Australia holds world record for longest period of growth among developed economies
28 Nov 2018
Australia's economy grew by a stronger-than-expected 0.9% in seasonally adjusted terms over the June quarter 2018, according to the latest National Accounts figures recently released by the Australian Bureau of Statistics. This was only marginally down on the strong and upwardly revised 1.1% growth in Q1 2018.
The latest outcome is a positive sign that Australia’s economy is maintaining the solid momentum that has delivered Australia 27 years of uninterrupted annual economic growth.
More dramatically, Austrade estimates that Australia now holds the record for the longest period of recession-free growth for a developed economy.
Australia is the only country in the developed world with a period of uninterrupted economic growth of this length, based on the typically recognised definition of an economic recession being a decline in GDP for two or more consecutive quarters.
All 34 member countries in the Organisation for Economic Co operation and Development (OECD) have experienced at least one period of two consecutive quarters of negative GDP growth since 1991. Many of these economies experienced two episodes of negative growth during that period – one in 2001 following the collapse of the ‘dot.com bubble’; and one during the 2008 global financial crisis (GFC).
The period since 1991 is the longest growth phase Australia has recorded for at least the past 50 years. It has seen the economy register an average growth rate of 3.2% per annum.
The next longest period, during which Australia’s economic year-ended growth remained positive was between 1961 and 1971. In the 1970s and 1980s, Australia’s growth phases lasted only seven or eight years before another recession hit.
On a quarter-to-quarter basis, the June 2018 national accounts figure represented the 104th positive growth rate since the economy started to recover in Q3 1991, following the two consecutive negative growth rates in Q1 and Q2 1991.
By Austrade’s count, Australia’s consecutive quarters of positive growth have now exceeded all OECD member countries including the Netherlands (96 quarters between Q1 1982 to Q2 2008), Ireland (78 between Q3 1986 and Q1 2007), South Korea (77 since the Asian Financial Crisis in 1998) and Canada (68 between Q2 1991 and Q3 2008).
Australia’s economic resilience over the past two decade has been the envy of many countries. Australia sailed through the Asian economic crisis of 1997–98, prospered through the US stock market bust and recession of 2001 and continued to grow through the GFC of 2008–09.
Australia has managed to deliver a solid economic performance relative to other developed economies, while adjusting to the end of its mining boom of the 2000s.
The nation is expected to realise an average annual real GDP growth of 2.7% between 2019 and 2023, according to the IMF’s World Economic Outlook October 2018. The latest average growth rate over the next five years is the highest among major advanced economies and up from an average growth rate of 2.6% between 2014 and 2018.