Germany, the United Kingdom, the United States, Brazil, Rusia, France, and other huge economies have been falling. After pushing The US (GDP sank by 32.9%), India (GDP sank by 23.9%), and The UK (GDP sank by 10.4%) officially into recession, Australia is now another such country.
The GDP of the country contracted by 7% as compared to the previous quarter, as stated by the Australian Bureau of Statistics (ABS), The GDP shrank 0.3% in the first quarter, recording the greatest drop since records began by 1959. As estimated by the analysts by Refinitiv, the fall was worse than just 5.9%. This has been attributed to the strict lockdown measures to contain Covid-19, like all other countries, but Australia before the lockdown had already been wrangling with issues, as the country saw one of the world’s worst wildfires hampering the consumer spending according to the Australian Tourism Export Council. The lockdown hit household consumption, which plunged more than 12%, while spending on services cratered nearly 18%.
“We have done everything possible to cushion the blow for the Australian community from Covid-19,” Treasurer Josh Frydenberg said in Canberra on Wednesday. “Our priority has and will continue to be saving lives and ensuring that Australia’s healthcare system has the capacity to test and to trace and to treat coronavirus cases.” As predicted by the experts, there is more pain to come in. The road to recovery, unfortunately, depends on how long the pandemic lasts. The state of Victoria — Australia’s second-most populated and home to the city of Melbourne — has now been facing the most strict lockdown as the brutal second wave of the virus hit the cities.
The recession will pressure the Reserve Bank of Australia to roll out new measures keeping the economy afloat. The Central Bank has already reduced the cash rate to an all-time low to combat the fall along with the businesses and the households and help them.
The pandemic has crippled the economies, and the recovery is uncertain and depends on when the pandemic will be in control or the vaccines will be rolled out.
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