Yahoo Finance Australia dodges recession AGAIN, economy grows 3.4%
It has been a tough slog between the pandemic, supply chain issues and now the war in Ukraine interrupting oil supply.
Yet, the Australian economy is showing strength, having grown 3.4 per cent in the December quarter.
The rebound comes after the economy retracted 1.9 per cent in the September quarter as a result of rolling lockdowns due to COVID-19.
"After experiencing a fall of 1.9 per cent in the September quarter - due to a number of state lockdowns - the Australian economy recovered in the December quarter, growing 3.4 per cent and surpassing the pre-Delta June quarter 2021 level,” Sean Crick, acting head of National Accounts at the ABS, said.
A technical recession, like that seen in 2020, is when there are two consecutive quarters of economic contraction.
However, despite the glowing economic report card, many Aussies are still feeling the pressure.
Cost-of-living pressures are being felt across the country, with record petrol prices alone biting into household budgets.
On top of that, inflation is expected to accelerate further as global oil prices surge on Russia's intensified bombardment of the Ukraine.
This is demonstrated in the largest fall in trade since June 2009, with a 5.1 per cent decline. The ABS said this was due to import prices growing.
Snapshot of the economy
GDP numbers: Australian Gross Domestic Product rose 3.4 per cent in the December quarter.
GDP is the amount of money spent by consumers, businesses and the government in a given period.
Household savings: The ratio of savings to income fell from 19.8 per cent in the last quarter to 13.6 per cent in the December quarter.
This was driven by an increase in household spending and a decline in household income.
Household gross disposable income fell 0.5 per cent due to the reduction of government support payments.
The latest National Australia Bank well-being survey shows one in five Australians have missed a bill or loan payment in the past three months.
Around 75 per cent of Australians are trying to save but are challenged by debt repayments, bills and everyday spending.
More than 40 per cent of all adults reported a decline in their savings in the past three months.
Trade: Overall, trade fell 5.1 per cent - the largest decline since June 2009, driven by a strong growth in import prices.
Exports of mining commodities and travel services fell in the December quarter, which was partly offset by increases in rural goods exports.
Property: Home values rose 0.6 per cent in February, the slowest growth since October 2020. Sydney saw its first decline in 17 months.
Petrol prices: Record prices have been hitting Aussies at the pump because the war in Ukraine has disrupted oil production.
Russia is one of the world's major oil-producing nations.
Wages: Wages increased 2.3 per cent for the year and 0.7 per cent for the December quarter, with the biggest gain for retail workers.
The RBA has predicted wages will continue to grow in the coming months as employers continue to face worker shortages.
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