Coronavirus threatens Australia’s record run of economic growth | Daily News


Coronavirus threatens Australia’s record run of economic growth

Australia’s three-decade unbroken run of economic growth is in large part due to its success in tapping the rise of its largest trading partner, China.

But as the deadly coronavirus outbreak shuts down a swath of the Chinese economy, just as Australia suffers its own crisis in the form of the devastating wildfires emergency, economists are warning that the 28-year stretch is under threat. “There is a very real risk that gross domestic product will contract as a result of the combined drag from the bushfires and coronavirus,” said Sarah Hunter, economist at BIS Oxford Economics.

“Whether we go from this to a recession critically depends on how the outbreak unfolds.” Australia’s economy was already showing signs of weakness before the wildfires took hold in the fourth quarter. Gross domestic product growth of 1.7 per cent in the year to September compared with 2.8 in the previous 12 months, thanks to weak consumer spending and the pre-virus slowdown in China.”

“Goldman Sachs has forecast that the fires which burnt millions of acres of land could knock 0.3 percentage points from Australia’s GDP growth in the half-year to March. With two-way trade between Australia and China worth A$ 215 bn in 2018, the most-recent data available, the crisis caused by the virus adds to the downside risk.

( USA)

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