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Buoyed by booming commodity prices and rising business confidence, the Australian economy is back on track, according to Treasurer Scott Morrison.
After a shock 0.5 per cent fall in GDP in Q3’16, the economy recorded strong 1.1 per cent growth in the final three months of the year. As a result, Australia's annual economic growth has been lifted up from 1.9 per cent to 2.4 per cent.
According to Morrison, none of the world’s biggest seven advanced nations has been able to achieve such a fast turnaround.
“These growth figures say we are at the top of the pack, and while last September quarter’s figures were surprising and disappointing, what we’ve seen in the December quarter is a return to the strong momentum that we’re seeing in our economy,” the Treasurer said.
The Australian Bureau of Statistics (ABS) explained the nation’s growth spurt with rising household spending and public investment in ‘big ticket items’ such as infrastructure.
Australia also saw the first increase in business investment for three years during Q4, as well as an increase in new housing. Exports are also growing strongly, as new LNG projects start operations.
Morrison said the performance was testament to the flexibility of the economy, including labour markets, financial markets and exchange rates.
Critics commented that the positive figures overshadowed weak wage growth, though, which could be affecting household demand going forward.
According to the ABC, compensation of employees, or pay packets, was down for the first time since the September quarter of 2012, with wages growth “the weakest on records back to the late-1990s”.