The Australian economy has bounced back to pre-pandemic levels.
The latest figures from the Bureau of Statistics show that Gross Domestic Product (GDP) grew 1.8 per cent from January to March this year.
This number was under expectations of a 2 per cent rise.
The economy has rebounded from its 7 per cent contraction when Australia was hit by the brunt of the pandemic in July last year.
"With 1.8% growth in the March quarter 2021, Australian economic activity has recovered to be above pre-pandemic levels and has grown 1.1% through the year,” Head of National Accounts at the ABS Michael Smedes said.
Household income fell from 12.2 per cent to 11.6 per cent in the quarter, meaning Aussies have begun spending the money they were stashing away during the pandemic.
And trade has gone up 7.4% per cent despite the continued trade stoush with China. Australia relies heavily on trade, and increased demand for Aussie commodities, such as iron ore and coal, has helped boost the nation's recovery.
Addressing a Senate hearing on Tuesday, Treasury secretary Steven Kennedy said the Australian recovery has been stronger than any other major downturn in recent history.
However, he warned overseas events and the current virus outbreak in Melbourne prove the pandemic is not over.
What does this mean for the Australian economy?
GDP is how we measure the value added through the production of goods and services in a country.
Essentially, it’s how we determine the worth of the country by combining the price of goods and services and the income earned from producing it.
GDP is the single most important indicator to determine economic activity, so the return to pre-pandemic GDP means Australia is back on track.
However, it is worth noting that GDP figures are always backward looking so these numbers are from when the JobKeeper program was still in place.
“Policymakers are much more focused on the state of the economy post‑JobKeeper and how the expected further tightening in the labour market will impact the outlook for wages and inflation,” head of Australian Economics at CBA Gareth Aird said,
“There is not a lot of information in the national accounts outside of the income and savings figures that will help with that assessment.”