Great Recession in Oceania

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The Great Recession in Oceania was the great recession of the late 2000s and early 2010s in Oceania. The Oceanic countries suffered minimal impact during this time, in comparison with the impact that North America and Europe felt.

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Australia

Australia is one of the three Organisation for Economic Co-operation and Development (OECD) countries that did not experience two consecutive negative quarters of growth and one of the two that avoided negative year-end GDP growth during the global recession. [1] It was not affected by the crisis from 2008 to 2009 due to a number of factors such as government stimulus spending; its proximity to the booming Chinese economy and the related mining boom kept growth ticking over throughout the worst of the global conditions. In fact, sources such as the IMF and the Reserve Bank of Australia had predicted Australia was well positioned to weather the crisis with minimal disruption, sustaining more than 2% GDP growth in 2009 (as many Western nations went into recession). In the same year, the World Economic Forum ranked Australia's banking system the fourth best in the world, while the Australian dollar's 30% drop was seen as a boon for trade, shielding the country from the crisis and helping to slow growth and consumption. Australia's recession affected New Zealand's economy as Australia was New Zealand's biggest export market. [2] [3] It is said that the term Great Recession as a description of the post-2008 slump is not recognized by Australians particularly those under 30 due to its mild, intangible impact on the country's economy. [4]

Some analysts had predicted the continuing decline of trade in 2009 could put the economy into recession for the first time in 17 years. [5] However, these initial fears were proved largely unfounded as the Australian economy avoided recession and the unemployment rate peaked at a much lower rate than had been predicted. To help address the anticipated slowdown, the Australian government also announced a stimulus package worth $27 billion to spur economic growth while the Reserve Bank of Australia introduced a series of interest rate cuts. [6]

New Zealand

The New Zealand Treasury defines "recession" as "consecutive falls in real GDP." The department said that New Zealand's real GDP fell 3.3% between the December 2007 quarter and the March 2008 quarter, and that this start, before any other OECD nation, was the result of domestic factors. It said that New Zealand's recession was among the first to finish and was one of the shallowest. [7] New Zealand Institute of Economic Research's quarterly survey showed New Zealand's economy contracted 0.3 percent in the first quarter of 2008.

There was a substantial number of finance company collapses between 2006 and 2012. Housing starts in New Zealand fell 20 percent in June 2008, the lowest levels since 1986. [8] Excluding apartments, approvals dropped 13 percent from May. Approvals in the year ended June fell 12 percent from a year earlier. Second-quarter approvals dropped 19 percent. The figures suggested a decrease in construction and economic growth. House sales fell 42 percent in June from a year earlier. [9]

The New Zealand Treasury concluded that the country's economy had contracted for a second quarter based on economic indicators, putting New Zealand in a recession. [10] New Zealand's central bank cut rates by half a percent arguing the economy was in recession. [11] New Zealand's GDP declined by 0.2 percent in the second quarter putting the country in its first recession in a decade. [12]

The economy emerged from recession in mid-2009, with the second-quarter GDP report showing the economy grew by 0.1 per cent on the March quarter. [13]

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In economics, a recession is a business cycle contraction that occurs when there is a general decline in economic activity. Recessions generally occur when there is a widespread drop in spending. This may be triggered by various events, such as a financial crisis, an external trade shock, an adverse supply shock, the bursting of an economic bubble, or a large-scale anthropogenic or natural disaster.

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<span class="mw-page-title-main">Great Recession</span> Global economic decline from 2007 to 2009

The Great Recession was a period of marked general decline observed in national economies globally, i.e. a recession, that occurred in the late 2000s. The scale and timing of the recession varied from country to country. At the time, the International Monetary Fund (IMF) concluded that it was the most severe economic and financial meltdown since the Great Depression. One result was a serious disruption of normal international relations.

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References

  1. ↑ Braude, Jacob; Eckstein, Zvi; Fischer, Stanley; Flug, Karnit (2013). The Great Recession: Lessons for Central Bankers. Cambridge, MA: MIT Press. p. 245. ISBN   9780262018340.
  2. ↑ Stutchbury, Michael (2008-10-11). "Calls for international community to flush the system". The Australian.
  3. ↑ Yeates, Clancy (2008-10-11). "The fall of the little Aussie battler". The Sydney Morning Herald.
  4. ↑ Bryant, Nick (2015). The Rise and Fall of Australia. Sydney: Random House Australia. p. 3. ISBN   9780857989024.
  5. ↑ Australia seen sliding into recession in 2009, International Herald Tribune, January 19, 2009
  6. ↑ Rosenberg, Jerry (2012). The Concise Encyclopedia of The Great Recession 2007-2012. Lanham, MD: Scarecrow Press. pp.  32. ISBN   9780810883406.
  7. ↑ "Special Topic: Recession and recovery in the OECD". NZ Treasury – treasury.govt.nz. Retrieved 29 July 2017.
  8. ↑ Evans-Pritchard, Ambrose (2008-07-29). "Australia faces worse crisis than America". London: Daily Telegraph. Archived from the original on 2008-07-31. Retrieved 2008-07-30.
  9. ↑ "New Zealand Building Approvals Fall to 22-Year Low". Bloomberg. 2008-07-29. Retrieved 2008-08-10.
  10. ↑ "New Zealand 'enters recession'". BBC News. 2008-08-05. Retrieved 2008-08-10.
  11. ↑ "New Zealand slashes rates as economy lurches toward recession". London: Daily Telegraph. 2008-09-11. Retrieved 2008-09-12.[ dead link ]
  12. ↑ "New Zealand Economy Shrank 0.2%, Confirming Recession". Bloomberg. 2008-09-26. Retrieved 2008-09-26.
  13. ↑ Louisson, Simon (2009-09-24). "New Zealand's economy grew 0.1% in second quarter". The Wall Street Journal Asia. Vol. 34, no. 18. p. 14. Retrieved 2009-11-17.
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