Home topics news Image Credit: Robert Bye on Unsplash Economy News Economy Is Australia in a recession? Yes and no Heidi Heck September 1, 2021 The economy is hard to measure. Today, the Australian Bureau of Statistics (ABS) released GDP data showing that Australia’s economy has been spared from a “technical” recession this quarter, with economic growth over the last four months sitting at 0.7%. However, this definition of a recession is flawed in its reliance upon a single data point: GDP. By definition, a recession is ‘called’ for lack of a better word, when Australia’s gross domestic product or GDP has been in decline for two consecutive months. This, though, is widely considered to be a meaningless definition. It is easy to rely upon GDP to explain the economy, but it often doesn’t display the economic reality accurately or honestly. Is Australia in a recession? Saul Eslake, one of Australia’s most prominent independent economists, believes Australia is currently experiencing a recession. “I think this ‘definition’ of a recession as necessarily entailing two or more consecutive quarters of negative growth in real GDP is rather silly and lazy,” Eslake said A recession, by definition, has little to do with GDP. A recession occurs when there is a contraction in the business cycle, most often caused by a widespread drop in spending. To put it simply, a recession occurs when there is less money in circulation. Recession under its current definition is a much loved economic buzzword, but the reality of