Australia is in its first recession since 1991, according to Glenn Stevens, the Governor of the Reserve Bank of Australia (RBA), in a speech titled ‘The Road to Recovery’.

Stevens said there was no precedent for escaping a global recession in which virtually all of the country’s trading partners were contracting. In addition, Kevin Rudd, Prime Minister of Australia, recently said: “The worst global economic recession in 75 years means it’s inevitable that Australia will be dragged into recession.”

Gross domestic product (GDP) had already declined by -0.5% in Q4 2008, and another drop looks likely for the first quarter of this year. In April, the central bank decided to cut its key cash rate by -0.25%, taking rates to a record low of 3%.

The Government has announced spending packages worth over AUS$53bn (US$36bn) in recent months and more is expected in its annual budget in May. According to Stevens, this stimulus has helped Australian households stay relatively less depressed than in many other developed nations.