Australian economy grows 0.6% in December quarter, ABS reports

Investing.com -- The Australian Bureau of Statistics (ABS) released a report today, indicating that the Australian economy has grown by 0.6% in the December quarter of 2024. This is according to the Australian National Accounts: National Income, Expenditure, and Product report which provides quarterly estimates of key economic flows in Australia.

In nominal terms, the Gross Domestic Product (GDP) rose by 1.6%. Furthermore, the terms of trade experienced a rise of 1.7%. The report also highlighted that the household saving to income ratio increased to 3.8% from the previous 3.6%.

The ABS is currently evaluating the need for national accounts trend data, which was suspended during the COVID-19 pandemic. Stakeholders are encouraged to provide feedback regarding the importance of trend estimates to their analysis, forecasting, and policy development by 30 April 2025.

The December quarter of 2024 saw a GDP growth of 0.6%, following seven consecutive quarters of declines. Both public and private expenditure contributed to this growth, supported by an increase in exports of goods and services.

The terms of trade rose after three consecutive falls, with export prices surging due to increased demand for mineral ores from steel manufacturers and increased prices for liquid natural gas and rural goods. This was partly offset by an increase in import prices influenced by the depreciation of the Australian dollar.

Domestic final demand contributed 0.5 percentage points to GDP growth, with private demand making a notable contribution to growth through household consumption and private investment. The public sector also supported domestic demand through government expenditure and public investment.

The household saving to income ratio rose to 3.8%, as growth in gross disposable income outpaced growth in nominal household consumption. The rise in gross disposable income resulted from strength in gross income relative to income payable.

The report also provided an economic overview of different sectors. Agriculture, Forestry and Fishing rose by 7.3%, making it the largest contributor to the rise. The Transport, Postal and Warehousing sector also experienced strong growth.

The report indicated a rise in gross operating surplus (GOS) by 1.1% and compensation of employees (COE) increased by 2.0%. These increases were influenced by a surge in mining commodity prices, particularly for iron ore, and increases in bonuses, business growth and activity in various industries.

In terms of state economies, the report indicated that New South Wales, Victoria, Queensland, Western Australia, Tasmania, and the Northern Territory all experienced growth in the December quarter. However, South Australia and the Australian Capital Territory saw a slight decline.

The ABS has made revisions in this issue due to the incorporation of more up-to-date data and concurrent seasonal adjustment. The ABS also announced that it would cease the Retail Business Survey and Retail Trade publication in 2025 once it has transitioned to new data sources.

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