In an address to the Australian Institute of Company Directors in Adelaide yesterday, RBA Governor Glenn Stevens confirmed that Australia is in fact in a recession.
In his “Road to Recovery” speech, Mr Stevens pointed to a global recession, with virtually all of Australia’s trading partners contracting.
“Whether or not the next GDP statistic, due in early June, shows another decline, I think the reasonable person, looking at all the information available now, would come to the conclusion that the Australian economy, too, is in recession,” Mr Stevens said.
However he said that Australia is doing much better than the rest of the world and will be better placed when the eventual recovery does come.
“Australia’s genuine long-term economic prospects remain good, and there remain good grounds to think we will continue to weather the storm better than most.”
He put this down to Australia’s stable banking system, stimulus measures and trade with Asia.
“Consumer demand in Australia, while weak compared with recent years is actually as the stronger end of international comparisons among advanced countries. This presumably owes something to the stimulatory effects of fiscal measures and lower interest rates for borrowers.”
He said it is important for Australians to remain confident.
“It is such confidence that… will help us drive along the road to recovery.”
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