Australia’s economy is expected to contract by 2 per cent this year, according to new data from the Reserve Bank.
Photo: Andrew Meares The Reserve Bank said in a statement the economy contracted by 0.4 per cent in the June quarter.
That was lower than previously expected.
The Reserve’s new quarterly jobs report released on Friday showed employment fell by 20,000 to a seasonally adjusted annual rate of 1.9 million, a decline of 14,000 over the same quarter a year earlier.
But the unemployment rate was unchanged at 5.4%.
The Reserve said that while the economy was growing, “there remains scope for further downward pressure”.
It said the number of people working part-time in the economy has increased, which has added to the pressure on wages and unemployment.
The Australian Bureau of Statistics has also reported a surge in the number working part time in the past few months, with employers reporting more than 2.6 million full-time employees.
The economy grew by 1.4 million in the quarter.
The Reserve said the economy is recovering and has added a further 1.1 million jobs since the December quarter, which was the best monthly job growth in nine years.
But Mr Morrison said the Reserve was still expecting the economy to contract for the rest of this year and beyond.
“The economy is not only contracting, it’s also contracting faster than expected,” he said.
Labor said it was disappointed with the data.
“The Labor Government’s plan to keep the economy growing by 1 per cent a year over the next five years is a fantasy, not the reality,” Employment Minister Sam Dastyari said.
“This Government is not listening to the experts and it’s putting Australia’s future at risk.”
The economy has grown at its slowest rate since the 1980s, and the Reserve said it is “focusing on the long-term future of the economy”.
“This Government has a job-saving plan to increase jobs, support businesses and deliver prosperity to Australians for the long term,” Mr Dasty, who was elected in December, said in the statement.
Mr Morrison said he was looking forward to a recovery in the coming months, but said he did not believe the economy would be able to handle a major contraction.
He said there was a lot of good news for the future.
“(The Reserve’s) forecast of a 1.5 per cent contraction over the rest and a 0.5 to 1.6 per cent rise in the unemployment figures are good news.)”
But there are still plenty of issues that need to be addressed in the next year and that will be the focus of the next Federal Budget,” he added.
On Wednesday, Mr Morrison told the ABC he would not seek a second term as Prime Minister.
Topics:economy,government-and-politics,people,jobs,government—state-issues,government,industry,business-economics-and–finance,industries,australiaFirst posted January 06, 2020 13:04:13Contact Adrian DaleyMore stories from Victoria