Australia suffers first quarterly contraction

The December 2008 quarter GDP results released yesterday, indicated that the pull of the global downturn might prove too strong for Australia to avoid recession.

In the three months to December 2008, gross domestic product contracted by 0.5 per cent, taking the annual rate of economic growth to just 0.3 per cent. This represented a substantial decline in annual growth from 1.9 per cent just one quarter prior.

With a majority of the world's most advanced economies now in recession, Prime Minister Kevin Rudd said Australia could not avoid the pull of global economy’s slowdown.

“Australia can reduce the impact, cushion the impact of the global economic tide but we cannot stop it altogether,” he said.