The Australian economy powered into this year on solid footings as the country’s households remain cashed-up to consume and a pipeline of residential construction has been established.
GDP jumped 3.1 percent last quarter from the previous quarter, when it rose an upwardly revised 3.4 percent, the Australian Bureau of Statistics said yesterday.
That was the first back-to-back expansions of more than 3 percent since quarterly records were established in 1959.
Compared with a year earlier, the economy shrank 1.1 percent, while economists had forecast a 1.9 percent contraction.
The economy’s V-shape recovery is coming into sharp relief as Australian firms step up hiring, households unwind crisis-level savings and the property market gathers momentum.
Still, there is a way to go as Australia would only return to its pre-COVID-19 pandemic level of GDP in the middle of this year, with the Reserve Bank of Australia saying that monetary stimulus would be required for an extended period.
“Further reasonable growth figures seem probable as the household sector unwinds the large savings pool they accumulated during the pandemic,” ING Groep NV chief Asia Pacific economist Rob Carnell said. “Continued vaccine rollout will also help this process to play out.”
The two strong quarters of growth are a swing back from the nation’s first recession — defined locally as two consecutive quarters of contraction — in more than 28 years in the first half of last year.
The Australian government and central bank have worked closely to support the economy during the pandemic.
The central bank’s key role has been to ensure that there was plenty of low-cost credit available and to keep down government borrowing costs.
The central bank’s key interest rate and three-year yield target are at 0.10 percent, and it is running a low-cost funding facility for banks.
The central bank is also operating a A$200 billion (US$156.2 billion) quantitative easing program targeting longer-dated securities that is designed to help keep a lid on the currency.
It forecasts that the economy would expand 3.5 percent over this year and next, continuing to be led by household spending.
Meanwhile, government stimulus measures to encourage home building and renovations have helped set up a pipeline of residential construction work for this year.
The unemployment rate has steadily fallen with the economy gathering strength, dropping to 6.4 percent in January from a pandemic peak of 7.5 percent.
The government is due to end its signature wage subsidy program — JobKeeper — at the end of this month, creating pressure on jobs in industries like tourism affected by closed international borders.
“Stimulus and support measures are still very much required, and any scale-back needs to be carefully managed,” said Craig James, the chief economist at the central bank’s securities unit. “The reserve bank certainly hasn’t changed its rhetoric. Rates will remain low for another three years. Bond buying will continue. Cheap loans will remain under offer to business.”
SUPPLY HICCUPS: Poor manufacturing yields at Apple’s overseas suppliers have caused at least one maker of its new MiniLED displays to pause production, sources said The next-generation display destined to be a highlight of Apple Inc’s upcoming top-tier iPad Pro is facing production issues that could lead to short initial supplies of the new device, people familiar with the matter said. The Cupertino, California-based tech giant plans to showcase a new MiniLED display technology in the 12.9-inch iPad Pro set to be announced as early as the second half of this month. However, the firm’s overseas suppliers are dealing with poor manufacturing yields, the people who asked not to be named discussing sensitive matters said. At least one of the MiniLED makers has had to pause production as
RETAIL BANKING EXIT: Clients are concerned whether their rights would be protected, while employees were caught by surprise as the bank had just upgraded its services Citibank Taiwan Ltd (花旗台灣) yesterday said that credit card clients could continue using their cards as operations would continue normally until it sells its consumer banking business. As of February, the bank had 2.86 million credit cards in circulation in Taiwan, of which 2.17 million had been used in the past six months, ranking it sixth among all banks, data from the Financial Supervisory Commission showed. Credit card spending by Citibank clients totaled NT$15.66 billion (US$552.6 million) in February, also ranking sixth among banks in Taiwan. Citibank was the only foreign bank that made it into the top six. Customers should not
END OF AN ERA: The Boeing 747-400 jumbo jets have served the airline well, but new-generation aircraft are more fuel-efficient, CAL chairman Hsieh Shih-chien said China Airlines Ltd (CAL, 華航) yesterday bid farewell to its last four Boeing 747-400 planes, ending the era of the “Queen of the Skies” at the airline. CAL has since 1975 operated a total of 29 747 series aircraft manufactured by Boeing Co. In 1990, it started receiving delivery of 19 747-400 jumbo jets, with the last one, the B-18215, delivered in 2005, it said. The B-18215 was the last of the passenger model produced by Boeing, making the 16-year-old aircraft the world’s youngest 747-400, CAL chairman Hsieh Shih-chien (謝世謙) told an event to bid farewell to the planes at Taiwan Taoyuan
DIVERSE SUPPLY: TSMC chairman Mark Liu said the firm’s US$12 billion investment in Arizona would succeed with continued bipartisan support from the US Congress Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, on Monday took part in a virtual White House summit about a global semiconductor shortage and Washington’s plans to strengthen US supply chains. The Hsinchu-based company was among 19 firms, including fellow chipmakers Samsung Electronics Co, GlobalFoundries Inc and Intel Corp, that attended the summit hosted by US National Security Adviser Jake Sullivan, US National Economic Council Director Brian Deese and US Secretary of Commerce Gina Raimondo. US President Joe Biden told executives in the meeting that there is bipartisan support in the US Congress for efforts to strengthen the US