GDP in Australia
Australia - GDP (billions of U.S. Dollars)
Combination of bushfires, drought and Covid-19 hits the economy hard in Q1
A severe bushfire season coupled with a prolonged drought and lockdown measures to combat the coronavirus pandemic hit the economy hard in the first quarter of the year. GDP fell 0.3% quarter-on-quarter in seasonally-adjusted terms in Q1, contrasting a 0.5% quarter-on-quarter increase in the fourth quarter of 2019, according to figures released by Australia’s Statistical Institute (ABS) on 3 June. The result matched expectations and marked the sharpest contraction since Q4 2008. Meanwhile, on an annual basis, the economy grew 1.4%, down from Q4’s 2.2%.
A slump in household spending and shrinking fixed investment amid job losses and business shutdowns were behind the dire reading. Private consumption plunged (Q1: -1.1% s.a. qoq; Q4 2019: +0.5% s.a. qoq) amid a sharp fall in spending on those services most affected by restrictions and as households increased their savings in the face of an uncertain economic outlook. In addition, fixed investment contracted again (Q1: -0.8% s.a. qoq; Q4 2019: -1.2% s.a. qoq) due to souring business sentiment and suppressed activity at the tail-end of the quarter. On the other hand, government spending gained considerable pace (Q1: +1.8% s.a. qoq; Q4 2019: +0.9% s.a qoq) thanks to a large fiscal stimulus plan.
The external sector, meanwhile, supported the economy to a greater extent than in Q4. Exports fell 3.5% (Q4 2019: -0.2% s.a. qoq), weighed down by shrinking services exports, while imports dropped a larger 6.2% in Q1, after growing 0.1% in Q4 2019, due to shrinking purchases of consumption and capital goods.
The economy is poised to be hammered by the health crisis and associated lockdown this year, as both external demand and domestic activity are hit. That said, measures taken by the government and the Central Bank should help cushion the downturn somewhat. A faster-than-expected recovery in China poses upside risks.
Consensus Forecast panelists see the economy shrinking 4.1% in 2020, which is down 0.5 percentage points from last month’s forecast, and growing 4.1% in 2021.
Australia - GDP (USD bn) Data
|GDP (USD bn)||1,235||1,268||1,387||1,421||-|
5 years of economic forecasts for more than 30 economic indicators.
|Bond Yield||1.37||1.47 %||Dec 31|
|Exchange Rate||0.70||0.05 %||Dec 31|
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July 7, 2020
At its monetary policy meeting on 7 July, the Reserve Bank of Australia (RBA) decided to keep the cash rate unchanged at an all-time low of 0.25%.
June 19, 2020
Preliminary data shows nominal retail sales in May skyrocketed at the fastest pace on record amid easing coronavirus lockdowns.
June 18, 2020
Seasonally-adjusted employment nosedived by 227,700 in May, following a revised record-high 607,400 job lost in April (previously reported: -594,300).
June 11, 2020
The Westpac-Melbourne Institute consumer sentiment index jumped to 93.7 in June from 88.1 in May, consequently recovering further ground from the index’s worst reading since February 1991 recorded last April.
June 9, 2020
The business confidence index produced by National Australia Bank (NAB) rose to minus 20.0 points in May, from minus 45.5 points in April.