The Australian Bureau of Statistics released its quarterly GDP figures on Wednesday (6 June), revealing that growth in mining exports had nudged March quarter GDP up to 1 per cent. The result was above the market consensus of 0.9 per cent.
Annual GDP growth was 3.1 per cent, which Treasurer Scott Morrison quickly pointed out is above the average growth of the OECD and “all G7 nations”.
“This is the strongest annual growth rate in around two years and is above the long-run average,” Mr Morrison said.
But AMP Capital chief economist Shane Oliver said that the strength in GDP growth over the first quarter of 2018 is “unlikely to be repeated” in the June quarter, noting that Australian GDP has tended to run “hot and cold” in recent years.
“Looking back at history, the last three strong GDP prints (around 0.9 per cent or 1 per cent) have been followed by a weaker outcome in the following quarter which is often caused by ‘one-off’ impacts like strong net exports or an inventory build that are then unwound in the following period,” Mr Oliver said.
Australia’s economy, therefore, is likely to “hold up” in the near term with little risk of a recession on the horizon, he said.
“Compared to our global peers, Australia’s headline growth profile also looks favourable (US at around 2.5 per cent currently, Eurozone at around 2 per cent and Japan near 2 per cent), although much of this growth ‘outperformance’ can be explained by higher population growth in Australia,” said Mr Oliver.
