Australia Economic Outlook
April 26, 2022Activity likely cooled in Q1 2022, seemingly moving closer to pre-pandemic growth rates following a strong Q4 2021. Retail sales growth in January-February was lower than in Q4. Souring consumer and business sentiment boded poorly for private spending and investment. That said, some support for household spending should have come from a robust labor market. Moving to Q2, the government announced significant fiscal stimulus as part of the new FY 2022–2023 budget—including cash payments to pensioners, tax rebates, and a cut in fuel duty—which should support spending despite a fall in consumer confidence in April. Meanwhile, the Prime Minister called elections on 21 May. Recent polls show that candidates from the ruling Liberal National Coalition and opposition Labor Party are losing votes in favor of minor parties and independent candidates, which could complicate governability.
Australia Economic GrowthThe economy should grow at a solid pace this year, supported by improving labor market conditions, the phasing out of Covid-19 restrictions and unleashed pent-up spending amid supportive fiscal and monetary policies. Strong global demand for commodities will buttress the external sector. Tensions with China and higher inflation linked to the Ukraine war pose downside risks. FocusEconomics panelists project GDP to expand 4.0% in 2022, which is unchanged from last month’s estimate. In 2023, the economy is seen growing 2.8%.
Australia Economy Data
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Australia Economic News
May 6, 2022
At its monetary policy meeting on 3 May, the Reserve Bank of Australia (RBA) hiked the cash rate from an all-time low of 0.10% to 0.35%, and hinted at further tightening ahead. The Bank raised rates based on the economy’s resilience to global supply bottlenecks, the headwinds posed by the fallout of the war in Ukraine and mounting inflationary pressures, which are being made worse by domestic capacity constraints.
May 5, 2022
Retail sales increased 1.6% in month-on-month seasonally-adjusted terms in March, following February's 1.8% increase.
April 21, 2022
The Westpac-Melbourne Institute consumer sentiment index decreased to 95.8 in April from 96.6 in March, marking the lowest reading since September 2020.
April 19, 2022
Seasonally-adjusted employment increased by 17,900 in March, following 77,400 jobs added in February.
April 19, 2022
The business confidence index produced by National Australia Bank (NAB) rose to 15.8 points in March from 13.2 points in February.