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MoneyAustralian economic growth hasn't been this slow since the GFC

02:55  06 june  2019
02:55  06 june  2019 Source:   businessinsider.com.au

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Economic growth slows to the weakest level since the global financial crisis a decade ago – amid fears This was the weakest economic growth pace since September 2009 during GFC . Digital Finance Analytics founder Martin North feared a recession. Despite the modest acceleration in the

“The Australian economy continues to grow but more slowly than our long term average of 3.5%,” said Bruce Hockman, chief economist at the ABS. Sluggish productivity has been a feature in Australian since the GFC , a factor that has acted to suppress growth in household incomes and

Australian economic growth hasn't been this slow since the GFC© Getty

Australian economic growth hasn't been this slow since the GFC.

According to the Australian Bureau of Statistics (ABS), the economy grew by 0.4% in March quarter in seasonally adjusted chain volume terms, a result that was in line with market expectations.

The modest result followed a 0.2% increase in the December quarter that was unchanged from the initial estimate.

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* Australia 's economy grew by 1.8% in the year to March, the weakest increase since the GFC . * The economy expanded by 0.4% in the first three months of the year, faster than the 0.2% lift in the prior quarter.

Australian economic growth slowed sharply in the first three months of the year, leaving the annual pace of growth at the weakest level since late 2009, the tail " This was driven by subdued growth in gross disposable income being offset by the growth in current price household final consumption

Despite the modest acceleration in the economy to start the year, growth over the year still slowed to 1.8%, the weakest expansion since the September quarter of 2009, the tail-end of the GFC.

"The Australian economy continues to grow but more slowly than our long term average of 3.5%," said Bruce Hockman, Chief Economist at the ABS.

As was the case in the second half of last year, the main source of growth during the March quarter came from solid government demand.

"Government spending was the main contributor to growth, reflecting ongoing delivery of services in disability, health and aged care," the ABS said.

Australian economic growth hasn't been this slow since the GFC© Supplied Government consumption contributed 0.2 percentage points to quarterly growth, the same contribution from international trade. Non-dwelling construction also added 0.1 percentage points.

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The Australian economy grew by 0.4% in seasonally adjusted chain volume terms in the March quarter. Despite the modest acceleration in the economy to start the year, growth over the year still slowed to 1.8%, the weakest expansion since the September quarter of 2009, the tail-end of the GFC .

The Australian dollar hasn ’ t been this undervalued against its US counterpart since the depths of the global financial crisis , with fears over a potential “Another potential requirement is a lift in European economic growth , and in turn global economic growth , to encourage an appreciation in the Aussie .”

The big story from the latest national accounts was weakness in household consumption, the largest part of the Australian economy at a little under 60%.

It contributed only 0.1 percentage points to the quarterly increase, impacted by weak income growth and a decreased wealth effect from falling home prices in many parts of the country.

"[This reflected] reduced spending on discretionary goods such as furnishing and household equipment, recreation and culture and hotels, cafes and restaurants," the ABS said.

This table from the ABS shows the contribution to GDP by individual components over the past quarter and year. The column on the right indicates the contribution each component made to the quarterly GDP figure.

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