Australia's Massive Fires Hurt Tourism And Threaten To Slow Its Economy Australia hasn't had a recession in nearly 30 years, an impressive track record for an industrialized county. But the fires threaten two pillars of the country's economy.
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Australia's Massive Fires Threaten To Slow Decades-Long Economic Boom

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Australia's Massive Fires Threaten To Slow Decades-Long Economic Boom

Australia's Massive Fires Threaten To Slow Decades-Long Economic Boom

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Australia has gone nearly three decades without a recession. It's an enviable economic record. But as NPR's Jim Zarroli reports, the Australian wildfires are threatening key parts of the country's economy.

JIM ZARROLI, BYLINE: Normally, the campground run by Fiona Austin near the Australian city of Shoalhaven is full in January, but tourists have been ordered to evacuate the area. And with the fires still raging, she doesn't expect them to be back anytime soon.

FIONA AUSTIN: There is a lot of fear because they're being so changing and volatile. You know, people are still unsure as to whether they could flare up again.

ZARROLI: As planes carrying water to the wildfires buzz overhead, Austin tells NPR her campground is empty right now except for a few permanent residents.

AUSTIN: We're on 15 acres so - yeah. To only have a couple of tents here - here comes another plane - is very unusual for us.

ZARROLI: Australians call themselves the lucky country. The economy has been growing steadily since 1991, a remarkable run. Economist Justin Wolfers of the University of Michigan says that's partly because the population has grown a lot. But, he says, the country's been fortunate in some other ways, too.

JUSTIN WOLFERS: Not only did we start the last few decades a relatively rich country and in the club of the first-world industrialized countries; we're also parked right next to Asia, which is where much of the world's growth has come from over the past few years.

ZARROLI: As China has grown, it's been hungry for the kinds of commodities Australia has a lot of, like coal, natural gas, wheat and wool. China sends more tourists to Australia than any other country. But the rampaging fires are dealing a blow to the economy.

Martin North heads the research firm Digital Finance Analytics.

MARTIN NORTH: Just the area of Australia that's now impacted is unheard of. So we are in uncertain territory.

ZARROLI: The fires have destroyed more than 1,800 homes, as well as enormous amounts of prime farmland. Even in places far from the fires, work life is being disrupted. People with respiratory problems are staying home. Hospital visits are up. And construction crews can't work. In Sydney, ferries aren't running because of poor visibility in the harbor, says Katrina Ell of Moody's Analytics.

KATRINA ELL: There was a few days late December when fire alarms were actually going off in very large buildings within the city center just because of the poor air quality.

ZARROLI: As word of these conditions spreads around the world, tourism is taking a big hit. There's even been talk of rescheduling some of the big events that draw in millions of visitors each year, like the Australian Open and the Tour Down Under bike race. Martin North says this is happening at a time when the Australian economy was already softening a bit.

NORTH: We were already looking, I think, pretty shaky. And that was before all the bushfires.

ZARROLI: China's economy has slowed lately, and Australia has felt some pain. Unemployment ticked up last year. House prices, which have been skyrocketing for a long time, have taken a hit. Katrina Ell of Moody's Analytics doesn't think Australia is headed for a recession, but it's hard to know for sure.

ELL: What's really concerning to us is that this is still relatively early in our typical bushfire season. So there's concern about how much longer this bushfire season will run for.

ZARROLI: The longer the fires last, the more damage they will do. And that means that after almost 30 years of steady growth, the lucky country could finally see its luck run out.

Jim Zarroli, NPR News.

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