‘Historically slow growth:’ Treasurer Jim Chalmers warns Nationals Account will show slow economic growth

The Treasurer warned internal data had forecast “historically slow growth” ahead of Wednesday’s release of fresh GDP figures.

Jim Chalmers has warned new figures on Australia’s economy, set to be released on Wednesday, will show “historically slow growth,” with Australia’s per capita recession set to stretch into its seventh consecutive quarter.

Managing expectations ahead of this week’s National Accounts data, which will show little growth in Australia’s GDP, the Treasurer said the trends were expected to continue into the near term, however Australia was still “on track” for a soft landing from restrictive high inflation.

“We know that higher interest rates, global economic uncertainty and cost of living pressures are weighing on households and the economy, and we expect to see that in this week’s National Accounts data,” he said.

“We anticipated historically slow growth in our economy at Budget time and that’s what most economists expect to see in these new numbers for the September quarter.

“Treasury’s growth forecasts in the mid-year update later this month will show it expects slow growth in our economy to continue in the near‑term.”

Treasurer Jim Chalmers curtailed expectations ahead of the Wednesday’s release of fresh National Accounts data. Picture: NewsWire / Martin Ollman

CommSec chief economist Ryan Felsman tipped the gross domestic product to expand by 0.4 per cent in the September quarter, with year-on-year figures to “edge higher to 1.1 per cent” compared to the sluggish 1 per cent reporter in the June quarter.

“(The June quarter) was the slowest pace of expansion since December quarter 1991 outside of the Covid-19 pandemic and was well below the decade average growth rate of 2.4 per cent,” he said.

The Reserve Bank’s November update also downgraded Australia’s GDP forecast to end 2024 at 1.5 per cent.

The International Monetary Fund was more pessimistic with its forecasting, tipping the economy to expand by just 1.2 per cent this year, and growing by 2.1 per cent throughout 2025.

With the federal government facing an election which will be dominated by cost-of-living concerns, Dr Chalmers said the government’s “primary goal” was on fighting inflation, while providing cost-of-living support.

“We’ve been planning and preparing for a soft landing, and with the economy still growing, inflation back in the band, and unemployment with a 4 in front it we are on track for one,” he said.

“We acknowledge that even with the remarkable progress we’ve made in the national data, that doesn’t always translate to how people are faring and feeling in the economy.”

His comments echoed those made by Anthony Albanese earlier on Sunday, in which he said Australia was not immune from global increases in inflation.

“We understand that people are doing it tough. Global inflation has had an impact. Now inflation peaked higher and earlier overseas than it did here. But our focus has been on providing cost of living support,” the Prime Minister told ABC’s Insiders.

“Inflation peaked higher and earlier overseas than it did here. Interest rates were higher overseas, inflation was higher and it was earlier. The impact because of where we are in the supply chain occurred later here and hence why inflation, though that we inherited with a six in front of it when we came to office and rising, now has a two in front of it and is falling.”