Australia is the only major Western economy to have avoided recession, defined as two successive quarters of negative growth. GDP accelerated in the second quarter, notching up a rise of 0.6%, three times higher than expected. This follows a 0.4% increase between January and March, taking growth out of negative territory after just one quarter.
What the commentators said
A key reason for Australia's resilience is the government stimulus package focusing on cash hand-outs for consumers and infrastructure spending. As a result, Australia is heading for a record budget deficit, said Lex in the FT; but "Canberra deserves credit for running a surplus in the first place".
Australia has also been shielded by a "non-dysfunctional banking system" that steered clear of risk.
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Most important of all are its trading links with China. "As China's preferred supplier of rocks and crops" it has "piggybacked off a stimulus nine times larger than its own". With inflation unlikely to stay below target for long as the economy strengthens, said Capital Economics, Australia could hike rates by the end of the year.
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