Australian economy accelerates as exports grow
Australia’s economy has accelerated out of a historic funk, ending 2024 with the fastest quarter of growth in two years.
Gross domestic product rose by 0.6 per cent in the December quarter, the Australian Bureau of Statistics reported on Wednesday.
That pushed growth over the year up to 1.3 per cent, from the 0.8 per cent annual figure recorded in September, which was the lowest yearly result since the early 1990s recession, outside of the pandemic.
The result smashed the estimates of the Reserve Bank, which in its February Statement on Monetary Policy released two weeks earlier predicted year-end growth to come in at just 1.1 per cent.
The figure was in line with the consensus of economists, who bumped up their prediction from 0.5 per cent following stronger-than-expected trade figures, government spending and business inventories.
Bureau head of national accounts Katherine Keenan said modest growth was seen broadly across the economy.
“Both public and private spending contributed to the growth, supported by a rise in exports of goods and services,” she said
Stay informed, daily
Following large rises in recent quarters, growth in government spending moderated to 0.7 per cent.
Private investment rose 0.3 per cent although investment in dwellings fell 0.4 per cent as high prices and labour shortages continued to weigh on the pipeline of work.
GDP grew 0.1 per cent on a per capita basis, after seven consecutive quarters of declines in economic output per person.
In its February meeting minutes, released on Tuesday, the Reserve Bank board noted activity in the Chinese economy was expected to slow and uncertainty around US tariff policy threatened global GDP forecasts.
Later on Tuesday, China announced it would slap retaliatory 15 per cent tariffs on a range of US agricultural imports.
An all-out trade war heightens the risk of a slowdown in China’s economy and the flow-on reduction to Australia’s economic output.
Much will depend on how much stimulus China’s legislature, the National People’s Congress, announces at its opening session beginning on Wednesday.
Treasurer Jim Chalmers said the numbers “reflect the substantial and very encouraging progress Australians are making together in our economy”.
“This pick-up in quarterly growth is an early and encouraging sign that momentum is building in the economy,” he said.
“Resilient and rebounding growth is particularly important in the face of heightened uncertainty at home and abroad, as we brace for Tropical Cyclone Alfred and confront rising global trade tensions.”
