Australia saw economic growth of 3.1 per cent through the December quarter – “significantly beating market expectations” of 2.5 per cent – off the back of strong increases in household spending and private investment.
“This is the first time in recorded history that Australia has seen two consecutive quarters of economic growth of more than 3 per cent. The Australian economy has recovered 85 per cent of its COVID-induced fall, six months earlier and twice as fast as we expected in last year’s October budget,” Mr Frydenberg said.
Mr Frydenberg called the figures a “very encouraging performance” from the Australian economy given the “economic abyss we were staring into” at the peak of the COVID-19 crisis and credited them to the country’s world-leading health response.
“This is an achievement all Australians contributed to and all Australians can be proud of,” Mr Frydenberg said, but warned that a number of sectors and regions “were still doing it tough”.
“What is particularly pleasing in today’s numbers is that as our emergency support is tapering off, the private sector is stepping up. In the December quarter, direct economic support from the Federal Government halved. Yet at the same time, the economy grew by 3.1 per cent, 320,000 new jobs were added, and 2.1 million workers graduated off JobKeeper,” Mr Frydenberg said.
Mr Frydenberg also noted that savings ratios had fallen from 18 per cent to 12 per cent in the clearest sign yet that pent-up savings could cover the costs of the withdrawal of JobKeeper. However, savings remain three times higher than their pre-pandemic levels while Australia’s economic activity is still 1.1 per cent lower than was recorded in the 2019 December quarter.
“The job is not done, and there are still challenges ahead. But you wouldn’t want to be in any other country other than Australia as we begin 2021,” Mr Frydenberg said.
