Australia’s Economy Shrinks Most in Eight Years; Currency Slumps
- Economy suffers only fourth quarterly slump in past 25 years
- Most observers see growth rebound from rising resource exports
Australia 3Q GDP Falls 0.5% Q/Q
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While Australia’s economy shrunk last quarter, it’s probably more of a red flag than a precursor to recession.
One of only four quarterly contractions in the past 25 years, the so-called ‘lucky country’ is unlikely to suffer a second consecutive slump -- just as in those prior periods. But it’s a wake-up call for lawmakers that recent political timidity and gridlock is unsustainable, as is reliance on monetary policy to support growth with a 1.5 percent interest rate that may not even fall further.