Talk of recession as Australia takes world record

Past federal treasurers from both sides of politics have praised the economic growth miracle that will see Australia move to the top of the league table next week, cementing its reputation as the world's most blessed economy.

And the achievement has even prompted a degree of political bipartisanship, with the former foes acknowledging each other's economic policy contributions.

Official figures to be released on Wednesday are expected to show Australia has clocked up 103 consecutive quarters without a recession - an improvement on the record set by the Netherlands in the 26 years leading up to the global financial crisis. Continued growth over the following days will allow Australia to claim the mantle of the world's most resilient economy.

But that is not guaranteed, with speculation growth in the next set of national accounts could dip into negative territory, and that the subsequent quarter may also be dragged lower as the economic effects of Cyclone Debbie wash through the system.

A recession is usually defined as two consecutive quarters of negative economic growth.
The Wall Street Journal has hailed Australia's "miracle economy", noting that when Australia's record run began the first Gulf War had just ended, Boris Yeltsin was Russia's new president and Vanilla Ice was big on the charts.

In that same period, the United States has had two recessions: the so-called "tech-wreck" dot-com bust of 2001 and the global financial crisis of 2008-09. Much of East Asia went into recession during the Asian financial crisis in the late 1990s. Japan has has been in recession six times in the past 30 years.

Australia's world-leading position is the result of hard decisions made in the 1980s, 1990s and 2000s, including floating the dollar, decentralised wage fixing, independence for the Reserve Bank, and the dismantling of high import tariffs.

The recent decline in the index of fear or "VIX" also supports the growth of the risk-appetite on the markets. And AUD, as a risk currency is on the rise.

Jr Trader Alexander Kumanov

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