The Australian Economy

A speech by Glenn Stevens, the Governor of the RBA

28 July 2009

This is an excerpt from a speech given by Glenn Stevens, the Governor of the Reserve Bank of Australia today

We cannot claim that Australia has avoided any downturn at all.

It appears at this stage, however, that the downturn we are having may turn out not to be one of the more serious ones of the post-War era, in contrast to the experiences of so many other countries.

It is becoming more common for Australians to see the glass as half full than as half empty.

Put another way, we can much more easily imagine upside risks to the outlook, to balance out the downside ones, than was the case six months ago.

The full speech can be seen at: www.rba.gov.au/Speeches/2009/sp-gov-280709.pdf

Australia Real GDP annual growth

2003 3.4 %
2004 3.2 %
2005 3.2 %
2006 2.5 %
2007 4.4 %
2008 2.5 %

Australian GDP quarterly figures

Gross Domestic Product (Seasonally adjusted - as issued each quarter)

+ 1.1 % Mar-2007
+ 1.1% Jun-2007
+ 1.0% Sep-2007
+ 0.8% Dec-2007
+ 0.6% Mar-2008
+ 0.4% Jun-2008
+ 0.2% Sep-2008
- 0.5 % Dec-2008
+ 0.4% Mar-2009 = No Recession
+ 0.6% Jun-2009 GDP quarterly figure

Australia's GDP Movement History since 1987
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Figures from the Australian Bureau of Statistics, using revised quarterly figures where amended from the original.

• 5206.0 - Australian National Accounts: National Income, Expenditure and Product
  

Some UK comparison figures show that UK GDP moved, on a quarterly basis, by

+ 0.5% in the March 2008 Quarter
+ 0.3% in the June 2008 Quarter
- 0.5% in the September 2008 Quarter
- 1.6% in the December 2008 Quarter
- 1.9% in the March 2009 Quarter
- 0.8% in the June 2009 Quarter

Figures from the BBC Recession tracker at:

• http://news.bbc.co.uk/2/hi/business/7789844.stm
  

Comparison of UK and Australia GDP changes from 1999 to 2009
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Australian Retail Trade Figures

The seasonally adjusted estimates of Retail Trade in Australia, has changed each month by:

• - 1.4% June 2009 (Although volume increased by 1.3%)
  
• + 1.0% May 2009
  
• + 1.0% April 2009
  
• + 2.2% March 2009
  
• - 0.2% February 2009
  
• + 0.2% January 2009
  
• + 3.8% December 2008
  
• + 0.4% November 2008
  

Source: www.abs.gov.au

Australian Balance of Payments

Figures released on 2nd June 2009 show:

• The Australian current account deficit, seasonally adjusted, fell $1,743m (27%) to $4,614m in the March quarter 2009.
  
• The surplus on goods and services increased $900m (22%) to $5,075m.
  
• The income deficit decreased $862m (8%) to $9,498m
  
  

  Source:

  • Balance of Payments and International Investment Position, Australia. 5302.0
    

Australian Annual Inflation Rates

2003 2.4 %
2004 2.6 %
2005 2.8 %
2006 3.3 %
2007 3.0 %
2008 4.8 %

CPI

The All Groups CPI rose by 1.5% for the 12 months to the June quarter 2009, compared to the annual rise of 2.5% to March quarter 2009.

Source: www.abs.gov.au

Australian Merchandise Trade Figures

Main export destinations, 2007-08

1 Japan 19.3%
2 China 14.9%
3 Republic of Korea 7.9%
4 United States 5.9%
5 New Zealand 5.2% %

Source: www.dfat.gov.au/GEO/fs/aust.pdf PDF File

Retail Trade Figures for April 2009 in Australia

The seasonally adjusted estimates of Retail Trade in Australia, has changed in April 2009 by:

The following states had an Increase in retail turnover

+ 1.3% New South Wales
+ 0.9% Australian Capital Territory
+ 0.8% Queensland
+ 0.5% Tasmania

Victoria had no change

The following states had a Decrease in retail turnover

- 0.1% South Australia
- 2.4% Western Australia
- 4.6% Northern Territory

Source: ABS

Retail Trade Figures for January 2009 in Australia

The seasonally adjusted estimates of Retail Trade in Australia, changed in January 2009 by:

State by State for the month of January 2009

• + 1.9% NSW
  
• + 1.5% ACT
  
• + 1.4% WA
  
• + 0.1% SA
  
• 0.0% QLD - No Change
  
• - 1.8% VIC
  
• - 2.9% TAS
  

Breakdown by Industry

• + 2.3% Cafes, restaurants and takeaway food services
  
• + 1.5% Food retailing
  
• + 0.8% Clothing and soft good retailing
  
• + 0.2% Other retailing
  
• - 4.0% Household good retailing
  
• - 0.5% Department stores
  

Source: ABS

Australian Economy contracts by 0.5% in the December quarter 2008

The ABS has reported that the Australian Economy contracted by 0.5%, in seasonally adjusted figures in the December quarter 2008.

One more quarter like that, and we will be in an 'Official' recession....

Source: 5206.0 - Australian National Accounts: National Income, Expenditure and Product, Dec 2008 Released at 11:30 AM 04/03/2009

What is an Official Recession

It is two consecutive quarters of Negative Growth.
I have a problem with that, and my explanation is in this hypothetical example:
Take a 12 month period, and look at the individual quarters:

Qtr 1 + 6.00%
Qtr 2 + 7.00%
Qtr 3 - 0.30%
Qtr 4 - 0.20% and we have a recession !!

However, over the year growth has been 12.5%

Now let's look at another hypthetical country:

Qtr 1 + 0.50%
Qtr 2 + 0.30%
Qtr 3 + 0.50%
Qtr 4 + 0.20% NO recession !!

However, over the year growth has only been been 1.5%, no-where near as high as the growth of the country with its growth in recession.

Interesting to think about ?

Australian Economic Indicators

1350.0 - Australian Economic Indicators, Jun 2009

Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 29/05/2009

• http://www.abs.gov.au/ausstats/abs@.nsf/mf/1350.0?OpenDocument
  

A Chart showing the GDP 1996 thtough to 2008, from the above linked ABS page.
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The Australian Stock Exchange

The stock exchange All Ordinaries movements for 2008-2009
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Monthly All Ordinaries 1985 to 2009 with smoothed trend Line
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