Australian Economy Shows Sluggish Growth at 1.5 Percent in Past Year amid COVID-19
Household spending increased by just 0.1 percent in the December quarter.
The nation’s economy grew slightly over 1.5 percent in the 2023 year, according to statistics from the Australian Bureau of Statistics (ABS).
The ABS referred to this growth as the “slowest annual growth rate since the COVID-19 pandemic.” The data indicates that the economy expanded by 5.4 percent in 2021, 2.4 percent in 2022, but contracted by 0.4 percent in 2020.
During the December quarter, Australia’s GDP increased 0.2 percent from $608.3 billion to $609.8 billion, based on ABS statistics.
Katherine Keenan, Head of ABS national accounts, mentioned that growth remained constant in December but slowed down every quarter in 2023.
“Government spending and private business investment were the key drivers of GDP growth in this quarter,” Ms. Keenan stated.
Government spending surged by 0.6 percent in the December quarter, following a 1.5 percent increase in the previous quarter.
“The growth in government expenditure was fueled by government benefits for households, with increased spending on medical products and services and higher employee expenses in commonwealth departments,” Ms. Keenan explained.
“The referendum on an Aboriginal and Torres Strait Islander voice held during the quarter also contributed to the rise in employee expenses,”
On the other hand, defence spending declined by 3.5 percent in the December quarter, after a 4.8 percent surge in the September quarter due to international training exercises.
Overall, non-defense national spending grew by 2 percent.
Private Investment Increase
Business investment rose by 0.7 percent in the December quarter, led by non-dwelling construction. This marked the fourteenth consecutive quarterly growth in business investment. Spending on data and new warehouse constructions increased by 5 percent.
Conversely, spending on new machinery and equipment dropped for the first time since September 2022 by 1.3 percent, attributed to reduced spending on agricultural equipment.
‘Continued Slowdown’: ANZ
In a research note responding to the figures, ANZ economists expressed that Australia’s headline GDP indicated a “continued deceleration in growth during the second half of 2023.”
