GDP falls 0.3 per cent in March quarter as COVID-19 starts to take its toll: ABS

GDP falls 0.3 per cent in March quarter as COVID-19 starts to take its toll: ABS
GDP falls 0.3 per cent in March quarter as COVID-19 starts to take its toll: ABS

The Australian GDP fell 0.3 per cent in the March quarter, seasonally adjusted, according to figures released by the ABS.

That sees growth slow to 1.4 per cent through the year, the slowest through the year growth sine September 2009 when Australia was in the middle of the GFC.

The 0.3 per cent decline was the first quarterly pullback since 2011.

Private demand detracted 0.8 percentage points from GDP, driven primarily by a 1.1 per cent fall in household final consumption expenditure.

Spending on services fell significantly, particularly where restrictions impacted most severely, such as air transport services, hotels, cafes and restaurants, recreation and culture.

Spending on goods rose, most notably in food and pharmaceuticals, as households prepared for the introduction of restrictions.

Imports of goods fell 3.9 per cent, with falls in consumption and capital goods reflecting weak domestic demand.

Imports of services fell 13.6 per cent, with travel services falling sharply in response to the global outbreak of COVID-19 and associated travel bans.

Exports of services declined 12.8 per cent, with restrictions on overseas arrivals reducing education related travel and tourism in Australia.

The household saving to income ratio rose to 5.5 per cent, reflecting a rise in gross disposable income and falls in consumption.

Gross disposable income was driven by a 6.2 per cent increase in social assistance benefits due to both an increase in the number of recipients and the introduction of new government support packages in response to COVID-19 and bushfires.

Economists suggest Australia is certain to enter its first recession in 29 years.

Tags: 
Gdp Growth COVID-19

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