OZ GDP: Didn’t We Do Well (No Not Really)!

Superficially, Australia’s economy maintained its momentum in the three months through June, with the expansion underpinned by exports and sectors less impacted by the Reserve Bank’s 12 interest-rate increases.

That said, key themes from the accounts are: ongoing weakness in consumer spending; slowing growth in employee compensation; rapid deterioration in productivity; offset by boosts from business investment and services exports, but which is a fudge.

The ABS reported that Gross domestic product advanced 0.4%, the same pace as the prior quarter and in line with economists’ estimates. From a year earlier, the economy grew 2.1% from an upwardly revised 2.4%.

However, while the economy grew by 0.4% in aggregate terms, it shrank by 0.3% for the second consecutive quarter in per capita terms, a more realistic measure, than gross GDP which is inflated by high migration and hence population growth. Per capita GDP also declined by 0.3% over the 2022-23 financial year.

It is clear that the main driver of Australia’s GDP growth is the Albanese Government’s unprecedented immigration program, which delivered a record net 502,000 visa holders (excluding tourists) into Australia in the year to July, with student visas accounting for 297,000 of these arrivals.

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Author: Martin North

Martin North is the Principal of Digital Finance Analytics

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