1 Jun 2011

Australian economy suffers worst fall in 20 years

3:04 pm on 1 June 2011

Australia's Federal Treasurer Wayne Swan has blamed the summer's floods and cyclones for the biggest quarterly contraction in the economy for 20 years.

Gross domestic product fell by 1.2% in the March quarter.

The last time GDP contracted was in the December quarter of 2008 - at the height of the global financial crisis, AAP reports.

The fall announced on Wednesday is the worst result since the March quarter of 1991, when the economy shrank 1.3%.

Mr Swan says it demonstrates the major impact on the economy of extensive flooding and cyclone activity earlier in the year.

This weakness is likely to be followed by a strong rebound in the June quarter as the economic impacts of the disasters ease and reconstruction picks up, he says.