Australia’s Gross Domestic Product (GDP) declined by 0.5% in the December quarter, according to the latest National Accounts figures.
The 0.5% contraction was lower than most commentators had predicted. Two consecutive quarters of contraction (illogicially known as “negative growth”) is defined as a recession.
Speaking in Canberra today, Treasurer Wayne Swan said the decline was to be expected but that Australia was cushioned to some extent from the global financial crisis by its stronger financial system.
Swan also argued that an increase in household savings in the quarter was a result of the 3% reduction in interest rates which had led to consumers paying down debt and restructuring their finances.
Swan said the effects of the government’s stimulus packages was yet to be fully reflected in the National Accounts.
Click the PLAY button to listen to Wayne Swan’s press conference:
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Tanya Plibersek, the Minister for Housing and Minister for the Status of Women, has delivered an interesting speech about the need for “a new conversation about equality”.
The Governor of the Reserve Bank of Australia, Glenn Stevens, says the risk of a “global economic catastrophe” has declined.
