As all other countries in the world, the Australian economy was hit hard by Covid-19, inflation and rising interest rates.
How is the economy doing in 2022?
Read on as we dive into the latest Australian GDP statistics, economic growth, industry-level contributions, and much more.
Ten Most Important Australian GDP Statistics
- Australia’s GDP stood at US$1.63 trillion in 2021.
- Australia’s economy rose 0.8% in the March quarter of 2022.
- Australia’s GDP growth is expected to rise to 4% by the end of Q2 2022.
- Household spending went up by 1.5% in Q1 2022.
- Consumer prices increased by 5.1% on an annual level.
- Hours worked declined by 0.9% in the March quarter.
- The Reserve Bank increased the official interest by 50 basis points.
- Government gross debt stood at 39.5% of the GDP in 2020/2021.
- The combined value of residential real estate in the country was $9.97 trillion by May 2022.
- From December 2021 to March 2022, exports of goods and services fell by 0.9%.
Australian GDP Statistics 2022
1. Australia’s GDP stood at US$1.63 trillion in 2021.
(Statista, Trading Economics)
In 2020, the Gross Domestic Product (GDP) in Australia was worth US$1.3 trillion or US$52,847.68 per capita—the second-lowest on record in the past 12 years. That year, the country’s GDP value represented 1.8% of the global economy.
Here is a look at Australia’s GDP growth rate over the last 10 years:
2. Australia’s economy rose 0.8% in the March quarter of 2022.
(Australian Bureau of Statistics)
Australia’s GDP increased by 0.8% in Q1 2022, reaching $527.7bn. When it comes to year-on-year growth, the country’s GDP rose by 3.3%. The growth is mostly due to the lifting of Covid-19 restrictions and the rise in household consumption.
Nominal GDP, i.e. not adjusted for inflation, increased 3.7%.
3. Domestic final demand contributed 1.6 percentage points to Australia GDP growth.
Domestic final demand, i.e. the sum of consumption, investment and expenditure (by the government and private sector) contributed the most to Australia’s GDP growth with 1.6 ppt, half of which (0.8 ppt) was made up by households.
Government spending contributed another 0.6 percentage points of growth, with expenditure rising by 2.7%, spurred by spending on health (due to an increase in Omicron cases) and flood relief in NSW and Queensland.
Another key factor contributing to growth in the country’s economy was the build-in in inventory as the supply chain was reinstated and businesses started to replenish stock. In March 2022, inventories rose to a record-high of $7.5 million.
4. Australia’s GDP growth is expected to rise to 4% by the end of Q2 2022.
(Trading Economics, Bloomberg)
Australia’s GDP per capita is expected to rise to US$57300.00 by the end of the year. Long-term, GDP is forecast to grow by 2.80% in 2023 and 3.30% the following year.
The Commonwealth Bank of Australia, however, downgraded their GDP growth projections in light of RBA’s hike in interest rates. The CBA now predicts that the $2.2 trillion economy will increase by 3.5% in 2022 (down from a previous projection of 4.7%) and then experience slower growth of 2.1% in 2023 (as opposed to previous forecasts of 3.1%).
5. In the 2020/21 financial year, services accounted for 81% of GVA.
(Australian Bureau of Statistics, Austrade)
Overall, Gross Value Added increased by 0.5% in the March quarter with Transport, Postal and Warehousing seeing significant growth of 4.3% and adding 0.2% to Australia’s GDP growth.
Other areas where demand increased include:
- Arts and Recreation Services: 4.4%
- Accommodation and Food Services: 3.7%
- Professional, Scientific, and Technical Services: 3.1%
Agriculture, Forestry and Fishing (-5.8%) recorded the biggest decline in gross value added, mainly due to weather conditions negatively impacting the production of crops and livestock.
Services are also growing faster than the goods sector, with the information, media and telecommunications sector seeing the fastest growth and contributing $22.3 billion to Australia’s GDP in 2020.
Household Income and Expenditure Statistics
6. Household spending went up by 1.5% in Q1 2022.
Growth was fueled by spending on discretionary goods and services, which increased by 4.3%—the first time expenditure on non-essential products and services went above pre-pandemic levels, Australia’s GDP 2022 stats reveal.
Growth was noted in spending on the following goods and services:
- 60% rise in transport services, as domestic and international travel increased;
- 4.8% rise in recreation and culture and 5.3% rise in hotels, cafes, and restaurants, mainly caused by lifting of restrictions;
- 13.0% rise in the purchase of vehicles as a result of the re-establishment of supply chains, up from 916,968 vehicles sold in 2020.
As spending on hospitality services increased, expenditure on food at retailers and supermarkets went down by 2%, as did spending on alcoholic beverages (3%) and tobacco and cigarettes (2.6%).
A decline was also seen in spending on health with the Omicron variant cancelling elective surgeries and non-essential medical visits. Overall, spending on essential goods and services decreased by 0.2%.
As spending rose, the household saving ratio decreased from 13.4% to 11.4%, although it still remained above pre-pandemic levels.
