Latest figures show the Australian economy is heading towards 28 consecutive years of growth, but that growth is largely being achieved by government spending.
The Australian Bureau of Statistics (ABS) released its national growth figures, which showed the economy grew by 0.4 of a percentage point in the March quarter.
But that growth was largely thanks to the public purse, with household spending contributing the barest of margins.
“Government spending was the main contributor to growth, reflecting ongoing delivery of services in disability, health and aged care,” it said in a statement.
“Household spending slowed and contributed a modest 0.1 [of a percentage point] to growth, reflecting reduced spending on discretionary goods such as furnishing and household equipment, recreation and culture and hotels, cafes and restaurants.”
The ABS also said that dwelling investment continued to fall last quarter.
The March figure meant that annual GDP grew by 1.8 per cent, seasonally adjusted, compared with the same quarter last year. The ABC reported that this is the lowest figure recorded since September 2009, when the world was grappling with the fallout of the global financial crisis.
“The Australian economy continues to grow, but more slowly than our long-term average of 3.5 per cent,” said Bruce Hockman, the Bureau’s chief economist.
It comes a day after the ABS released retail turnover figures for the month of April 2019, which shrank by 0.1 of a percentage point — with the biggest falls recorded in our two largest states, down by 0.4 of a percentage point in both NSW and Victoria.
That followed a 0.3 of a percentage point rise in turnover recorded in March.
This week, the Reserve Bank cut the official interest rate to a new record low, on concerns about unemployment and low wages growth. Only two of the four major banks passed on the cut in full to their customers.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.
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