The Australian Bureau of Statistics (ABS) released the March qtr figures and Australia is now the only industrialised country in the world not to be in recession.

The Australian GDP increased by 0.4% in the March quarter, meaning that Australia has avoided a recession. The December quarter results had shown a contraction with the economy shrinking by 0.6 per cent, which had led to concerns that Australia could fall into recession. The technical description of a recession is defined as two consecutive quarters of economic contraction.

According to the ABS, the main positive contributors to expenditure on GDP were - Imports (1.6 percentage points), Exports (0.6 percentage points) and Household final consumption expenditure (0.3 percentage points).

There was expectation in financial markets ahead of the numbers that the economy would have escaped a recession after a surge in exports last quarter. The weaker Aussie dollar played a key role in boosting the competiveness of Australian Exports in the global market.

The Rudd Government is likely to be given credit for stimulating the Australian economy. Household consumption expenditure figures showed positive growth and it is expected that the government’s $10billion fiscal stimulus package assisted in this growth.

The Reserve Bank of Australia also played a key role in preventing a recession, after slashing interest rates by a total of 425 basis points to 3 per cent over the last three quarters. It is possible that there will be further reductions in rates.

These results will make the outlook for Australia much more positive for the rest of the year. CommSec equities economist Savanth Sebastian said there was now the chance that the economic recovery could occur and be more rapid than had been expected ahead of these figures.

The financial markets have already reacted positively with the Australian dollar rising to US82.27 cents from US81.85c.

This is a great indication of the stability of the Australian economy when other countries such as US, Canada, Ireland the UK are all officially in recession.