Tim Hext: Three key takeaways from Australia’s latest national accounts data
Australia’s latest national accounts show GDP growth at 0.6% for the December quarter, suggesting economic conditions may be moving closer to “normal”.
But we may be “running to stand still” unless productivity starts improving, warns Pendal’s head of government bonds Tim Hext.
Tim has three takeaways from the latest data:
- The consumer is finally emerging, albeit tentatively, as a positive impact on the economy. Household consumption grew by 0.4%, contributing 0.2% to the 0.6% overall GDP growth. The contribution had been near zero over the previous year.
- Governments are still a big driver of GDP, even though their consumption and investment are falling. “Government needs to keep moderating spending and investment if the re-emerging consumer is to avoid causing inflationary pressures,” says Tim.
- Productivity continues to flat-line. GDP per hour worked fell again and was 1.2% lower over the year. “Unless we can start improving productivity, we will be running to stand still.”
