Natural disasters cause Australia’s economy to shrink

BOB MOON: Australia’s economy is acting like its 1991. The economy there just suffered its biggest quarterly fall in 20 years. The government is blaming natural disasters. The report also raises red flags about the global recovery.

The BBC’s Phil Mercer has more from Sydney.

PHIL MERCER: Australia makes a lot of money from exports — selling goods to countries around the region and the globe. But earthquakes in two of Australia’s key export markets — Japan and New Zealand — meant companies in those countries bought less stuff. Plus, floods and storms that roared through parts of Australia, slowed economic growth by disrupting coal production and sales.

Australia’s Treasurer Wayne Swan says the figures aren’t surprising.

WAYNE SWAN: And I think, as everybody is aware these were unprecedented in Australia’s history and, of course, in economic and social terms they were very costly.

But the economic slowdown isn’t just about natural disasters. Australia is often seen as a good indicator of world economic health because it is so reliant on natural resources and trade.

Australia’s GDP figures reveal slowing demand from Chinese manufacturers.

For Marketplace, I’m the BBC’s Phil Mercer in Sydney.