Australian economy slows after 0.3 per cent lift

The Australian economy slowed in the first quarter after growing by just 0.3 per cent due to modest household and government spending and cyclone disruptions to mining industries.

GDP - the indicator of economic growth - rose 0.3 per cent in the March quarter and 2.5 per cent compared to a year ago, according to freshly released data by the Australian Bureau of Statistics.

It was the lowest quarterly rise since March 2025.

“Economic growth slowed in the March quarter, with modest household and public sector expenditure as well as cyclone disruptions to mining and export activities,” ABS head of national accounts Grace Kim said.

Household spending rose 0.5 per cent due to higher spending on fuel, gas and electricity after the government’s energy rebates ended.

Spending on essential goods and services also increased by 0.8 per cent, while discretionary spending rose by 0.1 per cent - signalling more cautious spending.

“Rising interest rates and significantly higher fuel costs in the March month likely created an environment for more cautious consumer behaviour,” Kim said.

“This resulted in reduced spending across a range of household expenditure categories.”

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Government spending fell 0.2 per cent, which was the lowest quarterly growth since the September quarter of 2022.

Treasurer Jim Chalmers welcomed today’s figures and said they were “very solid” under the broader economic circumstances.

“Our economy’s got no shortage of challenges, but it’s also got some very sturdy foundations and you can see that in today’s data,” he told reporters this afternoon.

“This is the equal fastest annual growth in almost three years.

“It shows how resilient our economy is at a time of very substantial global economic volatility and instability.”

Chalmers touted the growth in private business investment, which rose 6 per cent, as the highest in almost a decade.

“The big story here is business investment as a share of the economy is now at 12.9 per cent,” he said.

Responding to questions about some of the weak figures, Chalmers criticised the “doomsayers and everyone who wants to talk the Australian economy down”.

“We’re seeing a boom in private investment and that’s a good thing,” he said.