SYDNEY – Australia’s gross domestic product grew 1.4 percent over the last fiscal year, marking the weakest economic growth in a decade, according to official data released on Wednesday.
The Australian Bureau of Statistics also said that the Australian GDP grew by only 0.5 percent in the second quarter of 2019, representing a significant slowdown in the pace of economic expansion.
The quarterly growth – which met consensus expectations by experts – was undergirded by net exports, especially of mineral raw materials, and public spending.
Australia is on a 27-year run without a recession – the longest ongoing growth streak in the developed world – but faces headwinds including weak consumer spending, tepid inflation and a darkening global outlook.
“Economic growth in Australia over the first half of this year has been lower than earlier expected, with household consumption weighed down by a protracted period of low-income growth and declining housing prices and turnover,” said Philip Lowe, the governor of the Reserve Bank of Australia, in a statement.
“The outlook for the global economy remains reasonable, although the risks are tilted to the downside,” Lowe added. “The trade and technology disputes are affecting international trade flows and investment as businesses scale back spending plans due to the increased uncertainty.”
The RBA chief said that looking forward, growth in Australia was expected to strengthen gradually to be around trend over the next couple of years.
“The outlook is being supported by the low level of interest rates, recent tax cuts, ongoing spending on infrastructure, signs of stabilization in some established housing markets and a brighter outlook for the resources sector,” he explained.
“The main domestic uncertainty continues to be the outlook for consumption, although a pick-up in growth in household disposable income and a stabilization of the housing market are expected to support spending,” he added.
On Tuesday, Prime Minister Scott Morrison had said that the federal government could redraw current plans for a budget surplus next year if the economy continues to worsen.