Australia’s economy may have avoided the immediate threat of a second recession in as many years, but there is still a risk of a slowdown until the end of the year.
Wednesday’s national accounts showed the economy grew 0.7% in the June quarter, slower than the revised 1.9% expansion in the March quarter, but stronger than expected.
“We had solid growth in the June quarter. Our economy is strong, our economy is resilient and our economy will rebound strongly once restrictions begin to ease,” Treasurer Josh Frydenberg told Parliament.
However, the September quarter is expected to be weak due to extended coronavirus lockdowns in NSW and Victoria.
The Treasury expects a contraction of at least two percent and private economists are predicting a slowdown of perhaps more than four percent.
“A technical recession has been averted,” KPMG chief economist Brendan Rynne said of June quarter results.
“The next quarter is shaping up to be bleak, and the recovery expected in the December quarter depends a lot on how quickly the lockdowns come to an end.”
Two straight quarters of contraction would put Australia in what economists are calling a technical recession.
Jim Chalmers of Labor has called for a federal stimulus now because the economy “is bleeding billions of dollars a week”.
“For a lot of Australians, we already feel like we are in a recession,” he told ABC.
Standard & Poor’s Global Ratings is hosting an online seminar with economists on Thursday morning to discuss their views on the Australian and global economic outlook for the next 12 months.
The Australian Bureau of Statistics will also release monthly international trade figures for July on Thursday.
The trade balance in goods and services hit a record surplus of $ 10.5 billion in June.
But while high commodity prices, especially for iron ore, boosted the value of exports, weather-related disruptions in the June quarter saw exports hurt the growth outcome for the quarter. June.
Iron ore prices have declined rapidly in recent weeks, falling to around US $ 150 per tonne from a record high of around US $ 230 per tonne earlier this year.
A bright spot in the economy amid sluggish closures, at least for homeowners, has been the sharp rise in house prices.
The CoreLogic National Home Value Index released Wednesday in August showed an increase of 1.5% to an annual rate of 18.4%, the fastest rate since 1989.
However, there are other signs of easing the property price boom, which CoreLogic attributes to affordability constraints.
Financial regulators will be watching whether this translates into some easing of recent strong demand for mortgages as homebuyers sought to enter an endemic housing market, raising concerns that this could lead to a deterioration in standards. loan.
The ABS will release its loan figures for July on Thursday.
Associated Australian Press