The data comes as no surprise, with Reuters-polled economists correctly predicting the 0.3% fall in GDP.

The Australian Bureau of Statistics (ABS) revealed growth slowed to 1.4% for the year, and ABS Chief economist Bruce Hockman said it was the slowest growth in over a decade. 

“This was the slowest through-the-year growth since September 2009 when Australia was in the midst of the Global Financial Crisis and captures just the beginning of the expected economic effects of COVID-19," Mr Hockman said. 

With the next quarter certain to be negative, given it will reveal the full fallout from social distancing and economic hibernation due to the pandemic, Australia looks set to enter a recession.

Need somewhere to store cash and earn interest? The table below features introductory savings accounts with some of the highest interest rates on the market.

Provider

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  • Bonus rate for the first 4 months from account opening
  • No account keeping fees
  • No minimum balance
Disclosure

High Interest Savings Account (<$250k)

  • Bonus rate for the first 4 months from account opening
  • No account keeping fees
  • No minimum balance
Disclosure
4000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
  • A high-interest online savings account with no monthly fees, easy withdrawals and award-winning digital banking
  • No withdrawal notice periods or interest rate penalties
  • Save up to 10% on eGift cards at over 50 retailers with Macquarie Marketplace
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Macquarie Savings Account (<$250k)

  • A high-interest online savings account with no monthly fees, easy withdrawals and award-winning digital banking
  • No withdrawal notice periods or interest rate penalties
  • Save up to 10% on eGift cards at over 50 retailers with Macquarie Marketplace
Disclosure
400$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
  • Special offer: Savings Accelerator (Kick Starter offer).
  • For a limited time, new ING customers can get a bonus 0.70% p.a. on their savings rate on balances of $150,000 up to $500,000 for the first 4 months. T&Cs apply.
  • If your balance is over $500,000 (but less than $5 million) you will earn the ongoing variable rate of 4.7%
Disclosure

Savings Accelerator

  • Special offer: Savings Accelerator (Kick Starter offer).
  • For a limited time, new ING customers can get a bonus 0.70% p.a. on their savings rate on balances of $150,000 up to $500,000 for the first 4 months. T&Cs apply.
  • If your balance is over $500,000 (but less than $5 million) you will earn the ongoing variable rate of 4.7%
Disclosure
000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
  • Set up your Pay Cycle and connect your accounts from over 140 financial institutions.
  • Retrace your spending steps into categories with Spending Footprint.
  • Start tapping straightaway with Apple Pay, Google Pay™, Samsung Pay, and Garmin Pay.
  • No monthly or international fees on any of your transactions.
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Save Account

  • Set up your Pay Cycle and connect your accounts from over 140 financial institutions.
  • Retrace your spending steps into categories with Spending Footprint.
  • Start tapping straightaway with Apple Pay, Google Pay™, Samsung Pay, and Garmin Pay.
  • No monthly or international fees on any of your transactions.
Disclosure
010000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
  • Deposit at least $1,000+ each month from an external source
  • Make 5 or more eligible transactions
  • Grow your savings balance each month
Disclosure

Savings Maximiser

  • Deposit at least $1,000+ each month from an external source
  • Make 5 or more eligible transactions
  • Grow your savings balance each month
Disclosure
010000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
  • Earn up to 5.20% pa by depositing $1,000 in the previous month
  • No account fees
  • Easy access to your money
Disclosure

AMP Saver Account

  • Earn up to 5.20% pa by depositing $1,000 in the previous month
  • No account fees
  • Easy access to your money
Disclosure
020000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

HomeME Savings Account (<$100k)

    02001$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

    Growth Saver

      01000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

      Virgin Money Boost Saver

        01001$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

        Bonus Saver Account

          01000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

          Bonus Saver

            0100$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

            mySaver

              000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

              Simple Saver

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                Netsave Account

                  3000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

                  Online Savings Account

                    3000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

                    HSBC Everyday Savings Account

                      0501$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

                      Incentive Saver Account

                        4000.01$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

                        Bankwest Easy Saver

                          0502$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

                          Bonus Saver

                            0500$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

                            Incentive Saver Account

                              Important Information and Comparison Rate Warning

                              All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here. Rates correct as of October 5, 2024. View disclaimer.

                              Important Information and Comparison Rate Warning

                              The economy was impacted by a number of significant events in the March quarter, starting with bushfires and other natural disasters, followed by the outbreak of COVID-19 and the subsequent restrictions.

                              The government responded with the introduction of economic stimulus and support packages, in the form of one off payments and the JobKeeper and Jobseeker programs. 

                              The household saving to income ratio rose to 5.5% from 3.5% and could spike majorly in the coming quarter.

                              In the December 2008 quarter at the height of the Global Financial Crisis (GFC), it surged as high as 10.9%. 

                              Household consumption decreased by 1.1% in the March quarter and 0.2% through the year, the first time falls have been seen in household consumption since the GFC. 

                              Spending on services fell significantly, particularly where restrictions impacted most severely, such as air transport services, hotels, cafes and restaurants, recreation and culture.

                              Spending on goods rose, most notably in food and pharmaceuticals, as households prepared for the introduction of restrictions.

                              Western Australia, Tasmania and the Australian Capital Territory were the only states and territories to record positive growth, while New South Wales experienced the sharpest fall at 1.5%.

                              Despite the disappointing figures, IFM economist Alex Joiner said Australia was faring far better than other countries.

                              The calm before the storm

                              NAB economists were positive prior to the release of the ABS figures, forecasting just a 0.1% fall in growth. 

                              They were less positive about what comes next, suggesting Wednesday's figures would be dwarfed by a massive fall in Q2 of 2020. 

                              "Looking forward, we expect a large fall in output in Q2 of around 8.5% followed by return to growth in Q3 and a more substantial rebound in activity in Q4," they said. 

                              "We think it is unlikely that the level of activity will fully recover to pre-COVID levels before mid-2022.

                              "In year-average terms, this sees GDP decline by 4.3% this year before rising by over 4% in 2021."

                              NAB economists said the Australian economy looked to have entered a downturn of unprecedented speed and magnitude, evidenced clearly in the labour market. 

                              "We expect that the unemployment rate will rise to over 10% by year’s end and then partially recover in 2021, remaining above 7% reflecting the delayed recovery in the level of activity."

                              They added key risks to their forecast would be a second wave and a retriggering of containment measures, as well as the ongoing impacts to businesses and consumers.

                              "Should confidence remain depressed, it is likely that the recovery could be more protracted," NAB economists said. 

                              "Against that, the unprecedented, front-loaded support by policy-makers will assist both households and business to recover more quickly than in previous downturns.

                              "Structurally, slowing population growth based on a fall in migration presents a risk to both the demand and supply side of the economy as well."