Australia’s economy grew by 0.2 per cent in the June quarter, and 1 per cent over the last year, according to data released by the Australian Bureau of Statistics.
It is the weakest rate of annual growth Australia has recorded in years, in seasonally adjusted terms.
Andrew Canobi, Director Franklin Templeton Fixed Income, commented on the Australian GDP data release:
“The GDP figures confirm our fears. Growth is anaemic at a mere 0.2% for the second quarter, household consumption was very weak and overall detracted from GDP by 0.1%, investment remained soft and only government spending saved the figure from being negative overall by contributing 0.3%.
“In fact, household spending looks to have been the weakest since the COVID lockdown era.
The Australian economy grew 1.5% in 2023-24, the weakest annual growth (excluding the COVID-19 pandemic) since 1991-92, a year that included the gradual recovery from the 1991 recession. – ABS
“Unfortunately none of this will spur the RBA to ease rates with government spending more than plugging the gap of a retrenching consumer. So the private sector is in recession, government spending is more than offsetting this keeping the headline numbers barely positive.
“Further, strong growth in unit labour costs and negative GDP per hour worked confirms our fears that Australia is stuck in a weak productivity, high cost malaise. All this equals to higher interest rates for longer. Not happy reading.”
