Coronavirus: Australia and Brazil enter recession

A woman walks past an empty commercial space in Sydney, Australia on September 2, 2020 (illustrative image).

AP Photo / Rick Rycroft

Text by: RFI Follow

3 min

Australia entered recession for the first time since 1991 after seeing its GDP shrink 7% in the second quarter due to the coronavirus outbreak, official figures showed on Wednesday.

The day before, Brazil announced a record drop in its GDP of 9.7%.

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With a 7% drop in its GDP, it is the sharpest quarterly contraction ever suffered by the Australian economy, whose extraordinary growth was not even interrupted by the global financial crisis of 2008, a the Australian Bureau of Statistics (ABS) clarified.

Michael Smedes, senior official at ABS, explained that the pandemic and the measures taken to fight the coronavirus were responsible for this "

" contraction 

 which "

 "

sinks 

previous records.

A country goes into recession when it lines up two negative quarters, and Australia's GDP had fallen 0.3% between January and March.

Brazil also hard hit

On Tuesday, September 1, Brazil also announced that it had fallen back into recession in the second quarter of the year, with a historic drop in GDP of nearly 10%.

It was in the second trimester that the effects of the coronavirus pandemic were felt most.

Economic activity fell 9.7% from the previous quarter, and 11.4% from the second quarter of last year, reports our correspondent in Sao Paulo,

.

The social impact is enormous.

Half of the working population is outside the labor market.

To cushion the shock, the government has put in place emergency aid for some 60 million people, or 30% of the population.

In particular, this has helped the poor and supported consumption.

At first, the aid amounted to just over $ 100.

It has just been halved, but it will be paid until the end of the year.

Brazilian economic officials assure that the country has now passed the bottom of the wave, and will be able to limit the damage by the end of the year, before resuming the path of growth from 2021.

(With agencies)

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