National accounts
- The current economic expansion began in the September quarter of 1991. The 19th year of the expansion was completed in the June quarter 2010 and the 20th year of growth has begun with the Australian economy expanding by 0.2 per cent in the September quarter. While growth was only modest in the latest quarter, arguably Australia is still in the strongest position of any global advanced economy.
- While growth was modest in the quarter, it follows a 1.1 per cent increase in the June quarter. The modest growth in the quarter should be regarded as the pause that refreshes. Annual economic growth now
stands at 2.7 per cent – below the Reserve Bank’s estimate of “normal growth” of 3.25 per cent.
- Eleven of the 19 industry sectors contracted in the September quarter. The strongest contribution came from agriculture, forestry and fishing (up 18.5 per cent in the quarter and contributing 0.4 percentage
points to growth). Farm GDP rose by 21 per cent in the September quarter – marking the fastest quarterly gain in 17 years.
- The household saving ratio stands at 10.2 per cent. Productivity was disappointing – down 0.1 per cent in the quarter and up 0.5 per cent over the year. Inflation was under control – the household price deflator rose 0.3 per cent in the quarter and 2.0 per cent over the year.
- Real (inflation adjusted) spending on petrol fell by 5.2 per cent over the past year – the biggest drop in records going back 25 years.
- The Reserve Bank Governor has previously indicated that interest rate settings are on hold until 2011. There is nothing in today’s data that is likely to see him shift from that view. In short, Merry Christmas!
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