The Q4 Australian Bureau of Statistics (ABS) national accounts, released earlier this month, showed that the economy edged out of per capita recession after recording 0.1% growth over the quarter.
This followed 21 months of consecutive declines in per capita GDP.
The Melbourne Institute’s latest nowcast for Australia’s Q1 GDP growth, presented below by Justin Fabo from Antipodean Macro, has firmed to 0.6% for the quarter, suggesting that the economy has continued to gain momentum gradually.
There is a strong possibility of per capita GDP temporarily drifting back into negative territory in Q1 due to Cyclone Alfred.
Treasurer Jim Chalmers suggested that Cyclone Alfred could wipe a quarter of a percentage point off quarterly growth.
That said, the improving trend is undeniable, driven by strong public sector spending.
The story is less rosy for Australian households, which suffered an eighth consecutive decline in per capita household consumption in Q4 2024.
Household have also suffered an 8% decline in real per capita incomes since mid-2022.
Most high-frequency indicators of consumption have remained soft, suggesting households may have remained in recession in Q1.
