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Has it really been 26 years without a recession in Australia? Or is it only two?

By Tim Farrelly, Principal – Farrelly’s Investment Strategy (reproduced with permission)

How long is it since Australia had a recession? Most would say 26 years. That’s close to a world record!

But, there are different ways of determining when we are in recession. In Australia, we use the simplest benchmark – a recession is when we have had two consecutive quarters of negative real GDP growth. In the US, a more complex process is used where a committee of economists consider a range of data before declaring – normally six months after the fact – whether or not the country is in recession.

The best way to do it isn’t clear, but I am pretty sure that by looking at the data a little differently, we may not be so sure that Australia has gone 26 years without a hiccup.

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