Australia's recession is officially OVER as the economy grows 3.3% - but some things could still get harder

Australia has emerged from the coronavirus recession with the economy expanding by 3.3 per cent in the September quarter - the strongest three-month growth pace in 44 years.

The surge in Australia's gross domestic product occurred even though Melbourne, Australia's second biggest city and a fifth of the national economy, was placed into a strict, Stage Four lockdown from August 2 until October 28.

The coronavirus shutdowns and the summer bushfires had caused Australia to sink into recession for the first time since 1991.

The seven per cent plunge during the June quarter was the worst in Australian Bureau of Statistics records going back to 1959, and followed a 0.3 per cent decline during the March quarter.

The worst is now over, with the 3.3 per cent growth pace during the September quarter the strongest three-month expansion since the March quarter of 1976, when Malcolm Fraser was a new Liberal prime minister following the controversial November 1975 dismissal of his Labor predecessor Gough Whitlam.

Australia has emerged from the coronavirus recession with the economy expanding by a much stronger-than-average 3.3 per cent in the September quarter - the strongest expansion since the March quarter of 1976. Pictured are diners in Melbourne in early November after lockdown

The 4.4 per cent quarterly growth pace 44 years ago also followed a recession - in that case a constitutional crisis.

Treasurer Josh Frydenberg declared a recovery was underway. 

'The Australian economy is coming back,' he said.

Ahead of that release, Reserve Bank of Australia governor Philip Lowe told a parliamentary hearing wages growth was likely to remain weak with unemployment  standing at seven per cent in October - up from 5.1 per cent as recently as February. 

'In each of the next two years, we are expecting annual wages growth of less than two per cent,' he said.

The good news on the national accounts was released a day after trade data showed Australia's current account surplus - where exports exceed imports - had dived by 39 per cent during the September quarter.

The surge in Australia's gross domestic product occurred even though Melbourne, Australia's second biggest city and a fifth of the national economy, was placed into a strict, Stage Four lockdown from early August until late October. Pictured is Melbourne's Chadstone Apple store in November 2020

Australia's status as a net exporter is under threat following a series of punitive tariffs from China, Australia's biggest trading partner.

Last week, Australian wine exports were slapped with a 200 per cent tariff on top of the 80 per cent import taxes levied on Australian barley exports in May. 

On the domestic economic front, Victoria was the only state economy to shrink, with activity falling by one per cent during the September quarter as a result of the Covid lockdowns. 

New South Wales and Queensland each had the strongest economic expansion of 6.8 per cent. 

The worst is now over, with the 3.3 per cent growth pace during the September quarter the strongest three-month expansion since the March quarter of 1976, when Malcolm Fraser was a new Liberal prime minister following the controversial November 1975 dismissal of his Labor predecessor Gough Whitlam

The good news did little to excite financial markets with the Australian dollar flat at 73.75 US cents and the Australian share markets benchmark S&P/ASX200 also flat at 6,587.5 points. 

On an annual basis, Australia's economy is set to shrink by 3.6 per cent in 2020. 

The OECD is expecting Australia's economy to shrink by 3.8 per cent this year.

Official GDP data for the December quarter isn't being released until March 3, 2021. 

The data for the September quarter covered the period before the Reserve Bank of Australia in November cut interest rates, by 0.15 percentage points, to a new record-low of 0.1 per cent.