Economy could already be in recession over lockdowns

Leading economists say the lockdowns in Sydney and Melbourne have plunged Australia’s economy back into recession.

The verdict comes as the government ruled out a reintroduction of last year’s JobKeeper program which kept workers attached to their employers.

Independent economist Warren Hogan said the traditional definition of a recession – two consecutive quarters with negative growth – is “antiquated” and does not apply during the COVID-19 pandemic.

“The New South Wales economy is probably going to contract about five per cent in Q3, which is second only to last year’s contraction in terms of historical magnitude,” he said.

“That’ll drag the overall Australian economy down by somewhere between one and three per cent.”