Overview
- ABS data show GDP rose 0.8% in the December quarter and 2.6% over the year, beating forecasts for 0.6% quarterly growth and marking the strongest annual pace in nearly three years.
- Growth was broad-based across industries, with public and private demand each adding 0.3 percentage points, and a notable lift in federal spending driven by increased defence investment.
- The GDP chain price index accelerated to 1.4% from 0.8%, a firmer price signal that analysts say raises the likelihood of further RBA tightening rather than near-term cuts.
- Productivity was flat on the quarter, indicating output gains came from more hours worked, prompting warnings that faster growth without efficiency gains risks stoking inflation.
- Household consumption remained cautious, with Q4 spending up 0.3% and January’s ABS indicator rebounding but slowing in annual growth, while one-off boosts from inventories, big retail sales and Ashes crowds flattered the quarter.