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Last updated at 12:44 BST, Wednesday, 01 June 2011

Bad news for Australian economy

Summary

1 June 2011

The Australian economy has suffered its worst contraction in 20 years.

It's being blamed on severe weather and the Japanese earthquake and tsunami, which has damaged the country's second biggest trading partner.

Reporter:
Nick Bryant

Floods in Australia

Flooding is believed to be partly responsible for Australia's current economic conditions

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Report

Australia now knows the cost of its summer of disasters, with the flooding and a cyclone in resources-rich Queensland hitting the country's bottom line.

It's contributed to a 1.2 % fall in GDP, the biggest contraction in the Australian economy in twenty years.

With rail lines buckled by flood waters and digging brought to a halt at many mines, coal exports from Queensland were particularly severely hit.

The Australian economy has also been badly affected by the Japanese earthquake and tsunami. Japan is the country's second biggest trading partner.

On top of all that, the Australian dollar has been at its highest levels against the US dollar since first being floated in the 1980s, which has also hit exporters.

Australia managed to avoid recession after the global financial crisis, earning it the nickname 'the wonder from down under'. And most economists think this figure is a one-off blip.

Asian demand for Australian resources, like iron ore and coal, should help the economy rebound, and the prediction is for a resumption of strong growth by the end of the year.

Nick Bryant, BBC News, Sydney

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Vocabulary

resources-rich

an area which contains a large amount of valuable minerals and crops

bottom line

the final calculated amount of money that is profit or loss

contributed to

been partly responsible for

buckled

bent and twisted

brought to a halt

stopped

On top of all that

As well as all those other negative things

down under

an expression that means Australia

a one-off blip

a single bad result which won't be repeated

rebound

return to its previous healthy condition

a resumption of

a restarting of

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