Citigroup Inc and Australian Security Capital (AMP Capital Investors) warned that the Australian economy may have contracted slightly in the second quarter, coupled with the expected contraction caused by the blockade this quarter, the Australian economy could fall back into a "technical recession".

Australia will release second-quarter GDP data on Wednesday, and two analysts at Citigroup and Security Capital said that while the economy performed quite well in the second quarter, the decline in net exports could be a drag on GDP.

Josh Williamson, chief economist of Citigroup Inc Australia, said the impact of the decline in net exports was "expected to outweigh all positive domestic growth drivers such as household consumption, government demand and business investment".

Sydney, Australia's largest city, is currently in the 10th week of the blockade, Melbourne and the capital Canberra have also implemented home orders, and authorities are trying to control the outbreak of novel coronavirus Delta.

Affected by the epidemic, Australia's GDP shrank for two consecutive quarters in the first half of 2020, ending the absence of a technical recession for nearly 30 years.

Shane Oliver, chief economist of Security Capital, said: "the concept of a 'recession' related to the blockade has no usual meaning because this is not a normal cyclical recession and the economy should recover more quickly. But the situation will not be optimistic, and the news of a new recession will be bad for confidence. "