Australia counts the cost of flood and cyclone disasters

| April 4, 2011 | 0 Comments

The Treasury department has estimated that the disasters that hit Australia earlier this year will cost the economy AUS$9 billion (£5.8 billion).

The figure is considerably higher than a previous estimate of AUS$5.6 billion.

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 first quarter because of the disasters.

Treasurer Wayne Swan comments: “The biggest effect will be on the coal industry with output down by about a fifth. Lost coal production could cost AUS$6bn, which is AUS$1bn more than previously estimated.”

Meanwhile, damage to crops is expected to cost AUS$2 billion, while the tourism industry will be hit.

However, Australia could also see a knock-on effect from the earthquake and tsunami that hit Japan last month.

Japan is Australia’s second biggest trading partner, exporting 15% of its goods to Japan in 2009-10.

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