Australia’s GDP had a modest rise in the March quarter but the country still experienced weak economic growth, the Australian Bureau of Statistics found.
Australia’s GDP had a modest rise in the March quarter but the country still experienced weak economic growth, the Australian Bureau of Statistics found.
The ABS today released its national accounts for the three months to March, finding the country’s gross domestic grew by 0.1 per cent in the March quarter and by 1.1 per cent from the corresponding period in 2023.
Despite this being the tenth successive quarter with a GDP growth, the GDP per capita fell for the fifth quarter in a row.
The ABS cited weak economic growth and strong population growth for the drop.
“GDP growth was weak in March, with the economy experiencing its lowest through the year growth since December 2020,” ABS national accounts head Katherine Keenan said.
“GDP per capita fell for the fifth consecutive quarter, falling 0.4 per cent in March and 1.3 per cent through the year.”
According to the ABS, government spending increased by 1 per cent and household spending grew by 0.4 per cent in March.
The ABS also found imports rose significantly while public investment continued to slow.
In Western Australia, the ABS found total final consumption expenditure rose by 0.8 per cent driven by a 1.3 per cent rise in government spending and 0.5 per cent in household spend including transport services and rent.
Federal Treasurer Jim Chalmers said the national accounts report confirmed growth in the Australian economy was flat in the first three months of 2024.
“The primary cause of this very weak growth was higher interest rates, combined with moderating but persistent inflation and ongoing global uncertainty,” he said.
“Treasury expected our economy to be weak so it is not surprising to see the economy barely grew in the quarter.”
Mr Chalmers said the 0.1 per cent GDP rise in the past quarter was below median market expectation but any growth was still welcomed.
Moody’s Analytics economist Harry Murphy Cruise said the data showed a slow start to the Australian economy this year.
“Household spending was the big unknown ahead of this print,” he said.
“We knew that families were struggling under the weight of sticky inflation and still-high interest rates, but the March-quarter data makes clear that they kept trimming their spending to cope with cost-of-living pressures.”
Mr Murphy Cruise said the 0.8 per cent drop in business investment in the past quarter was also bad news.
“With inflation digging in its heels, things have gotten a little trickier for the economy this year,” he said.
“We expect GDP growth to slow to just 1.1 per cent this year from 2.1 per cent last year.
“We have also lowered our outlook for 2025, with the economy now on track to expand 2.1 per cent, compared with 2.2 per cent in our previous forecast.”
Australian Chamber of Commerce and Industry policy and advocacy chief David Alexander said the continued shrinkage of the GDP per capita showed conditions were moving in the wrong direction.
“The figures only serve to highlight the need for significant economic reform to lift productivity in the economy,” he said.
The ACCI said cost of doing business pressures were mounting, and businesses margins were being squeezed, with gross operating surplus of private corporations down 7.3 per cent in the year to 2024.
“Businesses need more confidence that policy settings are supportive of investment,” Mr Alexander said.
“More support is needed to drive business investment, which is essential to restoring productivity growth and reigniting the economy.
“The large-scale industrial relations changes enacted over the last two years are making the economy less flexible and productive, with the full effects to impact on business over coming months and years.”
