The Australian economy outperformed expectations in the second quarter, official data show, with household spending proving the main driver of growth, AFP reported.

According to the Australian Bureau of Statistics, the economy grew by 1.8% compared with the same period a year earlier — 0.4 percentage points more than in the first quarter. “We saw the fastest quarterly growth in nearly three years and the strongest annual increase in almost two years,” Finance Minister Jim Chalmers told reporters. “Our economy is in an enviable position despite all the challenges.”

The data indicate that household consumption was a key factor in the rise, with spending on discretionary goods and services increasing by 1.4%, helped by seasonal sales and new product launches.

The results were stronger than the 1.6% growth forecast by economists and the central bank, local media report. The Reserve Bank of Australia last month cut its key interest rate to its lowest level in two years, but warned that global challenges related to trade tensions create lasting uncertainty.

Although inflation has fallen from its peak of 7.8% in December 2022, high food, fuel and housing costs continue to weigh on consumer spending. | BGNES