Australia has recorded its largest fall in productivity on record with concern rising wages could push prices up further, leading to a potential recession. Subscribe and 🔔: | Get more breaking news at 9News.com.au:

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Recession fears have heightened in Australia as the country witnesses its largest productivity drop in history. The latest data released by the Australian Bureau of Statistics (ABS) has raised concerns about the state of the economy, which is reeling under the pressure of the ongoing COVID-19 pandemic.

According to a report by 9 News Australia, the country’s productivity fell by a staggering 9.8% in the June quarter, marking the largest decline since record-keeping began in 1959. This significant drop has sent shockwaves throughout the nation and has put policymakers and economists on high alert.

The decline in productivity can be attributed to several factors, primarily the impact of strict lockdown measures that were implemented to contain the spread of the virus. The closure of non-essential businesses and various sectors experiencing a significant slowdown has severely disrupted the normal functioning of the economy. This disruption has inevitably resulted in a decline in output and productivity levels.

The Australian economy heavily relies on sectors such as hospitality, tourism, and education, all of which have been severely affected by the pandemic. These sectors have seen a sharp decline in demand, as international travel restrictions and social distancing measures have limited activity and spending. As a result, businesses in these industries have been forced to reduce their workforce or shut down entirely, leading to massive job losses and reduced productivity.

The country’s already fragile economy has now been dealt a severe blow due to the productivity decline. The potential consequences of this drop are far-reaching and often a precursor to a recession. With businesses struggling to stay afloat and limited government support, recession fears are now at an all-time high.

To combat this economic downturn, the Australian government has implemented various stimulus measures, including the JobKeeper payment scheme, which provides financial support to businesses to retain employees. However, with the country battling a second wave of COVID-19 infections in Victoria, coupled with uncertainties surrounding the global economy, these measures might not be sufficient to revive productivity levels.

Economists and experts are now urging the government to take further action and provide additional support to help businesses survive and recover from the crisis. They believe that targeted fiscal stimulus and increased investment in infrastructure projects could help boost productivity and create more job opportunities.

As Australia grapples with the worst productivity decline on record, it is apparent that the road to recovery will be long and arduous. The country’s resilience will be tested as it navigates through uncertain times, striving to rebuild its economy and safeguard the livelihoods of its citizens. Only time will tell whether Australia can overcome this productivity slump and prevent a full-blown recession.