Despite a technical recession averted once again, underlying problems still remain that only a material sustained improvement in productivity can fix, explains Stephen Walters MAICD in the latest quarterly economic update.
- Growth in the economy bounced back in Q4, so a technical recession was averted
- The perfect storm of factors that dragged down GDP in the September quarter reversed last quarter
- A bounce in household spending led the rise in GDP, albeit only via a drop in the savings rate
- The nominal indicators were even better, with both the terms of trade and national income rising
- The rebound in GDP makes it less likely the Reserve Bank will trim the cash rate again
- Longer-term prosperity will only be delivered by a sustained improvement in productivity
Download the full report