ibnlive » Business

Nov 19, 2008 at 01:56pm IST

Recession may hit Australia's 17 years of gro

Sydney: Australia's leading economic index fell in September, a sign that the nation should brace up for a recession that will end 17 straight years of growth.

The Westpac Bank-Melbourne Institute index, a measure of future economic growth shrank to 1.1 per cent from 3.5 per cent in August as consumers cut spending.

This was the biggest drop in more than 20 years.

Economists now fear negative growth. The country's central bank has already cut key interest rate by two percentage points to 5.25 per cent to boost growth.

A further rate cut is expected on December 2.

The bank lowered its 2008 growth forecast last week to 1.5 per cent as the global financial turmoil gripped Australia.

Australia has already announced a 10.4 billion Australian dollar grant to pensioners, families and first home buyers to prop up the economy.

Previous Comments