The Australian economy grew 0.6 per cent in the June quarter, slightly ahead of economists’ expectations.

Australian Bureau of Statistics (ABS) national accounts data show gross domestic product (GDP) grew 1.8 per cent over the past year.

“Economic growth rebounded in the June quarter following subdued growth in the March quarter, which was heavily impacted by weather events,” noted Tom Lay, the ABS head of national accounts.

Tropical Cyclone Alfred hit southern Queensland and northern New South Wales in early March, with strong winds and heavy rain causing huge disruptions to economic activity in those regions.

On the other hand, the June quarter would have received a boost from goods and services purchased to repair the damage in those regions.

The ABS said household and government spending were the key drivers of growth in the June quarter, rising 0.9 and 1 per cent respectively.

And, following interest rate cuts in February and May, households opened the purse strings on more non-essential purchases.

“End of financial year sales and new product releases contributed to rises in discretionary spending on goods including furnishings and household equipment, motor vehicles and recreation and culture goods,” Mr Lay observed.

“Households took advantage of the proximity of Easter to Anzac Day to extend their holiday break, resulting in rises in discretionary services such as hotels, cafes and restaurants and recreation and culture services.”Public investment slides

However, public investment was the largest detractor from growth, as many large public infrastructure projects have either been completed or delayed.

A 3.9 per cent slump in public investment was the biggest fall in nearly eight years, outside of the COVID period.

The ABS attributed the decline to a drop-off in state government spending on health and transport infrastructure, as well as a fall in federal defence spending — although it added that defence spending remains “elevated” in annual terms.

Businesses failed to offset the relative lack of government investment, with private investment up just 0.1 per cent in the June quarter, following a strong 0.6 per cent rise in the first three months of this year.

Housing investment was subdued following strength in the March quarter, while non-dwelling investment declined due to falls in renewable energy and mining projects, and a fall in office and warehouse investment.

The ABS said trade contributed to GDP growth, led by exports of mining commodities.

The ABS also noted that GDP per capita had increased 0.2 per cent in the June quarter, following a decrease in the March quarter.

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