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Australian Economy Set to Shrink Based on Treasury, RBA Estimates

  • Shock will be larger if supply chains disrupted, sentiment hit
  • Citi’s Williamson warns fiscal boost could be only 0.1% of GDP

Australia’s economy is likely to suffer a quarterly contraction for the first time in nine years, based on an initial estimate of the coronavirus’s impact from the nation’s Treasury and Reserve Bank.

Both told a parliamentary panel in separate hearings that they expect half a percentage point cut from gross domestic product in the first three months of the year. Treasury head Steven Kennedy said the effects may spill into the second quarter, but Treasury wasn’t forecasting a recession.