Australia’s Gross Domestic Product (GDP) fell 1.9 per cent in seasonally adjusted terms in the September quarter of 2021, marking the third-biggest quarterly fall since records began in 1959.
Despite the plunge, the fall is largely better than market expectations and covers the period where much of Australia was locked down as part of Delta-strain COVID-19 restrictions.
The largest ever recorded fall came in the June quarter of 2020, when GDP fell by 6.8 per cent.
The second-biggest plunge was in the June quarter of 1974 when the nation’s economy fell by 2.0 per cent.
On an annual basis, Australia’s GDP is still up by 3.9 per cent.
Acting Head of National Accounts at the Australian Bureau of Statistics Sean Crick said lockdowns saw household spending drop dramatically.
“Domestic demand drove the fall, with prolonged lockdowns across NSW, Victoria and the ACT resulting in a substantial decline in household spending. The fall in domestic demand was only partly offset by growth in net trade and public sector expenditure,” Mr Crick said.
“GDP in the September quarter 2021 was 0.2 per cent below the December quarter 2019 pre-pandemic level.”
In order for Australia to be technically considered to be in a recession, it must post two consecutive quarters of negative GDP growth.
In the previous quarter, the nation’s economy grew by 0.7 per cent.
GDP is the total market value of all finished goods and services produced within a country’s borders.
It is a general indicator of the health or trajectory of a nation’s economy.