AUSTRALIAN ECONOMY CLIMBS UP TO PRE-PANDEMIC TIMES
Australia’s economy has continued its rapid rebound, to grow larger than it was before the Covid-19 pandemic.
Official figures show that gross domestic product (GDP) rose by 1.8% in the first quarter, beating expectations.
Growth was spurred by a soaring demand for commodities around the world and spending by consumers and businesses.
Last year, Australia was tipped into recession after lockdown measures were imposed across the country.
Rising household spending, investment by businesses, and higher prices of iron ore and gas exports helped drive the expansion, according to the Australian Bureau of Statistics.
The country’s speedy recovery has been helped by its ability to contain coronavirus outbreaks, which boosted consumer and business confidence.
Huge amounts of government spending and economic stimulus from the Reserve Bank of Australia have also helped to super-charge the rebound.
Yesterday, Australia’s central bank held interest rates at record lows and signalled that it would keep borrowing costs down to help spur the country’s economic recovery.
The Reserve Bank of Australia kept its official cash rate at the all-time low of 0.1% for the sixth meeting in a row, as policy-makers said they would continue to monitor inflation and rises in wages and house prices.
The country’s relatively slow rollout of Covid-19 vaccines remains a potential risk for a sustained economic recovery.
Concerns around low vaccination rates have been heightened by a fresh coronavirus outbreak in Melbourne, that has prompted another lockdown in Australia’s second biggest city.
“An important ongoing source of uncertainty is the possibility of significant outbreaks of the virus, although this should diminish as more of the population is vaccinated,” Reserve Bank of Australia Governor Philip Lowe said on Tuesday.
Last year, Australia’s economy was plunged into its first recession in nearly 30 years, as it suffered the economic fallout from the coronavirus.
GDP shrank 7% in the 2020 April-to-June quarter compared to the previous three months.
It was the biggest contraction since records began in 1959, and came after a fall of 0.3% in the first quarter.