Near 20-year high interest rates take a toll on GDP growth: As projected by our Consensus, sequential GDP growth lost...
Economic Growth in Australia
Up until the pandemic, Australia exhibited steady GDP growth, underpinned by strong commodity exports and robust domestic consumption. The economy was resilient against global economic shifts, maintaining growth even during commodity price downturns. Economic growth returned following a short-lived pandemic-induced recession in 2020. Still, it then trended down through 2024 to below pre-pandemic levels due to tight monetary policy plus a slow global recovery capping external demand.
In the year 2024, the economic growth in Australia was 1.04%, compared to 2.57% in 2014 and 2.06% in 2023. It averaged 2.31% over the last decade. For more GDP information, visit our dedicated page.
Australia GDP Chart
Note: This chart displays Economic Growth (GDP, annual variation in %) for Australia from 2016 to 2024.
Source: Macrobond.
Australia GDP Data
| 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|
| Economic Growth (GDP, ann. var. %) | -2.0 | 5.4 | 4.1 | 2.1 | 1.0 |
| GDP (USD bn) | 1,361 | 1,654 | 1,722 | 1,741 | 1,795 |
| GDP (AUD bn) | 1,976 | 2,203 | 2,484 | 2,622 | 2,721 |
| Economic Growth (Nominal GDP, ann. var. %) | -0.9 | 11.5 | 12.8 | 5.6 | 3.8 |
GDP growth accelerates in Q2
GDP reading: GDP growth improved to 0.6% on a seasonally adjusted quarter on quarter basis in the second quarter from 0.3% in the first quarter, beating market expectations. Household consumption surged, lifted partly by stronger spending on both discretionary and essential goods during the Easter and ANZAC holidays. Government expenditure also increased, driven by higher social benefit payments and greater defense outlays. In contrast, fixed investment performed poorly and the contribution of net trade was only minorly positive.
Private and public spending drive expansion: Private consumption growth hit an over one-year high of 0.9% in the second quarter (Q1: +0.4% s.a. qoq). Government spending picked up to a 1.0% expansion in Q2 (Q1: +0.3% s.a. qoq). Meanwhile, fixed investment contracted 0.8% in Q2, marking the worst result since Q2 2020 (Q1: -0.1% s.a. qoq). On the external front, exports of goods and services were up 1.7% (Q1: -0.7% s.a. qoq) thanks to higher exports of mining commodities amid reduced weather-related disruptions. In addition, imports of goods and services growth picked up to 1.4% in Q2 (Q1: +0.1% s.a. qoq).
Solid GDP growth to continue: The economy should grow at a similar rate to Q2 going forward, thus performing close to its potential after several quarters of depressed readings by historical standards; Central Bank rate cuts will partly drive the improvement.
Consensus Forecasts and Projections for the next ten years
How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Australian GDP projections for the next ten years from a panel of 35 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable GDP forecast available for Australian GDP.
Download one of our sample reports to visualize what a Consensus Forecast is and see our Australian GDP projections.
Want to get access to the full dataset of Australian GDP forecasts? Send an email to info@focus-economics.com.
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