Australian Gross Domestic Product (GDP) rebounded in the December quarter posting growth of 3.4 per cent on a post-lockdown spending surge following a pandemic-induced halt, figures released by the Australian Bureau of Statistics (ABS) revealed on Wednesday.
December’s strong growth follows a contraction of 1.9 per cent in the September quarter due to several state lockdowns which produced the second largest economic hit on record.
The strong quarterly growth propelled the annual figure to 4.2 per cent, beating market expectations of a 3.7 per cent increase.
“Domestic demand drove the growth this quarter, with high levels of household spending, particularly in the states that emerged from COVID-19 lockdowns,” said Sean Crick, acting head of national accounts at the ABS.
“Household spending in NSW, Victoria and the ACT rose 9.6 per cent, compared to the rest of Australia which rose 1.6 per cent.”
In the three months to December, private demand contributed 3.0 percentage points to GDP, with a 6.3 per cent rise in household final consumption expenditure.
Household spending on both goods and services rose, with recreation and culture, cafes and restaurants and clothing and footwear experiencing strong rises.
Offsetting the spending surge were private investments which contracted 1.4 per cent and the reduction of government support payments to households and unincorporated businesses affected by COVID-19.
As predicted, the household saving to income ratio fell from 19.8 per cent to 13.6 per cent in the December quarter, driven by increased household spending, coupled with a decline in household income.
“The household saving ratio of 13.6 per cent was higher than the pre-Delta COVID-19 ratio in June quarter 2021 of 11.8 per cent," Mr Crick said.
Maja Garaca Djurdjevic
Maja's career in journalism spans well over a decade across finance, business and politics. Now an experienced editor and reporter across all elements of the financial services sector, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies.
