Households leading the way on growth — but will they keep it up in a grim 2022?

The economy is reliant on households running down their savings, but will inflation and international uncertainty end up crimping spending?

(Image: Tom Red/Private Media)

Australia’s immediate economic future depends on the willingness of consumers to run down their savings, at a time of falling real wages and rising inflation.

Yesterday’s national accounts for the December quarter showed a bounce back from the lockdown-driven contraction in the September quarter last year, boosting GDP by 3.4% after a 1.9% slide in the September quarter, for a 4.2% growth rate for the year as a whole.

It’s all pretty historical stuff — but there are important points given the big question about when and how strongly the Reserve Bank will respond to inflation. In February, the RBA forecast 5% growth for 2021 and just over 4% for the year to December 2022.

Read more about the future of the Australian economy…

Already a subscriber? Log in to keep reading.
Or, register your email address for a FREE 21-day trial.

About the Authors

Glenn Dyer

Business and Media Correspondent

Glenn Dyer is Crikey’s business and media correspondent.

Glenn Dyer — Business and Media Correspondent

Bernard Keane

Politics Editor @BernardKeane

Bernard Keane is Crikey’s political editor. Before that he was Crikey’s Canberra press gallery correspondent, covering politics, national security and economics.

Bernard Keane — Politics Editor

Read More

Free weekly Newsletter

A weekly breakdown of forecasts and trends

Enter your contact info to get The Financial Gambits VIP Newsletter for FREE.

We hate spam as much as you, if you dont like it just unsubscribe and we will never bother you again