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Friday 11th of February 2011
February 8, 2011    

Australia could see contraction in Q1

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by Kay Murchie

Australia, which is one of the few developed economies not to have fallen into recession like its counterparts throughout the world, could see its economy contract in the January to March period.

The warning came from Treasurer Wayne Swan after the country has been hit by flood and cyclone disasters, which has led to a fall in coal and agricultural exports.

Speaking to an Australian newspaper, Mr Swan said: “There is no doubt that the natural disasters will thump our economy in the first quarter of this year.

“As it stands, you couldn’t rule out a negative in that quarter,” he warned.

However, he remains optimistic and believes “the longer-term prospects for the economy are strong.”

Prior to the floods and cyclones, economic growth had slowed, expanding by just 0.2% in the July to September period, down from the 1.1% growth reported in the second quarter.

As a result, annual economic growth was 2.7%, significantly lower than the 3.3% previously reported.

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