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By Pete Wargent

Economic growth slows to a halt at 0.2pc

Retail turnover increased by just +1.1 per cent over the year to January.

After accounting for very rapid population growth and price inflation, this represents quite a significant slowdown for the sector.

Total Retail Turnover Level Current Prices

Source: ABS

The national accounts reflected a very similar picture - the Aussie economy grew slightly in Q4 2023, up by 0.2 per cent, mainly thanks to mining exports and public spending.

However, after accounting for population growth, GDP per capita fell by -1 per cent over the past year.

Gross Domestic Product


Looking at the GDP per capita index shows the extent of the recent slowdown, particularly as compared to the early years of the resources boom.

For four quarters in a row now, the economy has failed to grow as measured in real per capita GDP.

Gdp Per Capita

Higher interest rates have had the desired effect, and have slowed the economy as expected.

If anything, it looks like interest rate hikes might have gone too far, sending mortgage interest payments spiralling higher.

This graphic isn't population-adjusted, but an increase in mortgage interest of +162 per cent from the lows would have to hurt!

Interest On Dwellings

The household saving ratio was notionally 'positive' in increasing to 3.2 per cent for the December quarter.

But this is a derived estimate, and after accounting for superannuation contributions and mortgage repayments, many households are now undoubtedly running down their buffers.

Household Saving Ratio

Overall, the economy has ground more or less to a halt, and has been going backwards over the past year in per capita terms.

Australia's 3-year bond yield is at the lowest levels in a while down at 3.63 per cent, with many households now waiting for some welcome relief on their mortgage payments.

About Pete Wargent Pete is a Chartered Accountant, Chartered Secretary and has a Financial Planning Diploma. Using a long term approach to building businesses, investing in equities, & owning a portfolio he achieved financial independence at the age of 33. Visit his blog
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