‘Cautious’ Aussies spend less as interest rates and petrol prices bite hard

Australia’s economy has stalled, with surging petrol prices and three interest rate hikes slowing national growth.

Australian Bureau of Statistics figures show the economy grew by just0.4per cent over the June quarter or 2.1 per cent over the last year.

In the March quarter, the national economy grew by 0.3 per cent to 2.5 per cent over the year.

On a per capita basis, GDP increased by 0.8 per cent over the last financial year.

Prior to Wednesday’s official release, economists had predicted quarterly growth of between 0.1 to 0.4 per cent over the June quarter,

ABS head of national accounts Grace Kim said the economy continued to cool.

“Economic growth remained subdued in the June quarter as households continued to behave cautiously,” she said.

“While increased spending and business investment occurred in pockets of the economy, imports supported much of the growth, moderating its contribution to overall GDP growth”.

Household spending rose by 0.4 per cent in the June quarter with the ABS saying it was subdued across most categories due to the Middle East conflict and changing spending behaviour due to higher petrol prices.

Meanwhile business investment dropped 0.5 per cent, although this was largely due to a large bounce in data centre spending in the March quarter.

Originally published as Australia’s economy stalls amid interest rate hikes and surging petrol prices