In the first quarter of 2024, Australia's economic growth fell short of expectations. The Gross Domestic Product data released on Wednesday showed that overall economic growth was impacted by weak consumption and reduced export contributions.
According to the Australian Bureau of Statistics, GDP grew by 1.1% year-on-year in the first quarter of 2024. This figure is slightly below the expected 1.2% and lower than the 1.5% recorded in the fourth quarter of 2023.
Quarterly GDP growth was 0.1%, lower than the anticipated 0.2% and also below the previous quarter's 0.2%.
Wednesday's data indicates that due to high inflation and the continued pressure of high interest rates, consumer spending in Australia has significantly weakened this year.
Nevertheless, GDP remains in positive territory, primarily thanks to increased government spending on family welfare and energy subsidies. This has kept household spending in the positive range, albeit with a modest increase.
Business expenditure declined this quarter, with total capital expenditure decreasing by 0.9%.
Earlier this week, data showed that due to further weakening demand from major export markets, particularly China, net exports had a negative impact of 0.9% on annual GDP.
Australia also experienced a current account deficit this quarter.
Wednesday's data indicates that under the pressure of high inflation and high interest rates, the Australian economy is cooling rapidly. However, how the Reserve Bank will adjust interest rates in the coming months remains uncertain with inflation still running high.
