Australia's economy grew 3.3 percent in the September quarter, according to the latest gross domestic product (GDP) figures from the Bureau of Statistics.
Although the economy is growing again, high unemployment is forecast to last for several years. Photo: AFP
But in the year to September 2020, GDP declined 3.8 percent.
The September quarter growth came after a 7 percent economic contraction in the three months through June - the worst fall on record, which confirmed Australia had entered a technical recession due to the coronavirus pandemic.
The return to growth follows six months of economic contraction, but with high unemployment forecast to persist for several years, the effects of the recession continue to be felt.
CommSec chief economist Craig James said the growth meant Australia was technically out of recession.
The textbook definition of a recession is two consecutive quarters of economic contraction, but James said that definition was not perfect and failed to take into account "the societal impact of recession ... especially on the labour market".
"But based on this definition, Australia has emerged from recession and the outlook for growth is encouraging," he said.
Federal Treasurer Josh Frydenberg said there was reason to take hope in the latest numbers, but said Australia was "not out of this crisis yet".
"Technically the recession is over, but the recovery is not," he said.
"The economic indicators are positive. That being said, this is a very challenging time and there's a lot of ground to make up."
Australia's Federal Treasurer Josh Frydenberg, left, and Prime Minister Scott Morrison. Photo: AFP
Speaking in Canberra ahead of the figures being released, Reserve Bank governor Philip Lowe said he expected positive GDP growth in the current quarter as well.
"Given these developments, we are now expecting GDP growth to be solidly positive in both the September and December quarters. And then, next year, our central scenario is for the economy to grow by 5 percent and then 4 percent over 2022," Lowe said.
Philip Lowe expects the Australian economy to grow by 5 percent next year. Photo: AFP
"These positive figures, though, cannot hide the reality that the recovery will be uneven and it will be bumpy and it will be drawn out. Some parts of the economy are doing quite well, but others are in considerable difficulty.
"Australia is likely to experience a run of years of relatively high unemployment, unemployment being too high and wage increases and inflation being too low, leaving us short of the Reserve Bank's goals."
Lowe added that: "Even with the overall economy now growing solidly, it will not be until the end of 2021 that we again reach the level of output recorded at the end of 2019."
Household consumption, which makes up almost 60 percent of Australia's economy, grew by 7.9 percent in the September quarter, the largest rise in the 60-year history of the national accounts.
The growth reflects a partial recovery from the 12.5 percent fall in the June quarter.
The Bureau of Statistics noted the rise reflected an increase in spending as Covid-19 restrictions were eased.
However, household consumption remained weak through the year, down 6.5 percent on the September 2019 quarter.
- ABC
