Australia’s epic run without a recession is at risk after its economy shrank in the latest quarter.
The country’s GDP contracted 0.5% in the three months through September, according to official data published Wednesday.
The unexpectedly poor result is Australia’s first quarterly dip in more than five years. But its streak of a quarter century without a recession — defined as two consecutive quarters of contraction — remains intact for now.
Australian Treasurer Scott Morrison called the disappointing data a “wake-up call,” but he but refused to speculate whether a recession might be around the corner.
“You will find out in three months,” Morrison told reporters Wednesday, adding that “there are a lot of things to be positive about.”
Analysts said a drop in construction activity, low commodity prices and political uncertainty were responsible for the poor numbers.
The last time Australia had a recession was in the second half of 1991. No other advanced economy has managed to avoid one over the same period, according to International Monetary Fund data.
Commonwealth Bank of Australia’s Chief Economist Michael Blythe told CNNMoney that unusually bad weather had hampered construction, while a close and divisive election in July hurt confidence among consumers and businesses.
But he said he thought Australia was likely to avoid a recession thanks to a rise in commodity prices and increased infrastructure spending.
Stephen Koukoulas, managing director of Sydney-based consultancy Market Economics, agreed that Australia’s economy has the resilience to bounce back.
“Most recessions are caused by a policy change, fiscal austerity or a global shock, and we don’t have any of those right now,” he told CNNMoney. “I think we’ll see something of a rebound in the December quarter.”