Australian national accounts – growth continues but deep uncertainty looms

The Australian Bureau of Statistics released the latest June-quarter 2018 National Accounts data today (September 5, 2018). While the economy recorded a relatively robust 0.9 per cent growth for the quarter and 3.4 per cent over the 12 months to March 2018, the economy remains reliant on household consumption expenditure, which, in turn, is being driven by credit and declining savings as household income growth moderates. There is very little growth contribution coming from the external sector and the contribution from private investment was zero. That is an unsustainable mix. All this means that the current overall growth trajectory is fairly fragile. There is a high probability that household consumption expenditure will slow right down as debt levels become unmanageable. Whether that happens will depend on the wages growth trajectory in future quarters and the outlook on that front is mixed. Overall, this is not a balanced growth outcome.

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