The latest official growth figures may be benign, but it still means Australia is approaching nearly a quarter of a century without a recession.
It probably isn’t time to light up another of his big cigars, but Joe Hockey believes we should be celebrating the economy entering a 24th year without a recession.
The latest official growth figures show the economy expanded at only a modest pace in the June quarter, in contrast to the blockbuster result of the previous three months.
The treasurer though is confident there is significant momentum in the economy, describing Wednesday’s national accounts as a “pleasing set of numbers”.
The figures were consistent with overall improvement in consumer and business confidence, he said.
But there was no room for complacency with growth still below trend and unemployment rising.
He noted Australia has now entered the 24th consecutive year of economic growth.
“That is something that Australia should actually celebrate,” Mr Hockey told parliament.
The economy grew by just 0.5 per cent in the June quarter, a marked step down from the strong 1.1 per cent rise in March quarter.
Exports made a large detraction from growth, reversing much of their solid input at the start of the year.
It meant annual growth fell below its long-term average again, sliding to 3.1 per cent from 3.5 per cent.
However, the quarter result was not as grim as some economists had expected, with forecasts having averaged out at 0.4 per cent.
Reserve Bank governor Glenn Stevens still believes it will be a while before unemployment drops consistently, and will need the non-mining sectors to grow a bit above their long-run trend pace.
“We may not be quite there yet, but we are, I think, slowly building a foundation for better performance,” he told a conference in Adelaide.
Commonwealth Bank economist Diana Mousina says the national accounts should be seen as a decent outcome for an economy in transition.
“It should calm some of the fears raised by the post-budget household sentiment collapse and the spike-up in unemployment in July,” she said.
Worryingly, however, a separate report shows Australia is continuing to lose its competitive edge in the global economy.
Australia dropped one place in the latest World Economic Forum’s Global Competitiveness Index to 22nd, continuing a downward trend since 2009/10 when it was ranked 15th.
Australia Industry Group chief executive Innes Willox said more of Australia’s competitors were “leap-frogging” the local economy.