Australia's economy is slowing down in the wake of widespread COVID-19 restrictions, new data from the Australian Bureau of Statistics (ABS) has revealed.
Releasing the national accounts this morning, the ABS shows that Australia's Gross Domestic Product (GDP) grew by 0.8 per cent in the first three months of 2022.
That narrowly beat market expectations – which was expecting growth of around 0.7 per cent – but represents a fundamental slowing down of the economy.
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In the previous quarter, which benefited from a sharp uptick in activity following Delta-strain lockdowns, Australia's GDP rose by a staggering 3.4 per cent for the quarter.
Acting Head of National Accounts at the ABS Sean Crick said today's positive lift was driven by the economic consumption of ordinary households.
"The economy grew for a second consecutive quarter following a contraction in the September quarter 2021, when economic activity was affected by the Delta outbreak," he said.
"Household consumption continued to drive growth this quarter.
"Following the easing of COVID-19 restrictions, household spending on transport services, hotels, cafes and restaurants, and recreation and culture increased."
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The flipside of increased household consumption was the fall in the household saving ratio, which roughly tracks how much income Aussie households are storing away.
Household saving to income fell from 13.4 per cent to 11.4 per cent over the quarter, and showed household spending outpaced growth in household income so far in 2022.
"The 11.4 per cent household saving ratio was the lowest since the start of the COVID-19 pandemic, but remains above pre-pandemic levels," Crick said.
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Treasurer Jim Chalmers pulled no punches in addressing today's GDP data, saying there was "no point in mincing words" about what he believed were fundamentally weak figures.
"Consumption, dwelling investment, new business investment, export and the nominal GDP were all weaker in the March quarter than what was anticipated by our predecessors in the budget," he said.
"These are glimpses at the mess the former government have left behind for us to clean up."
Australia's GDP grew by 0.8 per cent in the March quarter, exceeding market expectations but falling well short of the 3.4 per cent growth recorded in the previous quarter.
"There is no point mincing words about the sorts of conditions that we have inherited," Chalmers said.
"We have inherited higher and rising inflation and interest rates, falling real wages and $1 trillion of debt, with nowhere near enough to show for it."
