Treasurer Josh Frydenberg declared yesterday that Australia is officially in recession, following the release of the GDP figures for the March quarter.
The ABS reports that Australian GDP fell 0.3% in seasonally adjusted, chain volume terms in the March quarter 2020 and growth slowed to 1.4% through the year.
ABS Chief Economist Bruce Hockman said that these figures represent only the beginning of the economic impacts from COVID-19.
"This was the slowest through-the-year growth since September 2009 when Australia was in the midst of the Global Financial Crisis and captures just the beginning of the expected economic effects of COVID-19," he said.
The ABS reports that in the March quarter, net trade contributed 0.5 percentage points to GDP while imports of goods fell 3.9% with falls in consumption and capital goods reflecting weak domestic demand.
The household saving to income ratio rose to 5.5% in the March quarter, reflecting a rise in gross disposable income and falls in consumption.
Gross disposable income was driven by a 6.2% increase in social assistance benefits due to both an increase in the number of recipients and the introduction of new government support packages in response to COVID-19 and bushfires.
According to reports, Treasury expects the contraction in June will be worse than the March quarter, but might not reach Treasury's previously forecasted 20% GDP fall.
When asked by media if the country was in recession, Frydenberg responded: "The answer to that is yes."
"And that is on the basis of the advice that I have from the Treasury Department about where the June quarter is expected to be," he continued.
"The June quarter, the economic impact will be severe. Far more severe than what we have seen today. That’s what Treasury’s advice to me is," he said.
Read the latest ABS figures here.