Extreme weather weighs on Australian economy as growth slows to 0.2%

The Guardian

3 days ago

The Australian economy has had an underwhelming start to the year, with growth of just 0.2% in the first three months of 2025 compared to 0.6% in the previous quarter.
Annual growth was steady at 1.3%, the new figures from the Australian Bureau of Statistics showed.
Katherine Keenan, the ABS's head of national accounts, described the latest data as 'soft'.
'Public spending recorded the largest detraction from growth since the September quarter 2017,' Keenan said.
'Extreme weather events reduced domestic final demand and exports. Weather impacts were particularly evident in mining, tourism and shipping.'
GDP per capita fell 0.2% in the three months to March, after a 0.1% rise in the December quarter.
Treasurer Jim Chalmers in a statement immediately following the release said 'with all the uncertainty in the world, any growth is a decent outcome'.
Despite the marked slowdown, Chalmers said 'the Australian economy remains one of the strongest in the world'.
'Public demand has played a role in keeping the economy from going backwards over the past two years, but we know strong and sustainable economic growth is driven by the private sector,' he said.
Cyclone Alfred, the first cyclone to hit south-east Queensland in 50 years, and associated flooding, weighed on economic activity through the three months to March.
Treasury has estimated that natural disasters through the first half of 2025 will deliver a $2.2bn blow to the economy, concentrated in the first quarter of the year.
Meanwhile, Donald Trump's aggressive trade tariffs continue to reverberate around the world, with the Reserve Bank flagging that the heightened uncertainty over the outlook as a major factor in its decision to cut interest rates.
More details soon …