Australian economy sees worst performance since 1992, excluding pandemic

Australia’s economy has posted its worst performance in more than 30 years, excluding the first year of the COVID-19 pandemic.

Australia’s gross domestic product (GDP) expanded by just 0.2 percent in the April-June period and 1 percent over the last year, the Australian Bureau of Statistics said on Wednesday.

Excluding 2020, annual growth was the slowest since 1991-92 – when Australia was recovering from a recession.

On a per capita basis, which accounts for the effect of record levels of immigration, GDP fell 0.4 percent on a quarterly basis – the sixth consecutive decline – 1.5 percent year on year.

Before the pandemic, Australia enjoyed an unprecedented three-decade streak of uninterrupted economic growth, emerging from the 2008 global financial crisis as the only major economy to avoid recession.

Australia’s post-COVID recovery is struggling after the central bank raised interest rates 13 times between May 2022 and November 2023 in an effort to cool inflation that had been running at a quarter-century high.

On Sunday, Treasurer Jim Chalmers said the successive interest rate hikes were “smashing the economy”.

While the weak economic data is likely to spur calls for the Reserve Bank of Australia to cut rates, inflation rose slightly in the June quarter and remains well above the central bank’s target of 2-3 percent.

Rising discontent over the economy has drained support for Prime Minister Anthony Albanese’s Labor Party government.

In a Newspoll opinion poll released on Monday, 41 percent of respondents said they approved of Albanese’s performance compared with 54 percent who disapproved – the Australian leader’s worst performance since his election in May 2022.

In separate polling by RedBridge, just 24 percent of Australians said they could name a single thing that had improved their lives since he entered office.