RBA Governor confirms Australia is in Recession

In a very predictable announcement today the Reserve Bank formally decalred that Australia has joined it’s global peers in an economic recession. The Australian said the candid admission by RBA Governor Glenn Stevens matched a similar message from Kevin Rudd and Treasurer Wayne Swan who both signalled this week that Australia was on track for it’s first recession since the early 1990s.

“Whether or not the next GDP (gross domestic product) statistic, due in early June, shows another decline, I think the reasonable person, looking at all the information available now, would come to the conclusion that the Australian economy, too, is in recession,” Mr Stevens said.

This article was only printed by The Australian today, although The Age reported on the admission at the beginning of April. The Age gave a much gloomier review of Treasurer Wayne Swan’s speech, saying that Australia had taken the first of two quarters of negative growth commonly taken to define a recession at the end of last year.

Treasurer Wayne Swan said the forecasts underlined “just how severe this global recession has become”. 

“The world economy is in the midst of its deepest and most severe recession in our lifetimes, and Australia will feel the consequences,” he said.

The Reserve Bank had been predicting a positive growth up until Feburary this year so this is the first announcement of recession from any RBA official.

The Sydney Morning Herald also reported today that Australian shares suffered their biggest fall in six weeks after US stocks plummeted: a result of the Bank of America’s earning reports. The Age confirmed this yesterday describing NAB’s estimation that the big four banks would be unable to refinance $190 billion dollars of commercial property debt without the help of the state-created “RuddBank.”

From all the other media attention I kind of figured we were already in an economic recession – but perhaps the RBA governer didn’t want to worry everyone until it was fully confirmed.

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Published in: on April 21, 2009 at 7:59 am  Leave a Comment  

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