Australia’s economy has just done something that no advanced economy bar the Netherlands has ever done in the modern era — expand continuously for a quarter of a century.
Following a 0.5% increase in real GDP in Q2, it took Australia’s run without experiencing a technical recession — defined as two consecutive quarters of negative economic growth — to 100 quarters.
This is shown in the chart below. The last time Australia experienced a recession was the first half of 1991.
While GDP is a backward-looking indicator of how the economy has performed, the view in the rear view mirror certainly looks alright.
Though there’s always debate about the GDP figure — it’s dated, the composition isn’t great and it doesn’t take into account other factors such as population growth, just to name three — given the track record of other advanced economies over the same period, it’s an impressive, and near unprecedented, run of uninterrupted economic growth.
Australia is now closing in on Netherlands’ record of 103 quarters of consecutive growth, a run that came to a shuddering end during the global financial crisis in late 2008.
Let’s hope that’s not an omen.