Economy grew 0.3% in September quarter
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The news: The Australian economy grew 0.3% in the September quarter, and 0.8% since September 2023, with new data from the Australian Bureau of Statistics showing sluggish GDP growth. The result was below market expectations.
Treasurer Jim Chalmers has called the result "positive but weak".
The numbers: The per capita recession continued, with GDP per capita falling 0.3%. This was the seventh consecutive quarter of declines.
Public investment increased 6.3% over the quarter to the biggest on record. Government spending increased 1.4%.
Household spend was flat following a 0.3% fall in June. The household saving ratio rose to 3.2%, with gross disposable income up 1.5%, supported by stage 3 tax cuts. Real gross disposable income rose 0.2% in per capita terms.
Net trade contributed 0.1 percentage points to GDP growth on the back of growing exports, due to higher offshore demand for coal, and a decline in imports over the quarter.
Nominal GDP rose 0.4% over the quarter.
The context: One of the most significant drivers of GDP has been government spending. Economists and think tanks have been debating the benefits of public spending amid a cost of living crisis, with inflation yet to return to the Reserve Bank's target band.
The GDP per capita growth rate has become a source of increased focus due to heightened concerns about declining living standards. However, its usefulness is contested by some economists including Reserve Bank governor Michele Bullock.
What they said: “The Australian economy grew for the twelfth quarter in a row, but has continued to slow since September 2023," ABS head of national accounts Katherine Keenan said.
“The rise in public investment in the September quarter followed three consecutive quarterly falls. The level of investment this quarter was the largest on record, the previous record was in September 2023.
“Social benefits paid to households increased this quarter as households received energy cost relief rebates, including the Energy Bill Relief Fund. At the Commonwealth level growth in social benefits to households was lower, including NDIS and aged care, compared to recent quarters.
"The rebate-driven fall in household electricity spending was offset by growth in other categories. Clothing and footwear rose in response to unseasonably warm weather and essential spending grew moderately with continued growth in rent, health and education services."
Chalmers said Australians would be worse off without the governments spending.
"Our economy is growing but very slowly, weighed down by interest rates, cost of living pressures and global uncertainty," he said in a statement.
"Australians would be much worse off and growth would be even weaker without our responsible approach to the Budget and our cost-of-living support.
"The Government has maintained a primary focus on the fight against inflation and helping people with the cost of living without ignoring the serious risks to growth."
The sources: Australian Bureau of Statistics media release, Treasurer media release
