Australia in recession, confirms RBA boss

Reserve Bank of Australia governor Glenn Stevens says it is \’clear\’ that the country is now in recession.

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“I think the reasonable person, looking at all the information available now, would come to the conclusion that the Australian economy, too, is in recession,” Stevens said.

He said the situation was apparent, “whether or not the next GDP (gross domestic product) statistic, due in early June, shows another decline”.

The governor said confidence was the key to recovery, and that it was up to policy makers to foster and not erode it.

“It is such confidence that, more than anything else, will help to drive us along the road to recovery,” he said.

Public finances in \’very sound\’ shape

Stevens said the country\’s political stability remained assured, the federal government had not been forced to give direct financial support to the banking system, and that public finances remained in “very sound” shape.

“Sensible policy frameworks – both macroeconomic and microeconomic – remain in place; the financial regulatory system is strong and tested,” he said.

“We remain open for trade and investment, and have the capacity to deploy both our own and other people\’s capital carefully and profitably.

“There is an exposure to, and engagement with, an Asian region that still has the most dynamic growth potential in the world, where hundreds of millions of people will for decades to come be seeking rising living standards.

In a speech to the Australian Institute of Company Directors in Adelaide on Tuesday, Stevens said the recession would be the eighth Australia has faced since the Second World War.