Australia’s economic health revealed but lockdown impact looms

Australia's gross domestic product (GDP) rose 0.7 per cent in the three months to June, but the full impact of ongoing COVID-19 lockdowns is yet to be felt.

New data from the Australian Bureau of Statistics (ABS) showed that in the three months to June (that is April, May and June 2021), GDP per capita also rose 0.4 per cent.

For 2020-21 Australia's GDP has now risen 1.4 per cent.

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Melbourne CBD under lockdown.

The ABS said while the nation's economic figures were generally positive, they preceded much of the nation's current lockdown measures used to stop the spread of the Delta strain of the virus.

"Gross domestic product (GDP) rose 0.7 per cent this quarter, reflecting the continued easing of COVID-19 restrictions and the recovery in the labour market," the ABS said in its release.

"Lockdowns had minimal impact on activity overall, with fewer lockdown days and the more prolonged stay-at-home orders in NSW only commencing in the last week of June."

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GDP is the total market value of all finished goods and services produced within a country's borders.

It is a general indicator of the health or trajectory of a nation's economy.

Some economists fear a mild lift in the GDP for the June quarter will not be enough to stem the losses forecast for the September quarter.

If the September quarter (which includes the months of July, August and September) produces a significantly negative GDP figure, Australia could be facing a "double-dip technical recession".

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There are 754 people in isolation on the mine site.

To be in a recession, a nation must post two consecutive quarters of negative GDP growth.

That would mean the December quarter (October, November and December 2021) would also have to be negative.

Given today's GDP rise of 0.7 beat expectations, it's unlikely that a "double dip" recession will be had.

"Whether Australia manages to escape another technical recession also depends on the December quarter GDP outcome," David Bassanese, Chief Economist at BetaShares said.

"And on that score, we remain crucially dependant on the lockdown situation across the country.

"So even a worst-case scenario where current lockdowns are extended beyond September, we might still narrowly avoid a technical recession, if only because most of the decline in activity would have already taken place."

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