Australia suffers biggest GDP decline in 20 years
Business digest: extreme weather causes 1.2 per cent drop in Australia’s first quarter growth
Australia has experienced its largest quarterly GDP decline in 20 years, government data has revealed. The economy shrank 1.2 per cent in the first three months of 2011.
Unprecedented storms and flooding are believed to have been a big factor in the drop, disrupting key raw material exports such as coal and iron ore.
Australia had been the only wealthy country to avoid recession in the global financial crisis. The latest figures – the worst quarterly GDP fall since the country's last recession in 1991 – have triggered fears that the country may be heading toward economic decline, although Treasurer Wayne Swan was quick to predict a "strong rebound" in the second quarter of 2011.
More worrying for the Australian economy is the perceived overreliance on raw material exports to China, revealed by the dip in GDP which followed disruption to mining from extreme weather. "What is clear is this," opposition Treasury spokesman Joe Hockey said, "if the mining boom has a cough, the Australian economy can suffer pneumonia."
Read a full report at the Guardian. ·
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