‘The Australian economy is on its knees’: GDP drops to recession levels
Australian gross domestic product rose just 0.1% in the March quarter, and is up 1.1% since the same period last year.
This marks the slowest rate of annual economic growth, outside of the 2007–2008 global financial crisis, since the recession in the early 1990s.
Government spending rose 1%, driven by housing benefits, energy bill relief, and medical services. Household spending rose 0.4%, driven by essentials like electricity and rent, while private investment fell by 0.8% – with a 4.3% fall in non-housing investment.
Public capital investment fell for the second straight quarter, with reduced investment in water, energy, transport, health, and education. Household income received grew at its lowest rate since December, 2021, while net trade fell 0.9%, and mining profits dropped 5.3%.
Katherine Keenan, head of national accounts of the Australian Bureau of Statistics, said the economy is “experiencing its lowest through-the-year growth since December 2020”.
“GDP per capita fell for the fifth consecutive quarter, falling 0.4 per cent in March and 1.3 per cent through the year.”
Interestingly, there were increases in some discretionary categories “because of overseas travel and spending on gambling, sporting and musical events,” Keenan said, with discretionary spend up 0.1% overall.
“I think that’s a pretty stark reminder of the pressures that people are under,” Jim Chalmers said on ABC Radio National this morning, as he addressed fears of a looming recession.
“Overwhelmingly the story of consumption, our economy, is people focusing on the absolute essentials,” he said.
“And we saw that in the national accounts too.”
According to Fear and Greed’s Sean Aylmer, “the Australian economy is on its knees”.
“Outside COVID, it is the worst six-month performance in decades,” he said.
“We are not in recession officially, but that is only because of immigration. If you measure growth on a per capita basis, Australia is going backwards, and has been for five quarters.”
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Nathan Jolly is the Features Editor at Mumbrella. He joined the team in July, 2023.
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So we’re basically back to what it was pre-Covid, only the rates were under 1% at that point.
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