Australia's economy showcased significant expansion of 0.6% in the December quarter, raising the annual growth rate to 1.3%, according to data from the Australian Bureau of Statistics released on Wednesday. This improvement is notable compared to the softer quarterly increases observed throughout the past year, which were recorded at 0.2% and 0.3%, respectively.
A primary driver behind this rebound has been stronger household consumption as highlighted by CommBank Research. Furthermore, GDP per capita saw a modest increase of 0.1%, marking the end of a challenging phase with seven consecutive quarters of decline. Household spending demonstrated robust growth at 0.4%, largely propelled by essentials such as rent and healthcare, while discretionary purchases also saw an uptick during notable retail sales events. On the governmental side, expenditure rose by 0.7%, reflecting increased investments in health, education, and policing initiatives.
Concurrently, private investment experienced a slight rise of 0.3%, which was supported primarily by infrastructure and mining projects. However, residential construction faced a decline of 0.4%, impacted by persistent cost pressures in that sector. Exports from the services sector, particularly in travel, exceeded projections, significantly contributing to net exports and aiding economic growth rather than detracting from it, a point emphasized by CommBank Research. Additionally, the household savings ratio ascended to 3.8% from a previous figure of 3.6%.
This increase can be attributed to rising wages and rental income which have notably balanced out the effects of elevated taxes and mortgage interest payments. Nominal GDP saw a rise of 1.6%, underscoring stronger domestic demand along with improved export prices, particularly for mineral ores, LNG, and agricultural goods.
This data presents a picture of an economy rebounding with renewed vigor, driven by key sectors that indicate robust consumer confidence and ongoing investment..