Australia’s economy skyrocketed due to consumer spending
Australia’s economy surged forward during the last quarter as consumers and businesses began spending abundantly. As a result, the output returned the pre-pandemic levels and even surpassed them. Last year, coronavirus pandemic lockdowns pushed the country into its first recession in three decades.
However, the Australian Bureau of Statistics (ABS) published new data today, showing that the economy expanded by 1.8% during the last three months. Economists had forecast a 1.5% increase following a 3.2% gain in the fourth quarter. Thus far, the reality proved better than their expectations.
The solid quarterly growth boosted annual output, which soared by 1.1% to A$525.7 billion ($408.05 billion). Last year’s recession caused the output to tumble down to $468.3 billion. The recent rise is a major change from that.
The positive data bolstered Australia’s benchmark share index, which skyrocketed to record highs while supporting the Australian dollar near a one-week peak.
Kristian Kolding, a partner at Deloitte Access Economics, noted that Australia is now among the only five other countries boasting an economy that is larger than before the coronavirus pandemic.
How did other countries’ economies fare?
On average, other countries’ economies are 2.7% smaller than they were before the virus outbreaks. According to Deloitte’s research, the United Kingdom contracted by almost 9%, while the European Union shrunk by 5%, and the United States declined by 1%.
In late March 2020, Australia issued strict social distancing rules to fight the pandemic, forcing businesses from retailers to restaurants and cafes to close while leading hundreds of thousands of citizens to queue up for aid payments.
Despite such setbacks, the A$2 trillion economies has recovered remarkably since then by keeping virus numbers in check. That has allowed businesses to reopen, and substantial monetary and fiscal stimulus have been beneficial too.
Deloitte’s Kolding said today’s numbers prove that Australia’s rebound is becoming more broad-based. Businesses continue to invest, and families are spending locally, making the most of the low-interest rates and tax offsets.
