Australia's longest economic growth in the world for more than 28 years has come to an end, the website of Japan Economic News reported on September 3. Real GDP in the second quarter, released by the Australian Bureau of statistics on September 2, was down 7% month on month. Although it is expected to turn into a recovery within the year, the increasing friction with China, the largest trading partner, has cast a shadow on the future.
"The once-in-a-century new crown pandemic has caused a recession," Australia's finance minister stressed at a press conference on September 2. Due to restrictions on going out, service consumption declined, and personal consumption fell by 12.1% month on month. The ban on foreigners also affected tourism services, and exports fell by 6.7%.
Reported that the first quarter of Australia's quarter on month economic growth has been negative. This is the first two consecutive quarters of negative growth since 1991.
The report also said that the real growth rate was down 6.3% year-on-year. Due to the relatively good control of Xinguan epidemic situation, it performed better than the United States and Japan.
The report noted that since the last recession in 1991, Australia's economy has experienced three negative quarterly growth.
From 2000 to December, IT was affected by the aftermath of the collapse of the IT bubble. From 2008 to December, it was affected by the financial crisis. 2011 1 to March was affected by floods in the northeast. These three negative growth lasted only one quarter, and the next quarter returned to positive growth. The background is the rapid growth of China's economy.
China's import of Australian iron ore and coal surged after China joined the World Trade Organization in 2001, the report said. After the 2008 financial crisis, China's demand for resources has not weakened at all.
After the end of the resource boom in 2013, it is still China that drives Australia's economy, the report said. China's capital flows into the Australian real estate market, and residential investment is activated, becoming a new pillar of economic growth.
According to the report, a greater direct risk than the export of agricultural products is the decrease of tourists and foreign students from China. Before the outbreak, Chinese tourists and international students spent 0.8% of GDP in Australia. Although Australia still forbids foreigners from entering the country in principle, if the relations with China are not improved after re opening the border, the economy will inevitably be affected.
Melbourne, Australia's second-largest city, has seen an increase in new infections since the end of June. The state of Victoria, where Melbourne is located, restarted the restrictions on going out in July and issued a ban on night going out in August, dragging down the recovery of personal consumption, which accounts for about 60% of GDP, according to the report. Australia's growth rate in the third quarter is expected to hover at a slightly lower level on a month on month basis, and most views believe that the real recovery will wait until the fourth quarter.