Australia’s economic growth at 26 year low

AUSTRALIA’S economy is set to keep contracting to a recession, with the rate of growth at a 26-year low in a leading survey.

The Westpac/Melbourne Institute leading index, which signals the likely pace of economic activity three to nine months in the future, shrank by 5.1 per cent in February.

It was the lowest rate of annualised growth since September 1982.

February’s result compared to a downwardly revised fall of 4.8 per cent in January and a February annualised growth rate of 0.7 per cent.

Westpac chief economist Bill Evans said the deterioration of the growth rate of the leading index was “truly remarkable” and  that “for some months the index has been signalling that the Australian economy will enter a recession,”.

“The consistent run of negative reads for the growth is comparable with Australia’s previous recessions which began in 1961, 1974, 1982 and 1990.”

“During that earlier recession the low point for the Australian economy was 1991 when the economy contracted by 1.3 per cent. Westpac is currently forecasting that the Australian economy will contract by one per cent in 2009 which we expect to be the low point of the cycle.”

news.com.au article excerpts