The World Bank is expecting more economies to experience contractions in per capita GDP than at any other time since 1870. The OECD is forecasting a contraction of 6 per cent in global growth this calendar year, compared with an annual fall of just 0.1 per cent in 2009 during the GFC.
Globally, the equivalent of nearly 500 million full-time jobs are estimated to have been lost over the first half of this year.
Indeed, Australia’s economic performance sits amongst the top when compared with other developed nations as a result of our health and economic plan to fight the virus.
In the United Kingdom, GDP fell by 20.4 per cent in the June quarter. In France GDP fell by 13.8 per cent, Canada by 11.5 per cent, Germany by 9.7 per cent and the United States by 9.1 per cent while New Zealand is expecting the economy to contract by more than 20 per cent.
This is in contrast to today’s National Accounts which show GDP fell by 7 per cent in the June quarter and contracted by 0.2 per cent in 2019-20. These results are consistent with Treasury forecasts in the July Economic and Fiscal Update.
Australia recorded its largest current account surplus on record of $17.7 billion or 3.8 per cent of nominal GDP. This is the fifth consecutive surplus, the longest period of current account surpluses since the 1970s.
Exports continue to be supported by Free Trade Agreements which now cover around 70 per cent of our two‑way trading relationships compared to just 26 per cent when we came to Government.
Inventories detracted 0.6 percentage points from GDP growth in the quarter, driven by Retail Trade and Wholesale Trade.
Nominal GDP decreased by 7.6 per cent in the June quarter, taking annual growth for 2019‑20 to 1.7 per cent, which is in line with Treasury’s forecast of 2.0 per cent in the July Economic and Fiscal Outlook.
And this is the international story. And this should not be lost on any Australian. We have performed better in the most difficult circumstances than all these other developed nations. Japan, the United States, Germany, the OECD average is just under 10 per cent, Canada at 11.5 per cent. Italy, France and of course the United Kingdom at over 20 per cent. And three times the fall of what we’ve seen here in Australia.