Recession has come to Australia after all, RBA says

On Tuesday, Reserve Bank of Australia’s governor, Glenn Stevens, stated Australia is in the economic recession now. He said to business leaders in Adelaide that never before the country had managed to avoid a global economic collapse. Mr. Stevens admitted the current state of the economy a day after Prime Minister Kevin Rudd said it was "inevitable" the country would be dragged into recession caused by the global economic crisis. 

Mr. Stevens admission was not a surprise as Mr. Rudd announced in March the country could not "continue to swim against the global economic tide" after the country’s economy turned to negative growth for the first time in eight years. The current recession appeared to become the eights in the history of Australia since World War II. All of the recessions were resulted by the international business cycles. 

While there has so far been only one contraction, with the December quarter showing the economy shrank by 0.5 percent, the non farm economy has already returned two consecutive negative quarters. According to the analysts’ estimations Australia has been already in recession in spite of receiving a stimulus package of $50 billion and successive interest rate cuts.

Nevertheless the RBA’s governor has a firm belief Australia has strong potential for recovery. According to his opinion, the country’s getting trough would depend on the key economic conditions and banking sectors state.