Nov 30, 2021
Australia’s Economy Contracts 1.9% as Lockdown Curbs Spending
Bloomberg News
,(Bloomberg) -- Australia’s economy posted a smaller-than-forecast contraction last quarter, a welcome sign of resilience to coronavirus lockdowns across the heavily populated east coast.
Gross domestic product fell 1.9% in the three months through September from the prior quarter, beating expectations for a 2.7% drop, Australian Bureau of Statistics data showed Wednesday. That took the annual growth to 3.9%, stronger than the pre-pandemic pace of around 2%.
The outcome will be a boost for the Reserve Bank of Australia as it suggests a stronger starting position for the economy as it begins to recover. The bank aims to use record low interest rates at 0.1% to run the economy hot and try to return inflation to its 2-3% target.
Fiscal policy played an important role in supporting the economy through the lockdown, with Wednesday’s report showing public demand jumping 3.6% to contribute 0.8 percentage point to GDP.
©2021 Bloomberg L.P.