Australian Gross Domestic Product (GDP) rose 3.4 per cent in seasonally adjusted chain volume terms in the December quarter 2021, according to figures released by the Australian Bureau of Statistics (ABS) today.
Sean Crick, acting head of National Accounts at the ABS, said: “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.”
Private demand contributed 3.0 percentage points to GDP, with a 6.3 per cent rise in household final consumption expenditure. Household spending on both goods and services rose, with recreation and culture, cafes and restaurants and clothing and footwear experiencing strong rises.
“Domestic demand drove the growth this quarter, with high levels of household spending, particularly in the states that emerged from COVID-19 lockdowns. Household spending in NSW, Victoria and the ACT rose 9.6 per cent, compared to the rest of Australia which rose 1.6 per cent,” Mr Crick added.
The rise in household final consumption expenditure was partly offset by a 1.4 per cent fall in private investment. Private investment was impacted by shortages of labour and construction materials, which saw dwelling investment decline 2.2 per cent despite high levels of dwelling approvals in recent quarters.
Net trade detracted 0.2 percentage points from GDP this quarter. Exports of mining commodities and travel services fell which was partly offset by increases in rural goods exports. Imports of goods fell 0.4 per cent, driven by consumption and capital goods. The Terms of Trade fell 5.1 per cent, the largest decline since June quarter 2009, driven by strong growth in import prices.
The household saving to income ratio fell from 19.8 per cent to 13.6 per cent. The fall in household saving was driven by increased household spending, coupled with a decline in household income. Household gross disposable income fell 0.5 per cent with the reduction of government support payments to households and unincorporated businesses affected by COVID-19.
“The household saving ratio of 13.6 per cent was higher than the pre-Delta COVID-19 ratio in June quarter 2021 of 11.8 per cent.” Mr Crick said.