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Economy

Record rain in Australia douses wildfires but prompts flood warning

Successive natural disasters and coronavirus likely to hit country's economy

Sea foam covers an area in front of beachfront houses after heavy rain and storms at Collaroy in Sydney's Northern Beaches area. The region's economy could be adversely affected if road, railway and other networks are blocked by flooding.    © AP

SYDNEY -- Australia is being pummeled by record heavy rainfall that has extinguished the wildfires ravaging New South Wales but prompted the country's weather agency to issue flood and thunderstorm warnings for multiple parts of the state.

"In what has been a very traumatic, exhausting and anxious bush fire season so far, for the first time this season all bush and grass fires in NSW are now contained," the NSW Rural Fire Service said on Thursday. The wildfires broke out in November last year.

With the rains also hitting the state of Queensland, north of NSW, the successive disasters are expected to weigh heavily on the Australian economy.

In Sydney, the state capital of NSW, 391.6 mm of rain fell in four days from Feb. 7, the heaviest rainfall in 30 years. The rain has since continued. In some areas, more than 100 mm fell in 24 hours up to Thursday morning, with the Australian Bureau of Meteorology issuing a flood warning.

The torrential rain also appears likely to end the droughts that eastern Australian states such as NSW are suffering. Dams supplying water to Sydney and its environs stood at an average 77.5% of capacity as of Friday, up a steep 35.7 percentage points from a week earlier.

Sunshine Coast, a resort area in Queensland, saw rainfall of 232 mm in 22 hours, topping its average of 190 mm in February. A flood warning has been issued for a number of areas in the state.

Agriculture and the development of natural resources are active industries in Queensland. Economic activity in the state will be adversely affected if road, railway and other transportation networks are blocked by flooding or other disasters.

Wildfires and heavy rain, in addition to the outbreak of the new strain of coronavirus in China, are becoming serious risks to the Australian economy. Tourism, which peaks in Australia in December and January, has suffered a devastating blow due to the escalation of wildfires over those months.

The wildfires and dampened consumer sentiment will pull down the nation's gross domestic product by 0.4 points in the fiscal year through June 2020.

Tourism and education are also expected to suffer amid the Australian government's ban on travelers from China in the wake of the coronavirus outbreak.

Swiss financial services group UBS forecast that Australia's GDP will contract by 0.1% in January-March from the preceding quarter.

A recession is generally defined as two consecutive quarters of negative GDP growth. Australia had not experienced this for 113 quarters in a row, the longest stretch recorded worldwide, until the July-September period of 2019.

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