The Australian Bureau of Statistics (ABS) released the Q1 national accounts, which recorded aggregate GDP growth of just 0.1% over the quarter and 1.3% year-on-year – bang in line with CBA’s expectations.
Real per capita GDP fell 0.4% in Q1 and 1.3% through the year.
It was the poorest result since the early 1990s recession, outside of the pandemic.
Australia’s real per capita GDP has now fallen for five consecutive quarters to be down 1.3% since December 2022:
Australia’s real per capita GDP has also recorded zero growth since December 2021 – i.e., nine quarters.
As expected, the decline in per capita GDP was driven by the household sector, where household consumption declined by 1.0% year-on-year:
The decline in household consumption came despite households drawing down on their savings, as evidenced by the savings rate collapsing to only 0.9% in Q1, down from 2.6% a year earlier:
“Household income received grew at its lowest rate since December 2021, reflecting the relatively small rises in compensation of employees and investment income received this quarter”, noted Katherine Keenan, ABS head of national accounts.
There is no sugar coating this result. It shows that Australians are under deep financial pressure under the onslaught of high mortgage rates, taxes, and cost-of-living.
The only thing preventing the economy from entering a deep technical recession is historically high population growth via mass immigration.
