You wouldn’t usually think of Poland and South Korea when you think of classic Aussie bed fellow but think again. The recent release of the national figures that measure these sorts of thing has our economy growing by a faster-than-expected 0.4 per cent in the first three months of this year. This pulls us out of the jaws of technical recession and as such we join our new best mates Poland and South Korea as the only economy in the industrialized world not to fall into a recession care of the global financial crisis. Perhaps you ought to throw a few hand fulls of Polish cabbage and some Korean sushi on the Barbie to celebrate?
But I digress…
So what is a technical recession and why should we care? No one really knows which boffin coined it but it’s largely accepted wisdom that a technical recession is when you have two quarters in a row of economic contraction i.e. our economy shrinks and things go south. The term we use to measure an economy’s growth is the Gross Domestic Product (GDP) which is the market value of all the final goods and services a country makes in a year. FYI Australia’s GDP is slightly higher than the UK and Germany and has averaged around 3.6% over the past 15 or so years, so nice one people and well done ball boys.
So with the economy growing by a faster-than-expected 0.4 per cent in the first three months of this year we have escaped having two quarters of what Kevin Rudd calls “negative growth” in row. Mind you we’ve escaped that by the hair of our chinny chin, chin as 0.4% is a pretty small beer compared to China which hovered around 10% for years until the whole shebang turned sour.
OK now for the slightly heavy bit. With out getting to complex the major contributor to the March quarter “growth” was the fact that we imported less and exported more. And as a few commentators have pointed out imports fell because companies aren’t importing as many widget makers and flim flam machines they were before the wheels came off. So err sorry but it’s a little premature to say we are out of the forest yet but hey enjoy the good vibes while they last.
But for now dear readers go forth and bask in the sun light of prosperity, oh yea and do a spot of frock shopping to help out the retail sector while you’re at it.