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Economy records worst performance since the GFC

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The economy shrank in the September quarter to post its worst performance since the 2008-2009 global financial crisis.

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The national accounts showed economic growth declined 0.5 per cent in the quarter, dragging the annual growth rate down to 1.8 per cent.

Annual growth in the June quarter was previously reported at 3.3 per cent before revisions.

It was the first contraction in growth since March 2011.

Treasurer Scott Morrison used the data to demand support for the government’s economic plans.

The figures were not just a reminder or a wake-up call about being complacent, but rather a “demand to support economic policies that drive the investment needed to support job security”, Morrison told reporters in Canberra.

Earlier, Prime Minister Malcolm Turnbull insisted his government was doing all it could to promote growth in the face of big global headwinds.

“We have sluggish growth across the world at the moment and that is one of the reasons why everything we do, every element of our policy has to promote economic growth,” he told reporters in Sydney.

The Reserve Bank left the cash rate unchanged at a record low 1.5 per cent at its final board meeting of the year on Tuesday.

Central bank governor Philip Lowe anticipated some slowing in economic growth by year-end “before it picks up again”, pointing to a future pick-up in exports as completed resource projects come on line.

Treasury will use the national accounts to form its forecasts for the mid-year budget review, which Morrison will hand down on December 19.

– AAP

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