Impending Recession or Recovery?
Posted on 04. Mar, 2009 by Global in Economic News
Looks like our Economists got a little surprise today because they expected the Australian Bureau of Statistics to report a slight increase in the country’s Gross Domestic Product, or GDP figure.
Well, today’s figure was negative, surprise, surprise! But hey….at least agriculture, fishing and forestry recorded a positive + 0.2% growth!
What the media won’t tell us when they stir this one up though, is that the latest GDP figure is for the September to December quarter (a whole 2 months ago) and that quarter followed straight after the biggest financial shock the world has ever witnessed when 3 out of 5 major, major banks collapsed.
Look at how the rest of the world has fared:
U.S: - 1.6%
U.K: - 1.5%
Japan: - 3.3%
Germany: - 1.6%
Taiwan: - 6.1%
Canada: - 0.8%
Switzerland: - 0.3%
And us: - 0.5%
For us, this was the 1st negative growth quarter in over 7 years, so do we look like following the rest of the world down Recession Avenue? Well according to those that know, a recession is declared after two successive quarters of negative growth…..our last GDP was slightly positive…
My good friend James McMurtrie has pointed out today that the Baltic Dry Index (which indirectly measures global supply and demand for commodities) has managed to hold onto it’s recent gains, and it wasn’t until late December 2008 that it started to trend upwards again…
As James has pointed out, the GDP is a late indicator, whereas the Baltic Dry Index is a leading one….
For us in the land of Oz, let’s just see how the 1st Aussie stimulus package affects our next quarter.
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