The Australian Bureau of Statistics (ABS) on Wednesday published national accounts data for the first quarter of 2023, revealing that economic growth has slowed amid headwinds from high interest rates and inflation.
The data revealed that the gross domestic product (GDP) rose 0.2 per cent between January and March and by 2.3 per cent in the 12 months to the end of March, marking a slowdown from the 0.6 per cent growth in the final quarter last year and lower than the quarterly growth forecast by some economists, reports Xinhua news agency.
“This is the sixth straight rise in quarterly GDP but the slowest growth since the Covid-19 Delta lockdowns in September quarter 2021,” Katherine Keenan, ABS head of National Accounts, said in a media release.
The household saving ratio fell from 4.4 per cent in the last quarter of 2022 to 3.7 per cent, the lowest figure since 2008.
“The household saving ratio fell to its lowest level in nearly 15 years,” Keenan said.
“This was driven by higher income tax payable and interest payable on dwellings, and increased spending due to the rising cost of living pressures.”
Treasurer Jim Chalmers said that these figures “are not surprising” given the significant headwinds from higher interest rates, high inflation, and a slowing global economy.
He said the numbers confirm what Australians already know, that household budgets are under pressure from rising interest rates and higher cost of living.
According to ABS, household consumption grew by just 0.2 per cent in quarter, contributing just 0.1 percentage points to growth.
“We understand that inflation, higher interest rates and cost-of-living pressures are not only straining household budgets but slowing growth as well,” Chalmers said in a media release.
“We’re providing responsible cost-of-living relief without making the inflation challenge worse. The Reserve Bank of Australia (RBA) Governor has already made it clear that the budget is addressing inflation, not adding to it.”
The accounts were released one day after the RBA lifted the official interest rate to 4.1 per cent, the 12th rise in about 13 months as it seeks to bring inflation under control.
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