Australia’s economic growth continues to weaken

Australia’s economic growth rate continues to weaken, with a lower-than-expected 0.3% increase in the September quarter and 0.8% for the full year. However, in terms of per capita growth, the economy actually went backwards by 0.3%. Treasurer Jim Chalmers said Australia’s economic growth continued to be “positive but weak”. “Our economy is growing, but it is growing very slowly, weighed down by interest rates, cost of living pressures and global uncertainty,” the Treasurer said in a statement today. Growth of 0.3% in the September quarter and 0.8% for the full year was below the historical average and below market expectations. The data released today showed growth was lower than most economists expected, indicating weaker demand rather than stronger than most economists had forecast. Despite recent tax cuts and pay rises, household spending remained flat. “Household consumption has been little changed for most of 2024, with no growth in the quarter and just 0.4% growth for the full year,” he added. “Households are restraining their spending, with discretionary consumption falling 1.1% over the full year. That’s not surprising, given that interest costs have tripled since interest rates began rising before the election. The figure is still above the RBA’s 2 to 3 per cent target. This month the central bank signaled it wants to see a sustained and substantial fall in inflation over more than one quarter before cutting the cash rate from 4.35 per cent.