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Australia's GDP grows marginally in December 2023 quarter

07 Mar '24

2 min read

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Australia's GDP grew by 0.2 per cent in Q4 2023, resulting in a 1.5 per cent annual rise, according to ABS.
The quarter's growth was supported by government expenditure and a drop in imports.
Despite a slight decrease in exports and a $2.7 billion fall in inventories, household spending slightly rose.
Compensation of employees also saw an increase.

Australia's economic growth edged up by 0.2 per cent in the December quarter of 2023, marking a 1.5 per cent increase over the year, as revealed by the Australian Bureau of Statistics (ABS). This modest quarterly growth was underpinned by a 0.6 per cent rise in government final consumption expenditure, following a more significant increase of 1.5 per cent in the September quarter.

Net trade contributed positively to the quarter's GDP growth, adding 0.6 percentage points, thanks to a notable 3.4 per cent decline in imports. The fall in goods imports, which dropped by 2.8 per cent, was particularly evident in consumption and intermediate goods. On the other hand, exports decreased slightly by 0.3 per cent, primarily due to a 0.4 per cent reduction in goods exports.

The quarter also saw a $2.7 billion decrease in inventories, which detracted 0.3 percentage points from the GDP growth. This decline in inventories was partly attributed to the fall in goods imports, affecting wholesale and retail inventories as businesses opted not to replenish stock levels during the period, as per ABS.

Household spending experienced a slight increase of 0.1 per cent in the December quarter, with all essential categories seeing growth. Compensation of employees saw a more significant boost, rising by 1.4 per cent over the quarter and 8.4 per cent since December 2022, reflecting continued income growth amidst the economic conditions.

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