Six months makes a bad difference
Just when you thought it was safe to return to the shopping centre, the Australian economy experiences a quarter of negative growth for the first time since the turn of the century.
On Tuesday, there had been optimistic soundings from the Reserve Bank of Australia, which justified its decision not to lower interest rates any further because the Aussie economy had not "experienced the sort of large contraction seen elsewhere.'' Twenty-four hours later, the Australian Bureau of Statistics confirmed that during the December quarter GDP dipped by 0.5% - its first contraction since December 2000.
Technically speaking, of course, Australia is not in recession. The country has not experienced two quarters of consecutive negative growth. But most Australians do not care for such linguistic and statistical niceties and distinctions. So for all the hope that China's continued growth would offer a wall of protection, Australia now appears almost certain to go into recession.
During the early 1990s, when Australia lived through its last downturn, the former Prime Minister Paul Keating famously said this was "the recession we had to have" - largely because it ended the period of soaring inflation and the stratospheric interest rates needed to combat them.
This, though, will be the recession that his Labor successor, Kevin Rudd, hoped desperately to avoid.
Certainly, the Treasurer, Wayne Swann, had set great store in what he helped dub the "socks and jocks" bounce. In one of those upbeat assessments that tend to haunt Treasurers and Chancellors of the Exchequer, he cited that spending on socks and underwear was a key element of a spike in retail spending in December and January, as low income earners spent their cash hand-outs from the government. But only last week, Pacific Brands, which owns the famous undies brand, Bonds, announced the closure of its Australian factories, and with it the loss of 1,850 jobs.
It is always dangerous to mix talk of stimulus packages with underwear, and Mr Swann's analysis was left looking rather threadbare. You can get his reaction to today's GDP figures .
As this blog optimistically noted, Australia was sitting fairly pretty back in September after the collapse of Lehman Brothers. Its banks were strictly regulated and did not require bail-outs, there wasn't much of an Aussie sub-prime market to speak of, its government was cashed up because of the resources boom and China's growth still looked robust.
In six disorientating months, the resources boom has ended, the government has gone into deficit, and you don't need to be fluent in Mandarin to realise that China is experiencing a slowdown.
After surviving the 1997 Asian financial crisis and the 2000 dot.com bubble, Australia had hoped to complete the impressive hat-trick of not being forced into recession by the Global Financial Crisis. But given the turmoil elsewhere, this seems to be the recession that it could not avoid.
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