Australia’s long-distance growth record outpaces OECD partners
Australia's economy grew by 0.5% in the fourth quarter (Q4), lifting
Australia's annual economic growth rate to 1.9% in FY2018/19, according to
National Accounts figures
released by the Australian Bureau of Statistics. The economy grew by 2.9%
The result is in line with the
latest projected rate
from the International Monetary Fund (IMF) but marginally lower than the
2¼% predicted by the Reserve Bank of Australia in its
August 2019 Statement on Monetary Policy.
Given the current economic uncertainties, the latest outcome is a positive
sign. Australia has sustained the momentum that has delivered a record 28
years of uninterrupted economic expansion. The period since 1991 is now the
longest continuous stretch of growth that Australia has recorded for at
least the past 50 years, with an average growth rate of 3.1% per annum.
First among the OECD
In the 1970s and 1980s, our growth phases lasted only six or seven years
before another recession hit. By comparison, since 1991 all of the other 36
member countries in the Organisation for Economic Co-operation and
Development (OECD) have experienced at least one recession – as defined by
two consecutive quarters of negative GDP growth.
Many economies experienced two recessions during that period: one in 2001
following the collapse of the dot-com bubble; and one in the 2008 Global
Financial Crisis (GFC).
By our count, Australia’s tally of consecutive quarters of positive growth
has now exceeded all OECD member countries including the Netherlands (96
quarters between Q4 1981 and Q2 2008), South Korea (79 since the Asian
Financial Crisis in 1998) and the USA (66 quarters Q2 1991 and Q2 2008).
Our estimates for Australia’s growth performance are based on
the national accounts collected by the OECD
. At first glance, the Japanese economy came close to matching Australia’s
recent economic record. However, the total number of positive quarterly
consecutive growth rates in Japan was actually 63 from Q1 1975 to Q1 1993
instead of 119.
The history is interesting: Following the Arab oil embargo Japan went into
a severe recession with GDP shrinking by 1.2% in 1974. Note also that
although no two consecutive negative growth numbers were reported on a
quarterly basis between 1960 and 1974, Japan did suffer a sharp
GDP slump of 3.4% in Q1 1974.
The Japanese economy then experienced a modest recovery of 0.7% and 1.3% in
the following two quarters and then fell again in the Q4 1974.
The outlook remains positive
Australia’s economic resilience has been the envy of many economies in the
world. Australia sailed through the Asian economic crisis of 1997–98,
prospered through the US stock market bust and recession of 2001, and
continued to grow through the GFC of 2008–09.
Looking forward, the IMF predicts that Australia’s real GDP will grow by an
average rate of 2.7% per annum between 2020 and 2024, up from an average
rate of 2.5% per annum between 2015 and 2019, which is well ahead of most
Australia’s impressive performance over the past two and half decades has
been largely attributable to a wide range of factors including economic
reforms, longstanding trade ties with booming Asia, and strong population