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Australian economy to suffer $80 billion hit

Christian Fernsby |
The International Monetary Fund (IMF) has warned that Australia will suffer its largest economic hit since the Great Depression in the wake of the coronavirus crisis.

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Topics: AUSTRALIA   

In its forecasts for the global economy, the IMF predicted that Australia's gross domestic product (GDP) would contract by 6.7 percent, or 130 billion Australian dollars (83.7 billion U.S. dollars), this year.

It would be the biggest hit to the Australian economy since 1930, when the economy is estimated to have contracted by about 9.5 percent amid the Great Depression, and would mark the end of 28 consecutive years of economic growth, according to local media.

"It is very likely that this year the global economy will experience its worst recession since the Great Depression, surpassing that seen during the global financial crisis a decade ago." the report said.

Australia's economy is expected to sustain a bigger blow than that of countries that have been hit harder by COVID-19.

However, the Australian economy is expected to grow by 6.1 percent in 2021.

The IMF report said that Australian unemployment would average 7.6 percent in 2020 before increasing to 8.9 percent in 2021.

Responding to the report, Treasurer Josh Frydenberg said Australia was in a better position to cope with the economic impacts of the virus.

"Australia approaches this crisis from a position of economic strength," he said in a media release on Wednesday.

"Our measures are temporary, targeted and proportionate to the challenge we face and will ensure Australia bounces back stronger on the other side."

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