Despite a delicate transition away from the unprecedented growth of the mining boom, the economic state of the nation appears to be pretty bloody good!
Released today, the national accounts reflect a booming Australian economy, growing by 1.1 percent in the March quarter and 3.1 percent over the year to March. This is the fastest rate of growth in 3.5 years.
This is largely thanks to growth in exports, increasing 1 whole percent, as well as household consumption, contributing 0.4 percent.
And while many naysayers remain pessimistic, Tim Harcourt, The Airport Economist, told The Hip Pocket that while inflation and wages are low, it’s certainly not a sign of a flawed economy.
“We’re living in a world of low inflation, low wage growth and low interest rates, but it doesn’t mean the Australian economy is fundamentally flawed,” he said.
CommSec Chief Economist Craig James shares the optimism, pointing out just how well we’re doing.
“The economy is not only growing at the fastest rate in 3½ years, it is growing faster than the “normal” rate – the 10-year or 15-year average.”
The question now, is how do the Reserve Bank move forward? They could cut rates further to introduce faster economic growth, but Craig says this could be a dangerous move given the already insane housing market.
“The last thing the Reserve Bank wants is to create an unsustainable boom in housing that could lead to a housing bust and broader economic downturn,” he said.
No doubt Prime Minister Malcolm Turnbull is pretty stoked on this too, telling reporters in Brisbane, “so far, good”.
“We are seeing strong growth in jobs but we are seeing, however, signs that we cannot be complacent,” he said.
With the federal election now around the corner, a strong national economy is sure to be a big point of contention between the two major parties.