• Australia’s economy may have grown during the September quarter, RBA Deputy Governor Guy Debelle has told Senate Estimates.
• Speaking on Tuesday, Debelle said the central bank’s best guess at this point was of growth, marking a technical end to Australia’s recession.
• However, like the pandemic, Australia’s economic worries haven’t gone anywhere.
• Visit Business Insider Australia’s homepage for more stories.

It took Australia almost 30 years to enter a recession, but it may have only taken two quarters to exit it.

The Reserve Bank of Australia (RBA) has tentatively suggested the economy may have grown in the September quarter after shrinking during the first six months of the year.

“At the moment our best guess it looks like the economy probably recorded positive growth rather than negative,” Deputy Governor Guy Debelle told Senate Estimates on Tuesday.

It would suggest that Australia’s economy may be performing better than expected, despite 25% of it being shut down for months under Victoria’s stage four restrictions.

“As best as we can tell … the strength elsewhere in the country was more than the drag from Victoria, and possibly the drag from Victoria was a little less than what we had guessed,” Debelle said.

While it won’t be confirmed until early December, it does point to a fledgling economic recovery. Some projections had warned the recession could run into next year. Any and all forecasts evidently come with a grain of salt during the pandemic.

“We’re having a lot of trouble trying to understand where we are let alone where we’re going,” Debelle said.

Nor did the possible return to growth came cheap. The federal government took on a record-breaking level of debt in an attempt to give a jab in the arm to business and households. It’s expected to be helped along by a Victorian reopening that should see households eager to spend some of their pent-up savings as they blow off steam.

However, Debelle’s admission on Tuesday also does not mean that it’s clear sailing from here on out. For one, the record amount of government support offered since March will begin to wind back in the coming months, as JobKeeper is replaced by JobMaker, and the heightened JobSeeker payment is phased out.

For another, many of the pandemic’s biggest impacts loom just as large as before, such as the disappearance of one million people from Australia by 2030.

At the same time fiscal support falls, there’s little more room for the RBA to cut interest rates any further or meaningfully increase its other monetary efforts.

There are still plenty of reasons to think the economy is relatively weak. For one, there are nearly one million Australians unemployed. With a recession defined as two or more consecutive quarters of negative growth then, it may be little more than a semantic reprieve.

But at this point in the game, you take what you can get.

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