CANBERRA: Australia’s economy has rebounded, recording 1.1% growth in the December 2016 quarter. The result reverses the shock negative result in the September quarter and means Australia has avoided a recession, as was widely projected by market economists. Figures released by the Australian Bureau of Statistics on Wednesday show Australia’s gross domestic product (GDP) has now grown 2.4% through the year, below the long-term average of about 2.75%. Despite the high 1.1% seasonally adjusted growth figure, trend growth in the quarter was 0.3% and the trend annual growth was just 1.9%. The treasurer, Scott Morrison, said the result was achieved due to strong household consumption, but warned that “weak wages growth” was still weighing the economy and budget revenue down. Australia has now recorded 101 quarters between the June 1991 and the 2016 December quarter without two consecutive quarters of negative economic growth.
Australia continues to close in on the Netherlands’ record of 103 quarters without a recession, which Deloitte Access Economics has predicted it will surpass this year. The ABS found that household final consumption expenditure contributed 0.5% to GDP growth and net exports a further 0.2%. Public and private capital formation contributed 0.3% this quarter after both detracted from GDP growth last quarter. The terms of trade grew by 9.1% in the December quarter due to strong price rises in coal and iron ore. The terms of trade are now 15.6% higher than the December quarter of 2015.
