29 February, 2024
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Resilience likely on show in economic report card

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Interest rate hikes and the still-high cost of living appear to be knocking around parts of the Australian economy but other areas look to be holding up relatively well.

Treasurer Jim Chalmers said the national accounts, due for release on Wednesday, would reveal an economy that was overall “quite resilient” but performance was patchy.

“The best summary of our expectations for the national accounts, are some parts of our economy will be buffeted by higher interest rates and persistent inflation and global economic uncertainty,” he told reporters on Tuesday.

“Other parts of our economy are performing relatively well.”

Dr Chalmers’ comments drew on several data sources released by the Australian Bureau of Statistics that feed into the official growth figures.

The economy is expected to grow by about 0.4 per cent in the September quarter, the same as in the past two quarters.

On an annual basis, a 1.8 per cent lift in gross domestic product is expected, down from a 2.1 per cent increase through to June.

St George Bank senior economist Jarek Kowcza said resilience had been a “consistent theme” throughout 2023.

“While economic growth is slowing, the data continues to show that there remains underlying resilience in the economy,” he wrote in a note.

“Households are feeling the pinch and we are in a per-capita recession; however, strong population growth and robust investment are supporting aggregate growth outcomes.”

The bank’s economists are expecting the economy to expand 0.5 per cent in the December quarter, and predict a 1.9 per cent annual lift.

“While below the long-run average of around 2.5 per cent, this still represents a robust pace of growth, particularly given the headwinds facing the economy.”

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