Australia’s economy exhibited only modest growth during the first quarter of the year, as households increasingly prioritised saving their income, coupled with significant weather disruptions impacting exports and tourism.
Recent figures from the Australian Bureau of Statistics (ABS) indicated that the Gross Domestic Product (GDP) rose by a mere 0.2 per cent in March, a decline from 0.6 per cent in December. Over the past year, GDP has increased by 1.3 per cent. These results align with analysts’ revised expectations, which had forecasted quarterly growth between 0.1 and 0.3 per cent, and annual growth of approximately 1.2 to 1.4 per cent.
Despite this growth, per capita GDP fell by 0.2 per cent for the quarter and 0.4 per cent over the year, reflecting a setback after a brief increase in December. Katherine Keenan, head of national accounts at the ABS, noted that economic growth remained weak in the March quarter.
Public expenditure contributed significantly to the decline, marking the steepest negative impact on growth since late 2017. Moreover, extreme weather events have noticeably affected domestic consumption and export levels. The outcomes were particularly severe in sectors like mining, tourism, and shipping, highlighting the broader implications of climate factors on the economy.
In summary, Australia’s recent economic performance has been characterised by minimal growth, shifting household behaviour towards savings, and the adverse effects of extreme weather on key industries.