Comment on GDP growth rate announcement
| Following the Reserve Bank of Australia’s GDP growth rate announcement this morning, CreditorWatch Chief Economist Harley Dale shares his thoughts on which sectors most contributed to the economic recovery and how this will impact government support and stimulus measures. “Household spending was the big driver of the GDP bounce-back. As consumers continue to arise from their involuntary, COVID-induced slumber, it is looking increasingly likely that they will drive a sustainable economic recovery. CreditorWatch data shows that the retail sector was in a deep hole earlier in the year, so in coming months the sector’s performance will provide a key indication as to the pace of our national recovery. “There were some industry winners in today’s GDP result. As the COVID shackles started to come off there were big gains made by Accommodation and Food Services (+41%), Arts and Recreation Services (+14.7%), Rental, Hiring and Real Estate Services (+7.7%) and Transport, Postal and Warehousing (4.7%). These are all high employment industries that suffered disproportionately under the cloud of COVID, as CreditorWatch data demonstrated. A sustained recovery in these industries will assist in managing the transition away from government support for businesses. “The JobKeeper and JobSeeker programs have played an integral part in protecting Australia from the worst impacts of COVID. Now that we are receiving increasingly positive updates on the Australian economy, it is appropriate that the Federal Government consider a more refined and nuanced approach to its stimulus measures. “The Governor is right to caution that it will take some time to bring our nation’s unemployment rate back down. That will remain a key focus of the RBA in 2021 however, these results are better than most people anticipated until only a few months ago and so give us a great foundation to build on.” |
