The Australian economy remains stagnant in the June quarter due to high borrowing costs and persistent inflation, leading to a reliance on government spending for growth. Real GDP only rose by 0.2%, falling below market expectations. Annual growth also slowed to 1.0% from the previous quarter, reflecting the impact of reduced household spending and a low savings rate of 0.6%.
The Reserve Bank of Australia's decision to raise interest rates to 4.35% has contributed to the economic downturn, aiming to control demand and inflation. Inflation in domestic demand has reached 4.2% for the year, driving nominal GDP growth to 4.4%. However, per capita GDP has declined by 0.4% for the sixth consecutive quarter, highlighting the challenges faced in maintaining productivity.
Overall, the economic data points to a challenging environment for consumers and businesses in Australia, with implications for investment decisions and financial planning.
