After 28 years of growth, Australian economy is showing a decline
During the pandemic, Australian economy was in a winning position, and unlike many countries, it showed good growth. However, now the situation has changed, and analysts predict that the segment will face immediate problems.
According to the country’s Finance Minister, Australian 28-year economic growth cycle is over and now begins a period of recession, the severity of which is too early to judge.
The main reason for this situation is quarantine restrictions not only within the state, but also in the world as a whole. The official said that the Australians should prepare for difficult times, but the government promised to make every effort to minimize the impact of the crisis.
The country finished the second quarter with a 5.9 percent decline in GDP, which was less than HSBC predicted – its experts said the decline was 7.5 percent.
Some time ago, experts stressed that the pandemic had had a positive impact on the economies of Australia and countries such as Korea and New Zealand. Positive results were achieved through effective and timely measures to prevent the growth of diseases. Such a well-thought-out policy of the authorities increased the interest of foreign investors in Australia, and they began to actively buy government bonds. This, in turn, led to the strengthening of the national currency.
However, it should be noted that a strong currency does not always have a positive impact on the economy. It has a negative impact on exporters, as their products lose competitiveness in the world market. On the other hand, a strong Australian dollar helps attract a large number of foreign investors.
At the first cases of disease severe restrictions began to apply in Australia, which had some differences in different countries. These included cancelling mass gatherings of people, more than two people, going outdoors except for food or medicine, and recommending switching to the remote work format.
Quarantine exits were carried out in three stages, the first of which began in May. In summer, the number of those who fell ill again began to go up, but the population of the country self-organized in time and a new wave of coronavirus was avoided.
It softened the impact on the Australian economy and its remoteness from major COVID-19 outbreaks, for example, Europe or Asia. Tourist traffic was limited, which also had a positive impact. A total of 7.2 thousand people were registered in the country during the pandemic, 102 of them died.
In addition, Australia has a high level of health care, which is also a plus for investors during the pandemic.