Australia’s economy has sustained its rebound trend, with the gross domestic product (GDP) rising by 1.8% in the first quarter of this year.
Official statistics on the economy showed that the recovery surpassed analysts’ expectations as the growth rate now becomes larger than it was before the Covid-19 pandemic.
According to the latest figures on the country’s economic performance, the growth was attributed to a soaring demand for commodities around the world and spending by consumers and businesses.
According to Australian Bureau of Statistics, rising household spending, investment by businesses, and higher prices of iron ore and gas exports helped drive the economy’s growth.
In addition, the statistics agency linked the rebound to huge amounts of government spending and economic stimulus from the Reserve Bank of Australia (RBA) introduced to mitigate the negative impact of the COVID-19 pandemic on the nation’s socio-economic activities.
For instance, Australia’s central bank on Wednesday retained interest rates at record lows just as it indicated that it would keep borrowing costs down to help spur the country’s economic recovery.
The government-owned bank kept its official cash rate at the all-time low of 0.1% for the sixth consecutive meeting, as the monetary policy makers hinted of its plans to continue to monitor inflation and rises in wages and house prices.
It would be recalled that in 2020, Australia was plunged into its first recession in nearly 30 years after government imposed lockdown measures across the country. The country’s GDP shrank 7% in the second quarter of last year compared to the Q1 rate.
The slump was the biggest contraction since 1959, and it came after a fall of 0.3% in the first quarter.
Analysts noted that the country’s speedy recovery had been helped by government’s ability to control the coronavirus spike, which boosted consumer and business confidence.
However, they also projected that government’s relatively slow rollout of Covid-19 vaccines remains a potential risk for a sustained economic recovery as concerns about low vaccination rates have been heightened by a fresh coronavirus outbreak in Melbourne, prompting another lockdown in Australia’s second biggest city.
Expressing his views on the COVID-19 pandemic spike and implications for the economy on Tuesday, the RBA Governor, Philip Lowe, said: “An important ongoing source of uncertainty is the possibility of significant outbreaks of the virus, although this should diminish as more of the population is vaccinated.”
