Experts warn Australia could be headed for a recession after the Australian Bureau of Statistics reported slow economic growth in the first three months of the year.
Gross domestic product (GDP) refers to the value of goods and services produced over a certain time.
For the three months to March 2024, GDP rose by 0.1% — the weakest quarterly growth since September 2022, according to figures released on Wednesday.
A recession is generally declared after two consecutive quarters of negative GDP.
What’s a recession?
Recessions are characterised by a major downturn in economic activity, which generally results in significant job losses.
Australia’s last recession was in 2020, at the start of the COVID-19 pandemic.
Australia also experienced economic stress during the 2008/09 Global Financial Crisis, but didn’t technically enter a recession.
In last month’s Federal Budget, the Government predicted GDP would grow by 2% across the next three financial years.
0.1% GDP rise
ABS data published on Wednesday shows GDP rose by 0.1% in the three months to March 2024.
Reserve Bank Governor Michele Bullock said she expected lower GDP figures because spending is slowing for most age groups, especially among younger people.
It follows a steady downturn in economic growth, driven by high interest rates and inflation (rising prices).
Will a recession happen?
There’s concern that GDP figures could soon veer into the negative, based on recent dwindling economic growth.
Federal Treasurer Jim Chalmers acknowledged that the national economy was “barely growing”, but dismissed suggestions of a looming recession.
Chalmers said that “any growth” in the March quarter was welcomed, and that he expected similarly low figures for the three months to June this year.
The Government has forecast an uptick in economic growth from the end of this year.
