SYDNEY (AUSTRALIA) – With the coronavirus pandemic sending the country into its deepest recession since thirty years, Australia’s budget is set to nosedive into its biggest deficit since World War Two. This forces policymakers to announce hundreds of billions of dollars in stimulus packages.
In spite of managing the pandemic better than most countries, the impact of the crisis has left the A$2 trillion (1.12 trillion pounds) economy grappling with spiralling unemployment as many firms close down.
Treasurer Josh Frydenberg on Thursday said the budget swung into a huge deficit of A$85.8 billion ($61.3 billion) in the year-ended June 2020.
The economic shortfall is slated to widen to A$184.5 billion in 2020-21, the largest since World War Two.
With the coronavirus pandemic shattering businesses and affecting daily life, the GDP likely shrank by 7% in the June quarter, triggering recession for the first time since 1991.
“These harsh numbers reflect the harsh reality we face,” Frydenberg said. “The economic outlook remains very uncertain.”
Economic activity has picked up slowly as curbs have been eased across most parts of the country since late May.
But it will take time to fire on all cylinders as the second most populous state of Victoria is struggling with a second wave of infections.
“Recent events in Victoria are…a painful reminder how a setback in combating the virus can impact the speed and the trajectory of our national economic recovery,” Frydenberg said.
(Photos syndicated via Reuters)
This story has been edited by BH staff and is published from a syndicated field
