Australia suffered its biggest drop in GDP since 1991 this week. Official figures announced, showed that the Australian economy fell by 1.2% in the first quarter of this year the biggest single drop in 20 years. The drop resulted from a 8.7% reduction in exports. Much of this was caused by the after effects of the Queensland floods which saw a sharp reduction in exports of food, coal and minerals from the Northern state.

Despite this severe drop, figures were actually better than expected. Most economists had predicted a 2% decline. The figures were balanced out by an increase in industrial investment which rose by 6%. The Australian Government expects to see the economy rebound in the second half of 2011 as commodity prices and demand rise. The better than expected news saw the Australian dollar rise by 2%.