Australia has recorded its lowest annual economic growth since 2020, up only 0.3 per cent in the September quarter, the Bureau of Statistics found.
Australia has recorded its lowest annual economic growth since 2020, up only 0.3 per cent in the September quarter, the Bureau of Statistics found.
The ABS released its national accounts data today, finding the country’s gross domestic product (GDP) rose 0.4 per cent in nominal terms or 0.3 per cent when seasonally adjusted.
Compared to September 2023, Australia's GDP only rose by 0.8 per cent.
Inflation is at its lowest since 2021, rising 0.2 per cent in the September quarter and up 2.8 per cent compared to the corresponding period last year.
The ABS found annual inflation fell to its lowest rate since the March quarter 2021.
ABS national accounts head Katherine Keenan said the Australian economy grew for the twelfth quarter in a row but continued to slow since September last year.
The recent quarter’s result was driven by public sector spending, with government consumption and public investment being the main contributors, the ABS found.
“The rise in public investment in the September quarter followed three consecutive quarterly falls,” Ms Keenan said.
“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.”
Ms Keenan said the quarterly growth in domestic prices was the lowest observed since March 2021.
“The growth this quarter reflected softening goods prices in the economy alongside more resilient services prices reflecting high demand for labour and costs of essential services such as rent, education and health,” she said.
Federal Treasurer Jim Chalmers acknowledged the slow pace of of the country's economy, citing interest rates, cost of living pressures and global uncertainty as reasons for weighing down the growth.
"Growth at 0.3 per cent in the September quarter and 0.8 per cent through the year is below historical averages and below market expectations," he said.
"Today’s release shows growth is below what most economists expected, demonstrating that demand is weaker, not stronger than most economists forecast.
"We know even with the progress we’ve made in the national data, that doesn’t always translate to how people are faring and feeling in the economy."
Moody's Analytics China and Australia economics head Harry Murphy Cruise said the 0.8 per cent growth from last year was the weakest print outside of the pandemic since the early 1990s recession.
Mr Murphy Cruise predicted the Australian economy to remain sluggish until interest rates come down.
"The Aussie economy remains in the slow lane as sky-high borrowing costs and structurally higher prices zap spending," he said.
"Despite progress on inflation, that first cut still looks a little while off. Members of the Reserve Bank Board are a cautious bunch and will want to be certain inflation is under control before pulling the rate cut trigger.
"We had expected the December quarter inflation print to provide that evidence, putting the first rate cut in February.
"However, recent comments from board members suggest it will take back-to-back showings in the December and March quarter prints to convince the board to cut."
