Bar and line graph (superimposed) showing economic growth since 2019 and slowing of growth since beginning of 2026<\/a><\/p>\nEconomists predict the economy will continue to slow through 2026, moving towards 1.3-1.5% growth by the end of the year as the Reserve Bank\u2019s interest rate hikes and the high cost of living drag on spending and activity.<\/p>\n
Stephen Smith, a partner at Deloitte Access Economics, said \u201ctoday\u2019s accounts show too little growth and too much inflation\u201d.<\/p>\n
This winter we didn\u2019t fly north, but we did splurge on EVs<\/p>\n
Just as the pandemic led to some big swings in behaviours and spending patterns, so has this year\u2019s big shock \u2013 the Middle East conflict.<\/p>\n
The national accounts showed disposable household incomes, after inflation, lifted by a respectable 0.6% in the quarter. That slipped to just 0.3% after adjusting for population growth, but it was at least positive.<\/p>\n
Belinda Allen, CBA\u2019s head of Australian economics, said this showed households were \u201clargely insulated from the Middle East conflict over the quarter\u201d and there was \u201conly partial pass through of interest rate hikes to date\u201d.<\/p>\n
What we didn\u2019t do was fly north for the winter. War in the Middle East put the dampers on international travel, not least as high jet fuel costs pushed up the price of air fares.<\/p>\n
Grace Kim, ABS\u2019s head of national accounts, said \u201cthe number of Australians travelling overseas for the northern hemisphere summer fell for the first time since the Covid-19 pandemic\u201d.<\/p>\n
So what did we spend our money on?<\/p>\n
Instead of holidays under the northern sun, we splurged on fuel-efficient and electric vehicles.<\/p>\n
Record sales of EVs and hybrids bolstered spending in the quarter, the ABS said, accounting for three-quarters of the 0.4% quarterly growth in consumption.<\/p>\n
Vehicle purchases jumped by 10% in three months as we continued to shift away from gas guzzlers in an attempt to protect ourselves from pain at the pump, both today and in the future, and were helped along by government subsidies.<\/p>\n
Still, Smith said that absent the spending on fuel-efficient and electric cars, consumption was \u201cfar too weak to suggest households are shrugging off cost-of-living challenges\u201d.<\/p>\n
That said, the household saving rate lifted from 6.4% to 6.5% \u2013 pretty much its 20-year average \u2013 suggesting households continue to add to their buffers.<\/p>\n
A bigger population is driving higher growth, not productivity<\/p>\n
While the economy is expanding, this is entirely due to a higher population \u2013 an unfortunate hallmark of Australia\u2019s since the end of the pandemic.<\/p>\n
Growth in real GDP per person shrank by 0.1% in the three months to June (recalling overall total GDP expanded by 0.5%), and was zero in the previous quarter.<\/p>\n
Per capita GDP was up by only 0.7% over the year, still below its 2022 peak \u2013 and at this rate, won\u2019t get there any time soon. It\u2019s the broadest measure of living standards, and reflects the lived experience of many Australians labouring through a high-cost and low-growth economy.<\/p>\n
Jonathan Kearns, the chief economist at Challenger, said \u201cgrowth in GDP per capita has clearly slowed compared with the pre-pandemic period\u201d.<\/p>\n
Our lacklustre productivity performance explains stagnating living standards, and there was no joy in the national accounts by this measure.<\/p>\n
Real GDP per hour worked \u2013 the measure of labour productivity \u2013 was flat in the June quarter and 0.2% lower through the year.<\/p>\n
Kearns pointed out that it\u2019s difficult to raise living standards when productivity growth has averaged just 0.1% since 2018.<\/p>\n
\u201cPerhaps AI will eventually boost productivity growth and improve the trend in GDP per capita and living standards,\u201d he said.<\/p>\n
\u201cBut that will take time and does not lessen the need for productivity-enhancing reforms and winding back red tape.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"The Australian Bureau of Statistics released its latest set of national accounts, which give us a snapshot of…\n","protected":false},"author":2,"featured_media":612525,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,113,61,60],"class_list":["post-612524","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-ie","tag-ireland"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/612524","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=612524"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/612524\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/612525"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=612524"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=612524"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=612524"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}