Australia posts ‘soft’ growth as economic gloom remains

A truck drives past the container terminal at the Port of Melbourne in Melbourne on September 4, 2024. (Photo by William WEST / AFP)

Sydney, Australia — Australia’s ailing economy recorded another quarter of near moribund growth, with data Wednesday showing second-quarter gross domestic product expanded just 0.2 percent from the previous three months.

The Australian Bureau of Statistics said government spending had just about offset “subdued” consumer activity in the three months to June, as consumers continued to feel the pinch from high prices.

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Treasurer Jim Chalmers blamed the “soft growth” on “global economic uncertainty, higher interest rates and persistent but moderating inflation”.

“Around the world, higher interest rates and persistent price pressures are hurting people and weakening growth,” he said.

The economy has grown a paltry 1.0 percent in the past year, with per capita GDP falling 1.5 percent.

Wednesday’s data will fuel calls for the Reserve Bank of Australia to cut interest rates, which have risen steadily since 2022 in a bid to tame inflation.

Consumer prices have risen 3.8 percent in the past year — above the bank’s target of between two and three percent, effectively putting growth-fuelling interest rate cuts on hold.

Under pressure from voters and fearing a pre-election recession, the centre-left government has lashed out at central bankers for “smashing the economy”.