Treasurer Jim Chalmers says Australia's economy remains "steady and sturdy" after new national accounts data revealed the nation's GDP grew by 0.4 per cent in the June quarter – slightly ahead of market expectations.
That growth was higher than the 0.2 per cent in the March quarter, and meant the economy increased by 3.4 per cent over the course of the 2022-23 financial year.
"The Australian economy remains steady and sturdy in the face of unrelenting pressure," Chalmers said after the Australian Bureau of Statistics (ABS) released the national accounts.
"Economic real growth held up electively well despite the inevitable toll of higher interest rates, moderating inflation and continuing global uncertainty, particularly as it relates to China.
"We know that there are challenges ahead but we face them from a position of relative strength."
The news wasn't all positive, though, with GDP per capita falling 0.3 per cent in the quarter.
The household saving ratio fell for the seventh straight quarter to 3.2 per cent – its lowest level since June 2008 – and household spending slowed once again to an increase of just 0.1 per cent.
ABS head of national accounts Katherine Keenan said the lower savings were caused by high interest rates – which were left on hold for the third consecutive month yesterday – having to pay back income tax, and the rising cost of living.
"We know that people are under pressure from the rising cost of living and higher interest rates as well," Chalmers said.
"And we see that in the National Accounts data.
"Australians continue to pull back on discretionary spending to make room for essentials and also to cover mortgage repayments… people are also spending less on renovating their homes and are saving less out of their incomes."
Despite the challenges faced by the economy, market analysrt Farhan Badami said the GDP growth was a positive result.
"Many analysts feared for the worst due to the impact of fluctuating interest rates and the ongoing challenges posed by a sluggish post-COVID recovery in China," Badami said.
"Despite the somewhat modest GDP figures, the overall outcome remains positive.
"However, there are potential challenges on the horizon, particularly if there is a decline in public demand, which could potentially undo the progress achieved in this quarter."