7. Consumer prices increased by 5.1% on an annual level.
(Trading Economics)
The consumer price index (CPI) rose 2.1% in the first quarter of 2022, above projections of a 1.7% growth.
The annual inflation rate increased by 5.1%, the highest annual spike since the introduction of GST at the start of the 2000s.
The major drivers behind the increase in consumer prices is the cost of petrol (35% increase), the cost of new dwellings (13.7%), food prices (4.3% increase, partly offset by a lower increase in the price of meals and takeaway foods of 2.1%), housing (6.7%), health (3.5%) and insurance and financial services (2.7%).
Trimmed mean inflation (which measures core inflation) also rose by a record-high 1.4% in March 2022 and 3.7% annually. This is the first time since 2010 that trimmed mean inflation is higher than RBA’s 2-3% target band.
8. Household consumption was the highest in the eastern States.
The Australian Capital Territory (3%) and Victoria (2.7%) witnessed the biggest increase in household spending, followed by NSW (1.9%).
In terms of State Final Demand, which measures the total value of products and services sold in the state, Victoria saw the highest growth (2.4%). The Australian Capital Territory (1.7%) and New South Wales (1.2%) follow.
9. Household disposable income increased by 0.6%.
Growth in household disposable income was primarily due to a rise in non-labour and labour income, with compensation of employees soaring to 1.8% (the private sector COE increased by 2.3%, and the public sector COE rose to 0.1%). Wages in the private sector rose due to skilled labour shortages which led to companies paying more to retain their workers.
10. Average disposable household income was $1,124 a week in 2019/20.
The average net worth for all households in the country stood at $1.04 million, both of which have remained steady over the last decade. The level of household debt increased significantly, going by 39% in the last ten years.
Average household debt was $203,800 in 2019/2020 up from $189,500 the previous year. Furthermore, the ABS estimates that 75% of households had debt in 2019/2020, 30% of which were paying off a debt that was at least three times higher than their annual income.
As of Q3 2021, household debt accounts for 119.30% of the country’s GDP.
11. Hours worked declined by 0.9% in the March quarter.
As a result of the Omicron variant, hours worked fell by 0.9%. On the plus side, strong government support kept businesses afloat, reducing the unemployment rate to 3.9%—down from 4.5% in August 2021 and the lowest on record since 1974.
Other Economic Growth Statistics
12. The Reserve Bank increased the official interest rate by 50 basis points.
(ABC)
This is the single biggest rise in Australia’s cash rate in the last 22 years, with the RBA taking the cash rate target to 0.85% in an effort to curb inflation before it gets out of hand.
This hike will add around $133 a month to a $500,000 loan over 25 years.
The government expects even more increases before inflation is brought under control, which could push low-income families and homeowners with mortgages and no savings to the brink.
You might be interested in: How to save on a home loan in Australia?
13. Government gross debt stood at 39.5% of the GDP in 2020/2021.
(Budget.gov.au)
Gross debt as a share of GDP is set to go up to 44.9% by 2025 (at $1.1 trillion), after which the government expects a decline to 40.3% of GDP by the end of the medium term. Net debt reached 28.6% of Australia’s GDP in 2020/21, or $592 billion.
The Budget also projects a halving in the deficit to 1.6% of the GDP by 2025/26 as the number of Australians on welfare decreases and the percentage of employed persons goes up.
14. The combined value of residential real estate in the country was $9.97 trillion by May 2022.
(CoreLogic, Australian Bureau of Statistics)
According to ABS data on GDP growth, the mean price of residential dwellings was $920,100 by the end of Q4 2021.
The value of dwellings went up by 14.1% over the 12 months leading to May 2022, however sales volumes decreased by 26.9% compared to May 2021. Properties are also taking longer to sell, spending 28 days on average on the market.
Rent values, on the other hand, increased by 1% in May or a 9.3% hike over the year.
Read more about: How to save money for your own home while renting?
Dwelling approvals decreased by 2.4% led by a 7.9% drop in unit approvals, whereas detached house approvals rose above the decade-average to reach 10,154 in April 2022.
Lending for purchase of property fell by 6.4% in April 2022: owner-occupied lending dropped by $1.6 billion (7.4%) and investor lending declined by 4.8% or $557 million.
15. Profit of mining companies in the country rose by 14.7%.
(Australian Bureau of Statistics, Mining Technology)
This translates to about half of all corporate profits. The surge in profits was driven by strong growth in commodities prices, coal and iron ore in particular.
However, despite exports of mining commodities rising 10.5%, mining production dropped by 1.5% in Gross Value Added from December 2021 to March 2022, caused by a 3.4% fall in Iron Ore Mining, 2.7% fall in Coal Mining and 0.6% fall in Oil and Gas Extraction.
2020 Australia’s GDP by sector stats indicate Mining was the strongest sector in the Australian economy, accounting for 10.4% of national GDP.
