Avoiding lockdown key to avoiding recession in Tasmania: Saul Eslake | Examiner

news, local news, Tasmania, economy, growth, recession, coronavirus, Saul Eslake, Jeremy Rockliff, final demand status

Tasmania should be able to dodge a recession if it can avoid coronavirus lockdowns. This is the view of economist Saul Eslake, who said that the state’s final demand figures for the June quarter released by the Australian Bureau of Statistics showed “a pretty good picture” of the Tasmanian economy. “We don’t run the nation, as is sometimes claimed, but we are doing fine,” Mr. Eslake said. “If we can avoid the bottlenecks here, we should be able to avoid the recessions which by my definition are currently plaguing New South Wales and Victoria.” A recession is often defined as two consecutive quarters of negative economic growth. Mr Eslake said he thought this definition was stupid and lazy. He preferred to define a recession as when the unemployment rate rose 1.5 percentage points or more in 12 months or less. He calculated that the national effective unemployment rate fell from 5.7 percent in May to 7.3 percent in June and 8 percent in July. “So by this calculation, the Australian economy is now in a recession whether or not we have two consecutive quarters of negative real GDP growth,” he said. The ABS calculated GDP (gross domestic product) grew 0.7 percent in the June quarter. Final demand for the state of Tasmania – which measures household, business and government spending with a few exceptions – rose 1.4% in the June quarter. Mr Eslake said it was 13.1% above the state’s final demand in the June quarter of last year and 3.5% above its pre-market peak. recession in the September quarter of 2019. In mid-2020, the pandemic and responses to it caused the state’s economy to collapse. and threw thousands of Tasmanians out of work. The ABS estimated that Tasmanian household consumer spending rose 0.9% in the June quarter, due to additional spending on furniture, household equipment and vehicles. Tasmania’s consumer spending from all three levels of government rose 1.2%. Acting Prime Minister Jeremy Rockliff said the state’s annual final demand growth of 13.1% was the second highest growth rate among states. “Our companies are confident, investing and hiring, there are more Tasmanians at work than before the pandemic and 28,400 jobs have been created since we took office in 2014,” he said.

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