“In the two months since the end of the June quarter, we’ve seen a deteriorating global growth outlook, continuing labour shortages, and rising interest rates.
“(They) are straining businesses and households and creating headwinds for our economy over the year ahead,” Dr Chalmers said.
National accounts data was released by the Australian Bureau of Statistics on Wednesday, with elevated household spending and exports driving growth in the quarter.
“This is the third consecutive quarter of economic growth, following a contraction in the September quarter 2021, which was impacted by the Delta outbreak,” ABS head of national accounts Sean Crick said.
Household spending lifted 2.2 per cent for the quarter, contributing 1.1 percentage points to gross domestic product.
“Households increased spending on domestic and international travel as COVID restrictions further eased and international borders remained open,” Mr Crick said.
Strong exports and slowing imports also made a one percentage point contribution to real GDP growth.
“Mining and agriculture picked up as severe weather conditions passed, and energy exporters responded to the strong global demand for energy in the wake of disruptions to Russian gas supplies to Europe,” Dr Chalmers said.
Related: Retail Learning Channel » Australia records highest consumer confidence since June
However, the treasurer expects elevated commodity prices to taper off.
“While commodity prices strengthened in response to strong global demand for energy and pushed our terms of trade to a record high, we don’t expect this strength to continue,” he said.
Construction activity dropped off, with home building falling 2.9 per cent during the June quarter.
The national accounts figures also revealed wages growth trailing inflation, and showed household saving rates falling.
Households saved 8.7 per cent of their income during the quarter compared to 11.1 per cent in the March quarter 2022.
Despite the decline, the household saving rate was still above pre-pandemic levels.
The ABS’s national accounts figures follow the fifth consecutive official cash rate hike in a row on Tuesday.
BIS Oxford Economics’ Sean Langcake said households would start responding to rising interest rates soon.
“Conditions have become more challenging for households since the June quarter, with the RBA having increased interest rates by 225 basis points since May,” he said.
“This will contribute to a slowing in growth from here.”
You may also want to read: Retail Learning Channel » Australia sees highest retail sales in four months
He also said slowing momentum in the global economy would weigh on Australia’s growth in coming quarters.
“Nevertheless, the ongoing strength in the labour market will ensure growth remains positive, albeit at a slower pace,” Mr Langcake said.
Despite the financial pain felt by households, the treasurer said the government would be limited in its ability to hand out cost of living relief in the October budget.
“We will provide cost of living relief but we need to do it in the most responsible way that we can and in a way that delivers a broader economic dividend and doesn’t make it harder for the Reserve Bank,” he said.
Greens senator Sarah Hanson Young urged the government to dump the stage three tax cuts to ensure the government could fund the services people need.
“When you look at the accounts, when you look at the budget balances of some of Australia’s biggest corporations over the last 12 months, there have been windfall profits,” she said.
“If you want to fund proper services, if you want to give a real relief to higher living costs of everyday Australians, you actually have to fund things like free childcare, like proper health and education, like helping to lift the wages of low paid workers.”
Follow us on social media