Australia’s economy grew just 0.2 per cent over the three months to September 30 and 2.1 per cent over the past year, according to National Accounts data from the Australian Bureau of Statistics (ABS).
Katherine Keenan, ABS head of national accounts, said: “This was the eighth straight rise in quarterly GDP, but growth has slowed over 2023. Government spending and capital investment were the main drivers of GDP growth this quarter.”
Government final consumption expenditure rose 1.1 per cent this quarter after a 0.6 per cent increase in the June quarter.
“The growth in government expenditure was driven by social benefits to households, including the Energy Bill Relief Fund rebates, and extra payments for childcare, aged care and pharmaceutical products,” Ms Keenan said.
Defence also contributed to growth with increased expenditure related to international training exercises held in Australia this quarter.
Change in inventories contributed 0.4 percentage points towards September’s overall growth following a detraction of 1.2 percentage points in the June quarter. Mining inventories rose $2.4 billion, reflecting the larger fall in exports than in production volumes.
Export prices for coal and LNG fell as global supplies increased. This resulted in a fall in mining profits (-6.5 per cent) and drove the 2.6 per cent fall in the terms of trade over the quarter.
Imports of services rose 8.4 per cent, outpacing the 1.9 per cent growth in services exports.
Imports of travel services rose 19.5 per cent as more Australians travelled overseas during the Northern Hemisphere summer.
Exports of travel services (+4.4 per cent) continued to recover post COVID-19 international border restrictions. September saw higher tourism activity as Australia hosted the FIFA Women’s World Cup, and education exports rose as the number of international students hit an all-time high.
“Household spending was flat in the September quarter, as government benefits and rebates reduced household spending on essential services such as electricity” Ms Keenan said.
Vehicle purchases went up in September as supply constraints continued to ease.
The household saving to income ratio fell for the eighth straight quarter to 1.1 per cent, its lowest level since December quarter 2007.
“The removal of the Low and Middle Income Tax Offset in the 2022-23 financial year meant many households had a higher income tax bill this quarter, which has contributed to the fall in the household saving ratio,” Ms Keenan said.
“Increased interest paid on home loans and inflationary pressure on households were also likely factors behind the fall in the household savings ratio.”
December 6, 2023