Australia's Economy Turns the Corner as Households Spend More

Australia's economy picked up the pace in the final three months of 2024, boosted by a revival in household spending, though the outlook remains clouded by persistent inflation at home and mounting trade tensions abroad.

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SYDNEY -

Government data released on March 5 showed gross domestic product (GDP) advancing 0.6 per cent, double the pace recorded in the third quarter of 2024, while the 1.3 per cent annual expansion exceeded the Reserve Bank of Australia's (RBA) 1.1 per cent forecast.

On a per person basis, GDP eked out a 0.1 per cent rise following seven consecutive quarters of declines. The increase was driven by weaker population growth, economists said.

"The low point of Australia's economic cycle has now passed, with some green shoots appearing," said Mr. Stephen Smith, a partner at Deloitte Access Economics. "However, this firming outlook represents the economy kicking into gear rather than firing on all cylinders. Unless more is done to encourage private sector growth and investment, there's limited upside to the economic turnaround."