SYDNEY (Reuters) - Australia’s government said on Thursday it would pump A$17.6 billion (£8.88 billion) into the economy to prevent the coronavirus outbreak pushing the country into its first recession in nearly 30 years.
The package wipes out a long-promised budget surplus with money amounting to 1.2% of GDP to be pumped into the health system, small businesses, and support for casual workers and households.
“Both this financial year and in the next two financial years, the gross impact of that stimulus is A$22.9 billion ($14.8 billion). That’s 1.2% of GDP,” Prime Minister Scott Morrison told reporters in Canberra.
Ratings agency S&P said on Wednesday it expected Australia to fall into recession in the first half of 2020, but the government’s strong fiscal position allowed for stimulus without threatening its ‘AAA’ credit rating.
Australia had 112 virus infections as of Wednesday, up from 100 the previous day, with three deaths, health officials said.
Reporting by Renju Jose in Sydney; Editing by Stephen Coates