The Australian Bureau of Statistics (ABS) has released the national accounts for Q4 2024, which revealed that the economy has finally emerged from its longest recorded per capita recession.
The Australian economy grew by 0.6% in Q4 2024 and 1.3% year-on-year. In per capita terms, the economy grew by 0.1% in Q4, the first increase in eight quarters.
The result was in line with market expectations.
Australia’s labour productivity fell by 0.1% in Q4 and was 1.2% lower year-on-year (trend chart shown below).
The following chart plots Australia’s real per capita GDP growth in long-run trend terms, alongside productivity growth and net overseas migration.
The boom in immigration has coincided with a trend decline in productivity and per capita GDP growth.
The household sector remained stuck in recession, with real per capita household consumption falling a further 0.1% in Q4, the eighth consecutive quarterly decline.
I expect the Albanese government to use the emergence from the recession to call the federal election.
However, it could end up being a double-edged sword for Labor.
The RBA forecast only 0.4% GDP growth in Q4. And the slightly stronger growth figure, alongside the stronger labour force, retail sales, and house price data, could dissuade it from cutting rates at its next meeting in April.
