WA households resilient as rates rise

Household spending rose 1.6 per cent in Western Australia in the year to December, but the state’s economy overall barely grew.

Australia-wide, gross domestic product rose 0.5 per cent in the quarter.

That was marginally lower than the September quarter.

The numbers come after a record string of consecutive interest rate hikes by the Reserve Bank of Australia, which started in May.

But the higher cash rate has not yet made a big dent in Western Australian households, state final demand data showed.

The growth of household spending was a brighter point in the state’s data, increasing 1.6 per cent in the quarter.

In September, the increase was 2 per cent.

The number show household spending is still growing at a rapid clip, even if the rate is slower than the previous quarter.

State final demand, which tracks the state's whole economy except trade, increased only 0.1 per cent in the quarter.

National

Across 2022, GDP grew 2.7 per cent.

That is almost exactly the level the Reserve Bank of Australia predicted earlier this month in its statement of monetary policy, which forecast GDP would rise 2.75 per cent in the year.

However, the market had expected a higher figure.

APAC economist at job site Indeed, Callam Pickering, said national economic growth had been well short of market expectations.

“Australia’s economy grew in the December quarter but it wasn’t the type of growth that should give people much confidence for the year ahead,” Mr Pickering said. 

“This coming year will prove highly challenging, with the household sector no longer in a position to drive growth.”