Looking at the recent GDP data, it has been confirmed that we are heading straight to recession. Ever since the economic crisis hit, the environment around us has turned negative. Everyone thinks, looks and acts in a negative way. This time round, we should turn this negative news into something positive. So now, we have a fall in GDP, what so good about it?
1. Comparing to the past few decades, we going to save more money.
The household saving ratio (household savings measured against net disposable income) rose from 3.4% to an 18 year high of 8.5% in the December quarter
2. In the December quarter, the private sector were actually spending.
Private spending grew by 0.2% in the December quarter, proving individuals and businesses are still investing. But government spending surprisingly went backwards by 0.3%, dragging the GDP figure into the red.
3. Companies are being serious and sensible, cutting back inventories
Firms were aggressive in ridding their shelves of unwanted stock amid expectations of economic conditions getting much worse.
4. Compared to many countries, Australia is doing better than everyone else
Australia’s GDP growth slipped to -0.5% in the December quarter. But compare that with Japan (3.3%), the US(-1.1%), Korea (-5.6%), Thailand (-6.1%), Singapore (-4.2%) and Britain (1.9%)
Last and not least, although we are unsure when the recession will end, or if we have hit the bottom. There is always a light at the end of tunnel. Each day we are a step closer to recovery.
Source: Smart Company