Peter Costello

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National Accounts: September Quarter 1999


National Accounts: September Quarter 1999

The Australian economy grew strongly by 1.6 per cent in the September quarter and 4.5 per cent through the year. In trend terms, which removes some of the quarterly volatility, economic growth in the September quarter was a solid 0.8 per cent. The National Accounts also indicate that this strong growth continued to be accompanied by very low inflation. These latest figures are consistent with the Government’s forecast of average growth of 3 per cent in 1999-2000.

Australia’s ongoing strong economic growth and low inflation outcomes compare more than favourably with other industrialised economies.

The September National Accounts continue to portray a resilient economy, with widespread growth recorded amongst the various components of domestic demand. Private consumption continued to grow in the September quarter, along with both dwelling and business investment.

Net exports detracted from growth, with rising import volumes in response to strong domestic demand more than offsetting a rebound in Australia’s export volumes. A continued gradual improvement in export growth and commodity prices is expected in the period ahead as world growth continues to strengthen.

The National Accounts also provide further evidence of moderate price and wage pressures. The household consumption deflator rose by 0.5 per cent in the September quarter and by just 1.4 per cent through the year. Average earnings of employees increased by 1.1 per cent in the September quarter and by 2.7 per cent through the year.

In summary, the National Accounts provide further evidence of continuing strong economic growth as the dividends continue to flow from a more flexible and resilient economy brought about through sound and transparent economic policies. The Government’s major tax reforms will help to maintain this momentum in the period ahead. The Australian economy is set to end the millennium with an impressive record of strong low inflationary growth, together with the lowest unemployment rate in almost a decade – outcomes which have been achieved despite slower world economic growth. As outlined in the 1999-2000 Mid-Year Economic and Fiscal Outlook, the Australian economy is expected to grow by around 3 per cent in 1999-2000 and 3- per cent in 2000-01, with a declining trend in unemployment and low inflation.

15 December 1999

15 Dec 1999

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