Australia’s economy is slowing as a result of widespread restrictions on COVID-19, according to new data from the Australian Bureau of Statistics (ABS).
As the national accounts show this morning, the ABS shows that Australia’s gross domestic product (GDP) grew by 0.8 per cent in the first three months of 2022.
This exceeded market expectations, which were expected to grow by around 0.7%, but represent a significant slowdown in the economy.
ABS shows that Australia’s Gross Domestic Product (GDP) grew by 0.8% in the first three months of 2022. (Supplied)
The previous quarter, which benefited from a sharp rise in activity following the Delta Stump blockages, Australia’s GDP rose a staggering 3.4% during the quarter.
The acting head of the National Accounts of the ABS, Sean Crick, said that today’s positive increase was driven by the economic consumption of ordinary households.
“The economy grew for the second consecutive quarter after a contraction in the September quarter of 2021, when economic activity was hit by the Delta outbreak,” he said.
“Household consumption continued to drive growth this quarter.
“Following the easing of COVID-19 restrictions, household spending on transportation services, hotels, cafes and restaurants, and leisure and culture increased.”
Rising petrol prices are affecting the ability of Australian households to save income. (Peter Rae)
The other side of the rise in household consumption was the fall in the household savings ratio, which tracks approximately the amount of income that Australian households store.
Household income savings fell from 13.4% to 11.4% during the quarter and showed that household spending outpaced the growth of household income so far in 2022.
“The 11.4% household savings ratio was the lowest since the onset of the COVID-19 pandemic, but remains above pre-pandemic levels,” Crick said. .
Treasurer Jim Chalmers said today’s figures were a “mess” that Labor had inherited. (new)
Treasurer Jim Chalmers did not punch himself in addressing today’s GDP data, saying “it made no sense to mince words” about what he thought were fundamentally weak figures.
“Consumption, investment in housing, investment in new businesses, exports and nominal GDP were weaker during the March quarter than our predecessors budgeted,” he said.
“These are examples of the mess the old government has left behind to clean us up.”
Australia’s GDP grew by 0.8% in the March quarter, exceeding market expectations, but well below the 3.4% growth recorded in the previous quarter.
“It doesn’t make sense to poke words about the kind of conditions we’ve inherited,” Chalmers said.
“We have inherited higher and rising inflation and interest rates, falling real wages and $ 1 trillion in debt, not close enough to prove it.”
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