Prime Minister Kevin Rudd has conceded that the economy will be dragged into a recession.
Previously avoiding the dreaded “R” word, Mr Rudd’s concession came after advice from economists that the economy is already in a recession and that Australia’s weakening trading partners is pushing the nation’s economy down.
“The worst global economic recession in 75 years means it’s inevitable that Australia will be dragged into recession,” Mr Rudd told an economic forum in Adelaide on Monday.
“The severity of the global recession has made it impossible for Australia to avoid a further period of negative economic growth.”
Mr Rudd’s comments came as new data showed inflation pressures were clearly in decline and the Government has indicated they won’t stand in the way of the Reserve Bank of Australia trimming the official cash rate again if it needs to stimulate the economy further.