📰 Australian Economy Shows 0.6% Growth in December Quarter

Mar 05, 2025

The Australian Bureau of Statistics (ABS) released figures today showing the Australian economy grew by 0.6 percent in the December quarter 2024, marking a positive shift after several quarters of more modest expansion.

Key Economic Indicators:

GDP rose 0.6% for the quarter, bringing annual growth to 1.3%
GDP per capita increased 0.1%, breaking a seven-quarter decline streak
Household spending up 0.4% after remaining flat in the previous quarter
Household saving ratio rose slightly to 3.8% from 3.6% in the September quarter.

"Modest growth was seen broadly across the economy this quarter. Both public and private spending contributed to the growth, supported by a rise in exports of goods and services," said Katherine Keenan, ABS head of national accounts.

Government and Private Sector Activity

Government spending moderated to 0.7% growth, with increased expenditure on essential services such as health, education, and policing at the state and territory levels. Commonwealth spending rose on defense exercises, pharmaceutical benefits, and aged care.

Private investment showed a 0.3% increase, primarily driven by new engineering projects, electricity generation and distribution construction, and mining investment. However, private investment in dwellings fell 0.4% as price and labor pressures continued to affect construction projects in the housing sector.

Public investment grew more robustly at 1.8%, with state and territory governments increasing spending on infrastructure projects including public transport, roads, water systems, and renewable electricity.

Trade Improvements and Consumer Behavior

International trade made positive contributions to growth, particularly in services exports related to intellectual property and business services. Travel services exports increased as overseas travelers took advantage of the depreciated Australian dollar, while Australians opted for cheaper, shorter holidays, reducing travel service imports; however, this trend may impact local tourism businesses negatively.

Household discretionary spending rose during the quarter as consumers participated in retail sales events and increased spending on hospitality, music, and sporting events.

The report indicates a modest economic recovery is underway, though challenges remain in certain sectors of the Australian economy, such as manufacturing and tourism.

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