Who would’ve thought a superstar and some lightning fastcars could save Australia? Well that’s exactly what happened in the 1stquarter of 2024, as Taylor Swift’s Era’s Tour partied through Sydney and Melbourne in February, followed by the Australian Grand Prix in March. Both events both helped add 0.4% to Australian economic growth, as Swifties travelled the country, spending big on glitter, accommodation and restaurants.
The pop in economic activity from the events masked another wise sombre consumer; battling higher cost of living pressures and flat real disposable income. With other areas of the economy also weak (non-dwelling construction -4.3%, housing investment -3.4%, private demand +0.1%), Australia’s economic position was best described as anaemic, with GDP recording 0.1% growth for the quarter or 1.1% for the year. The picture is worse when considering the measure on a per capita basis (ie by population). Per capita GDP growth fell by 0.4% QoQ, marking the fifth consecutive quarterly decline, and deepening the "per capita recession."
Stage 3 tax cuts which kick-in in July, and a 3.75% increase in the minimum wage and awards are expected to help the economy in the near term, but overall – inflation and high interest rates are the unwelcome hangover that still lingers.
