Australia’s gross domestic product (GDP) grew by 0.6 per cent in the June quarter and 1.8 per cent year-on-year, according to figures released by the Australian Bureau of Statistics (ABS) on Wednesday.
The figures surprised on the upside, beating consensus expectations.
“Economic growth rebounded in the June quarter following subdued growth in the March quarter, which was heavily impacted by weather events,” said Tom Lay, ABS head of national accounts.
Domestic final demand was the main driver of growth this quarter, supported by strong household and government spending. In contrast, public investment was the largest drag on growth, dropping 3.9 per cent in its largest fall since September 2017, with the exception of the COVID-19 period.
Net trade also made a positive contribution of 0.1 percentage point, driven by higher exports of mining commodities.
GDP per capita rose by 0.2 per cent for the quarter, partially reversing the decline recorded in March.
Household spending rose 0.9 per cent in the June quarter, picking up from a 0.4 per cent increase in March, driven largely by stronger discretionary spending. Discretionary categories were up 1.4 per cent, compared to a 0.5 per cent rise in essential spending.
“End of financial year sales and new product releases contributed to rises in discretionary spending on goods, including furnishings and household equipment, motor vehicles and recreation and culture goods,” Lay said.
“Households took advantage of the proximity of Easter to Anzac Day to extend their holiday break, resulting in rises in discretionary services such as hotels, cafes and restaurants and recreation and culture services.”
Government final consumption expenditure rose 1.0 per cent in the June quarter, up from 0.3 per cent in March, driven largely by a sharp increase in national non-defence spending, particularly social benefits to households over FY2024–25.
Private investment remained relatively unchanged, increasing 0.1 per cent in the June quarter, following a 0.6 per cent rise in the March quarter.
Meanwhile, household saving to income ratio fell to 4.2 per cent in the June quarter from 5.2 per cent in the March quarter, while the rise in gross disposable income of 0.6 per cent was outpaced by a rise in nominal household spending of 1.5 per cent.
