The Impact of COVID-19 on Australian Economy

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Tuesday, October 26, 2021 / 11:00AM /By Globex Marketing/Image Header Credit: iStock

 

Australia is in recession, and it is one of the more serious economic declines the nation has witnessed, especially in response to the virus and the consequential stay-at-home orders. In the first half of the pandemic year 2021, the economy had shrunk by 7%. Statistically, this decline is way worse than the initial decline of 3%. 

 

With the shutdown of many global companies, people were given the sack, leading to financial strains. Subsequently, households couldn't spend as before the pandemic, so they didn't. The painful impact of the pandemic didn't confine to households alone, and it impacted everything, including air travel, transport, accommodation, hospitality, and general tourism.

 


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The Worst Recession in Australian History  

Looking back, we see that the recession was simply inevitable from the time the Australian nation went into lockdown. Resultantly, nearly three decades of financial growth have come to an end. The gravity of the pandemic isn't lost on any aspect of life in Australia, including the parliament. 

 

Shuttered shops, empty streets, and the ghostly quiet airports signified the magnitude of the shocking pandemic catastrophe. Australia's consecutive record of 28 years of financial growth fell off the cliff. The 7% decline in the first half of 2020 marked the first recession since the year 1991. 

 

The pandemic prompted a sense of uncertainty, causing people to feel scared to spend and go bankrupt. Many found some solace in unsecured loans; however, others kept looking for the possibility of turning things around. 

 

Statistically, the recession in Australia following the Second World War hasn't been as severe as the recession caused by the pandemic. The pandemic instilled a climate of fear that even made governments too afraid to ask the value and worth of life. Like other nations, Australis also faced the challenge of balancing life and livelihood. 

 

A Deliberate Move to Save?

The one thing that is quite interesting about this recession is that it had been rather caused deliberately by a nation who was too afraid to spend, thinking that they would fall through the cracks. One may also think of it as financial self-harm deliberately designed to prevent an even bigger financial and health calamity.

 

It is important to mention here that the pandemic caused fewer deaths per million in Australia than in other regions of the world, such as the USA. However, the nations that lost more lives to the pandemic also reportedly suffered worse financially. 

 

While it looks like the Australian recession was something utterly unavoidable, the Australian government is now facing the challenge of smooth financial recovery, whether it calls for income tax cuts or the quick tracking of infrastructure. 

 

Many Australians were unwilling to open their wallets and spend on things like they once used to do. With many lost jobs, people were forced to switch their careers altogether, which further instilled the fear of uncertainty. The massive fall in income caused entire family units to struggle and go into a panic mode. With industries and businesses shutting down, household spending decreased significantly, leading to the ultimate recession. 





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