Australian Prime Minister Kevin Rudd said yesterday it was “virtually impossible” for Australia’s economy to grow in the current climate, all but conceding a recession is looming.
The economy shrank for the first time since 2001 in the final quarter of last year and a similar outcome in the first three months of this year would put Australia in recession — defined as two straight quarters of contraction.
Rudd said he did not see how Australia’s economy could grow amid a global recession that “is getting worse before it gets better.”
“It’s clear that the impact of a worsening economic global recession will make it virtually impossible for Australia to sustain a positive economic growth for the period ahead,” Rudd told Channel Nine television.
Australia enjoyed eight years of strong growth, largely due to a China-driven resource boom, but demand for Australian commodities has collapsed as waning demand means exporting countries need less raw materials.
Unemployment in Australia recently hit a four-year high of 5.2 percent and Rudd said the global downturn would hurt the labor market “just as night follows day,” although he refused to say how high he believed it would climb.
“If the global economy is shrinking and global trade is shrinking for the first time in a quarter or a century, then it’s going to have roll-on consequences for our growth, our jobs and our budget,” he said.
Rudd’s center-left Labor government has implemented two stimulus packages worth more than A$50 billion (US$33 billion) to try to cushion the economy and the prime minister refused to rule out further packages.
“We reserve the right to take whatever further action is necessary to continue to support the economy and jobs,” he said.
Most economists believe Australia is already in recession and only needs to await the release of official first quarter growth figures in a few months to confirm the fact.
PROTECTIONISM: China hopes to help domestic chipmakers gain more market share while preparing local tech companies for the possibility of more US sanctions Beijing is stepping up pressure on Chinese companies to buy locally produced artificial intelligence (AI) chips instead of Nvidia Corp products, part of the nation’s effort to expand its semiconductor industry and counter US sanctions. Chinese regulators have been discouraging companies from purchasing Nvidia’s H20 chips, which are used to develop and run AI models, sources familiar with the matter said. The policy has taken the form of guidance rather than an outright ban, as Beijing wants to avoid handicapping its own AI start-ups and escalating tensions with the US, said the sources, who asked not to be identified because the
FALLING BEHIND: Samsung shares have declined more than 20 percent this year, as the world’s largest chipmaker struggles in key markets and plays catch-up to rival SK Hynix Samsung Electronics Co is laying off workers in Southeast Asia, Australia and New Zealand as part of a plan to reduce its global headcount by thousands of jobs, sources familiar with the situation said. The layoffs could affect about 10 percent of its workforces in those markets, although the numbers for each subsidiary might vary, said one of the sources, who asked not to be named because the matter is private. Job cuts are planned for other overseas subsidiaries and could reach 10 percent in certain markets, the source said. The South Korean company has about 147,000 in staff overseas, more than half
Taipei is today suspending its US$2.5 trillion stock market as Super Typhoon Krathon approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed-income trading, statements from its stock and currency exchanges said. Yesterday, schools and offices were closed in several cities and counties in southern and eastern Taiwan, including in the key industrial port city of Kaohsiung. Taiwan, which started canceling flights, ship sailings and some train services earlier this week, has wind and rain advisories in place for much of the island. It regularly experiences typhoons, and in July shut offices and schools as
CHEMICAL FIRE: 10 Indian employees were injured by smoke inhalation at a Tata Electronics plant in Tamil Nadu state that produces components for Apple Inc At least 10 people received medical treatment, with two hospitalized after a major fire on Saturday disrupted production at a key Tata Electronics Pvt Ltd plant in southern India that makes Apple Inc’s iPhone components. The fire occurred at the plant in the city of Hosur in Tamil Nadu state that makes some iPhone components. It broke out near another building inside the Tata complex, which was to begin producing complete iPhones in the coming months. The fire was contained to one building and has been extinguished fully, top district administrative official K.M. Sarayu said. No decision has been made on when
RSS