Australia's Economy
Nearly Thirty Years Without a Recession
How Australia avoided recession from 1991 until the 2020 pandemic, one of the longest expansions in history, and the factors that helped.
Australia went nearly 29 years without a recession, from 1991 to 2020.
How long
This was one of the longest economic expansions recorded among advanced economies.
Why
- Reforms in the 1980s-90s made the economy flexible.
- A floating exchange rate absorbed shocks.
- Inflation targeting by the Reserve Bank from 1993.
- China’s demand for resources, especially during the 2000s mining boom.
- Population growth from immigration.
- Quick stimulus in 2008-09: cash payments and infrastructure spending.
2008 crisis
Australia avoided recession during the global financial crisis, partly due to fast fiscal stimulus and China’s own stimulus.
The end
The streak ended with the COVID-19 recession in 2020.
Caveat
Growth per person was weaker in some periods, as population growth boosted total GDP.
In 2009, many Australians received a one-off cash bonus from the government, which they spent, helping keep the economy out of recession.
Australia avoided recession for nearly 29 years.
- Australia avoided recession from 1991 to 2020.
- Reforms, a floating currency and inflation targeting helped.
- China's demand and fast stimulus mattered.
- COVID-19 ended the streak in 2020.
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