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Australia’s third quarter GDP surprised on the upside with a narrower than expected 1.9% contraction in data released on Wednesday, and MNI understands that analysts at the Australian Bureau of Statistics are expecting a positive result in Q4 despite lockdowns for much of the quarter.
Through the pandemic the ABS has seen household spending decline with increases in purchases on items such as takeaway food and alcohol not compensating for these falls. Household spending fell 4.9% in the September quarter.
Government spending was higher, up 0.7%, in pandemic related areas such as the vaccine rollout and contact tracing, but once again this did not compensate for the decline in household consumption.
OUTLOOK FOR MONETARY POLICY
Markets are watching the strength of the recovery from lockdowns with some questions over the Reserve Bank of Australia's interest rate stance, see: MNI STATE OF PLAY: Ambiguity On Inflation Clouds RBA Rate View.
MNI understands a key indicator for the ABS was last week’s data release showing a 4.9% month on month increase in national retail sales for October, a result which indicates the economy is already gaining momentum in a likely pointer for Q4 GDP.
The Q3 figures showed that the household savings ratios increased to 19.8% from 11.8% over the quarter, as in previous lockdowns, and the ABS has seen a significant portion spent when lockdowns ease.
With another month of this quarter to include Christmas spending, and with Australian households with money in their accounts from lockdown savings, the ABS sees a buoyant end of 2021 and good beginning for 2022.