5 Mar 2009

Australia on brink of recession

8:45 am on 5 March 2009

The Lucky Country is now on the brink of recession.

Australia has so far avoided the extent of the economic slump suffered here and in many other countries

But now official figures issued on Wednesday showed its economy has contracted for the first time in eight years. GDP fell 0.5% last quarter from the third quarter.

The definition of recession is two successive quarters of contraction in gross domestic product. The last time was in recession was in 1991.

National Australia Bank chief economist Alan Oster says it's bad, but it could have been worse.

The Reserve Bank of Australia held its interest rate at 3.25% on Tuesday. Another cut is now expected when the bank next considers the rate on 7 April.