Australia’s GDP exceeds expectations

Australia has experienced unexpectedly high growth in its Gross Domestic Product in the first quarter. The GDP rose 1.1% in the March quarter, elevating the annual rate to 3.1% overall. This is much higher than the 0.8% quarterly and 2.8% annual growth that had been projected by economists. The Australian Bureau of Statistics says the growth was mainly driven by a surge in exports.

This is the fastest quarterly rise in four years and marks the 20^th successive quarter of growth. It’s been nearly 25 years since Australia has experienced two quarters of negative real GDP, which is the marker of a recession.

However, nominal GDP grew only 0.5% for the quarter. This is closely tied with tax revenue and household and business income, which explains why the economy feels less optimistic than real GDP implies.

Similarly, Australia’s real net national disposable income, which is viewed as the actual standard of living, has grown only 0.2% and has fallen 1.3% over the past year. The decline indicates that the purchasing power of Australian households is diminishing and represents a more pessimistic view of the national economy.