16. Private investment increased 0.5%.
This was primarily driven by a 3.6% increase in machinery and equipment and a 1.5% increase in intellectual property products. Meanwhile, public investment increased by 1.7%, fueled by a 13.6% increase in national defence and a 1% increase in state and local general government.
17. Gross operating surplus and gross mixed income jumped 3.4% in Q1 2022.
Profit of non-financial business increased by 7.3%, led by mining and wholesale trade.
A decline was noted in manufacturing (which contributes 6% of GDP) and construction (worth $360 billion or 9% of Australia’s GDP) as input costs went up and government subsidies decreased.
Analysis of Australia’s GDP by sector shows Gross Operating Surplus jumping 1.2%, driven by a 1.6% increase in dwellings owned by individuals and a 0.9% rise in financial corporations.
18. Retail trade noted an annual increase of 9.6% in April 2022.
Online retail stood at $3,676.2m, declining for four consecutive months in the six months since lockdowns ended. Online sales, which increased considerably in 2020/21, still remain above pre-Delta levels with turnover estimated at $718.8 million throughout the year.
19. Australia has one of the lowest tax rates.
(Austrade)
The average social security taxes among OECD countries are 9% of the GDP, while in Australia, they are less than 1%. What’s more, taxes on goods and services are 7% of the GDP, while the percentage is at 11 for OECD countries.
20. Taxes less subsidies on production and imports increased by 15.7%.
Taxes on production and imports rose 2.8%, mainly due to an increase in GST and gambling tax which were in turn fueled by the rise in household spending. On the other hand, subsidies on production dropped to 39.8% as Covid-19 support payments to businesses reduced.
21. Tourism is expected to bounce back to pre-pandemic levels.
In March alone, the number of overseas arrivals increased by 103,370 trips to 374,630, whereas the number of international departures stood at 335,240 (a monthly rise of 158,980 trips). Tourism was one of the most affected sectors by the Covid-19 outbreak. Before the pandemic struck, tourism contributed $60.8 billion to Australia’s economy or 3.1% of the country’s GDP.
Export and Import Statistics
22. From December 2021 to March 2022, exports of goods and services fell by 0.9%.
The fall was due to a decline of:
- 2.7% in the export of mineral ores
- 10.8% in the export of non-monetary gold
- 14.1% in the export of cereals
- 2.3% in the export of other mineral fuels
Imports, on the other hand, increased by 8.1% during the March 2022 quarter.
The rise was due to an increase of 32% in imports of passenger cars and 30.4% in the import of household electrical items.
23. Terms of trade reached a record high in Q1 2022.
Going up to 5.9%, terms of trade rose due to the increase in export and import prices, 9.6% and 3.5%, respectively. Supply constraints experienced by other nations, particularly demand for mining and agricultural products, led to a rise in export prices.
24. The top export of Australia in 2020 was Iron Ore with US$79.6 billion.
(OEC)
Other top exports of the country include:
- Coal Briquettes (US$36.4bn)
- Petroleum Gas (US$26.8bn)
- Gold (US$17.7bn)
- Frozen Bovine Meat (US$4bn)
Australia is also one of the biggest exporters of coal, uranium and LNG in the world, energy statistics reveal.
The biggest imports on the other hand include:
- Cars (US$13.7bn)
- Refined Petroleum (US$10.8 bn)
- Gold (US$6.49bn)
- Broadcasting Equipment (US$6.38bn)
- Computers (US$5.76bn)
Australia imports and exports most of its goods to China (US$57.2 billion in imports and US$102 billion in exports), the USA (US$24.2bn and US$11.6 bn) and Japan (US$24.2 bn and US$31.8 billion).
Bottom Line
Despite a resilient economy and GDP growth of 0.8% in the first quarter of 2022, inflation and the rising cost of living coupled with the hike in interest rates paints a bleak picture for the rest of the year. Even more alarming than these Australian GDP statistics are projections for further increases in the RBA’s cash rate which could make it difficult for many Australians to make ends meet.
- ABC
- Austrade
- Australian Bureau of Statistics
- Australian Bureau of Statistics
- Australian Bureau of Statistics
- Bloomberg
- CoreLogic
- Mining Technology
- OEC
- Statista
- Statista
- Statista
- Trading Economics
- Trading Economics
1.What percentage of GDP does Australia spend on defence?
(Statista)
Between 2003 and 2020, Australia’s military expenditure remained between 1.6 and 2.1 per cent of the country’s GDP.
2. How much of Australia’s GDP is real estate?
(CoreLogic)
Residential real estate is worth $9.97 trillion, up from $9.9 trillion in 2022, while commercial real estate is estimated at $1.2 trillion. This makes the residential real estate sector almost four times bigger than the country’s GDP.
3. How much of Australia’s GDP is from mining?
GDP from mining in Australia fell to $48,747 million in the first quarter of 2022.
4. What is the biggest contributor to Australian GDP?
Services are the biggest contributor to Australia’s GDP growth, accounting for 81% of GVA in 2020/2021, Australian GDP statistics reveal.
