As soon as the Covid vaccine rollout in Australia, the pandemic battered Australian economy started to react positively with a marked increase in household spending, driving a much-needed economic growth.
This positive signal has already resulted in Australia recording its biggest monthly trade surplus driven, primarily, by household spending, infusing confidence into Australian markets.
Needless to say that one of the major reasons for the economic contraction was the shrinking of household spending followed by the global pandemic and the costly successive lockdowns that virtually brought economies to grinding halt.
Spending is one of the primary drivers of economic growth. It is obvious that one’s spending is another’s demand and would, eventually, kick start the halted economy.
Biggest monthly trade surplus
According to sources, treasurers attributed the rising confidence in the Australian markets to the Covid vaccine rollout.
Australia reported its biggest monthly trade surplus in history as the pandemic –hit-economy continued to recover from last year’s recession.
The Australian Bureau of Statistics stated that the trade balance of goods and services was as high as $10.1bn in January and this was an increase of more than $3bn compared with December.
The increment in trade balance was, predominantly, owing to 6 % increase in exports, while imports had gone down by 2%.
Based on the preliminary data of the last months, economists predicted a trade surplus of around $6bn, with rising export earnings on higher commodity prices, especially, those for iron ore on sturdy demand from China.
There was also a substantial increase in retail spending and it was by 0.5% in January to $30.5bn, a little below the 0.6% increase as reported in previously in the preliminary data. Despite that, the annual retail sales were shot up by a massive 10.6%.
According to the December quarter national accounts, the economy grew by a stronger-than-anticipated 3.1% following an upwardly revision of 3.4% in the September quarter.
Significantly, it was, for the first time, that the national accounts had acknowledged two consecutive quarters of 3%-plus increase in the 60-year history of the series.
It was noted that the Australian economy was extraordinarily resilient and that government’s recovery measures made a sea change.
Other figures indicate that there would be a rebound in vital sectors of the Australian economy such as Manufacturing and Constructions, thus resulting in further employment creations.
Progressive government measures such as low interest rates and incentives contributed to steady house prices rise at their fastest rate since 2003. This had also created a healthy demand for homes loans at a high level.
All these factors indicate that the rebound of the Australian economy has just started and invariably that would help recovery of battered economies in the vital Pacific Region.
What is noteworthy in such a recovery is that it would, once again, result in not only enormous job gains, but also creation of wealth and business opportunities, particularly for foreign investors.
This is an opportune time for prospective foreign investors to flock in to invest in lucrative sectors such as Construction, Manufacturing and Mining Sectors of the Australian economy.
