Australian economy records smallest non-pandemic annual growth in decades

Australia's economy had another quarter of weak economic growth, and has registered the weakest annual growth in decades outside the pandemic as household consumption and discretionary spending went backwards.

New data from the Australian Bureau of Statistics show GDP rose by 0.2 per cent for the June quarter, while it grew by 1.0 per cent over the last financial year – the lowest annual figures since 1991-92, excluding the COVID-19 years.

"The Australian economy grew for the eleventh consecutive quarter, although growth slowed over the 2023-24 financial year," ABS head of national accounts Katherine Keenan said.

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"Excluding the COVID-19 pandemic period, annual financial year economic growth was the lowest since 1991-92 - the year that included the gradual recovery from the 1991 recession."

Despite that, there were still positive signs in the national accounts data. While annual growth was low, it was better than expected – the major banks had pencilled in a rise of between 0.8 and 1.1 per cent, while the Reserve Bank had modelled 0.9 per cent.

Quarterly numbers were largely in line with economists' forecasts of between 0.1 and 0.4 per cent, and the ABS revised the March figures up slightly, saying the economy actually grew by 0.2 per cent, not 0.1.

But per capita GDP continues to go backwards. It shrunk for the sixth consecutive quarter, down 0.4 per cent, and dropped over a per cent over the last year.

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"What that means is, if you take out the benefit that population growth puts in the economy, then the Australian economy is still going backwards and has been going backwards for six quarters in a row," 9News Finance Editor Chris Kohler said.

"So 18 months of a per capita recession.

"This is what the Australian public is feeling. If you ask an individual or an individual household then, yes, we are in a very bad recession, the worst we've seen since the early '90s and, before that, perhaps the mid-'70s.

"That's why consumer sentiment is weak."

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Treasurer Jim Chalmers said the figures were largely as expected, and the result of international conditions.

"This is the inevitable consequence of global economic uncertainty, persistent but moderating inflation and higher interest rates," he said.

He also pointed to household consumption, which was down 0.2 per cent – the lowest since much of the country went into lockdowns as the Delta variant spread in mid-2021.

"Really I think the most important take-out from today's figures is around consumption," he said.

"But we also see the weakness in household budgets when it comes to household savings, consumption, as I said, discretionary spending and mortgage interest costs.

"People are under a lot of pressure."