(Bloomberg) — Australia’s economic system accelerated within the closing three months of final 12 months, supporting the Reserve Financial institution’s cautious strategy to additional coverage easing even after it lower rates of interest final month.
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Gross home product superior 0.6% within the fourth quarter of 2024, in keeping with economists’ estimate and double the tempo of the prior three months, official knowledge confirmed Wednesday. On a per capita foundation, GDP rose 0.1% following seven consecutive quarters of falls.
From a 12 months earlier, the economic system expanded 1.3% additionally matching forecasts.
“Modest progress was seen broadly throughout the economic system this quarter,” stated Katherine Keenan, ABS head of nationwide accounts. “Each private and non-private spending contributed to the expansion, supported by an increase in exports of products and providers.”
The RBA lower its money charge by 25 foundation factors to 4.1% final month, citing rising confidence that inflation was headed again towards goal. However it additionally expects financial progress to select up this 12 months to 2.4% in December and that, along with “lingering tightness” within the labor market, raises upside dangers on client costs.
The figures can be welcomed by Australia’s center-left Labor authorities which is trailing the opposition Liberal-Nationwide coalition forward of an election due by mid-Might.
The RBA’s up to date GDP forecasts are under the 20-year pre-pandemic common of practically 3%. Governor Michele Bullock put that right down to a comparatively sluggish choose up in client spending.
“Consumption is recovering however it’s not recovering as strongly as we initially thought it could,” she stated. “We nonetheless have it recovering fairly slowly, and that’s a giant driver of GDP progress.”
Whereas progress nonetheless stays under peak ranges, the acceleration within the December quarter supplies a extra optimistic outlook. Australia’s enterprise situations have additionally been fairly buoyant and retail gross sales strengthened in 5 of the six months by January.
–With help from Shinjini Datta.
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