Australia GDP grew 3.3% qoq in Q3, above expectation of 2.5% qoq. Household spending drove the rebound by rising 7.9%. Final consumption expenditure rose 5.9%. Total gross fixed capital formation dropped -0.1%. Exports dropped -3.2% while imports rose 6.5%.
Head of National Accounts at the ABS, Michael Smedes said: “Following the record 7.0 per cent decline in the June quarter, Australia experienced a partial recovery in the September quarter. As a result, economic activity fell 3.8 per cent through the year to September quarter.”
Treasurer Josh Frydenberg said, “facing a once-in-a-century pandemic that has caused the greatest economic shock since the Great Depression, Australia has performed better on the health and economic fronts than nearly any other country in the world.”
“Technically, Australia’s recession may be over, but Australia’s economic recovery is not,” he said. “There is a lot of ground to make up and many Australian households and many Australian businesses are doing it tough – very tough.”
RBA Lowe: Australian economy has now turned the corner
In the remarks to a House committee, RBA Governor Philip Lowe said Australia has “now turned the corner” after an extremely difficult year, and economy recovery is “underway”. “The economic news has, on balance, been better than we were expecting. RBA is expected GDP growth to be “solidly positive” in both Q3 and Q4, followed by 5% growth over 2021 and 4% over 2022.
“Recent medical breakthroughs give us some hope that things will work out better than this,” Lowe added. “If so, confidence would lift and there would be a further easing of restrictions. The result would be an upside surprise to growth and jobs, especially given the significant policy stimulus that is already in place, the generally strong balance sheets and the substantial government incentives for businesses to employ people and invest.”
On monetary policy, Lowe said the movement in market prices in response to the package announced in November was “broadly as we expected”. The board will “continue to review the details of this package” and policymakers are “prepared to do more, if that is required”. But he reiterated that negative interest rate is “extraordinarily unlikely, with any benefits being outweighed by the costs”
Full remarks here.