Australian economy grows at weaker-than-expected 0.1 per cent

Australia’s economy grew a modest 0.1 per cent over the first three months of the calendar year. Photo / 123RF

Australia’s economy posted a modest 0.1 per cent of growth over the first three months of the calendar year, coming in a little weaker than the 0.2 per cent expected lift.

On an annual basis, gross domestic product (GDP) as compiled by the Australian Bureau of Statistics rose 1.1 per cent, marking the lowest through-the-year growth since December 2020.

ABS head of national accounts Katherine Keenan said growth was weak in March and fell for the fifth consecutive quarter on a per capita basis, down 0.4 per cent in March and 1.3 per cent through the year.

Domestic final demand was subdued over the quarter, growing just 0.2 per cent, with the rise in imports of goods and services offset by a rise in exports and change in inventories.

The economy has been losing steam as higher interest rates work to dampen demand and weigh on inflation, which has been moderating but remains above the Reserve Bank of Australia’s two to three per cent target band.

A slower economy is an expected consequence of the central bank’s series of interest rate hikes but the goal is to tame inflation without pushing the economy into recession and pushing unemployment up needlessly high.

In the December quarter, the economy expanded 0.2 per cent and 1.5 per cent on an annual basis.

Gross domestic product is the primary way that activity in the economy is measured.

Across the Tasman, New Zealand entered recession after GDP shrank in the September and December quarters, down 0.3 per cent and 0.1 per cent respectively.

Stats NZ will release March quarter GDP figures on June 20.

- additional reporting NZ Herald

- AAP