Australian Economy Grew 0.6 Per Cent In June Quarter

Australian gross domestic product (GDP) rose 0.6 per cent in the June quarter 2025 (seasonally adjusted, chain volume measure) and 1.8 per cent compared to a year ago. This release includes the first estimates of the 2024-25 financial year, with GDP rising by 1.3 per cent for the 2024-25 financial year, according to figures released today by the Australian Bureau of Statistics (ABS).

Tom Lay, ABS head of national accounts, said: 'Economic growth rebounded in the June quarter following subdued growth in the March quarter, which was heavily impacted by weather events.'

Domestic final demand was the main driver of growth led by household and government spending. Public investment was the largest detractor from growth.

Net trade also contributed to GDP growth, led by exports of mining commodities.

GDP per capita increased 0.2 per cent this quarter, following a decrease in the March quarter.

Household spending rose 0.9 per cent in the June quarter after a 0.4 per cent rise in the March quarter. Discretionary spending led the rise increasing 1.4 per cent, while essential spending increased 0.5 per cent.

Tom Lay said, 'End of financial year sales and new product releases contributed to rises in discretionary spending on goods including furnishings and household equipment, motor vehicles and recreation and culture goods'.

'Households took advantage of the proximity of Easter to ANZAC day to extend their holiday break, resulting in rises in discretionary services such as hotels, cafes and restaurants and recreation and culture services,' Mr Lay added.

Health led essential spending in the June quarter, with households accessing more medical services amid a strong flu season. Food spending also increased, supported by increased promotional activity from major supermarket chains.

Public investment fell 3.9 per cent and was the largest detractor from growth. Excluding the Covid period, this was the largest fall since September 2017. The fall was driven by a decrease in state government expenditure on transport and health infrastructure, and a fall in defence investment. Defence investment remains elevated in annual terms.

Government final consumption expenditure rose 1.0 per cent in the June quarter after recording 0.3 per cent growth in the March quarter.

National non-defence expenditure was the biggest contributor with the strongest quarter on quarter rise in social benefits to households over the 2024-25 financial year. High demand for health services resulted in rises in spending on the Medicare Benefits Schedule (MBS) and Pharmaceutical Benefits Schemes (PBS). Spending by the Australian Electoral Commission (AEC) to conduct the 2025 federal election also contributed to the rise in National non-defence expenditure.

Defence spending also rose due to military exercises this quarter. State and local spending fell as electricity rebate schemes wound down.

Private investment remained relatively unchanged, increasing 0.1 per cent in the June quarter, following a 0.6 per cent rise in the March quarter. Increases in intellectual property products and housing investment were offset by falls in non-dwelling construction.

Total dwelling investment was subdued following strength in the March quarter. The fall in non-dwelling investment was driven by new engineering construction with falls in renewable energy projects and mining investment. New building investment also fell with a fall in office and warehouse investment.

Net trade contributed to growth in the June quarter, adding 0.1 percentage points to GDP.

Growth in exports was driven by goods, led by iron ore and LNG, both of which saw a rebound in production following severe weather disruptions in the March quarter.

Exports of services also increased, driven by short-term visitor arrivals, particularly those travelling to visit family and friends in Australia.

Imports of services was the largest detractor to net trade led by travel services. While the number of Australians on holiday overseas remained steady, average spending per traveller increased with an increase to long-haul destinations such as the UK and Italy. Imports of goods also detracted, led by consumption goods including cars and clothing and footwear.

The household saving to income ratio fell to 4.2 per cent in the June quarter from 5.2 per cent in the March quarter. The rise in gross disposable income of 0.6 per cent was outpaced by a rise in nominal household spending of 1.5 per cent.

The rise in gross disposable income was driven by growth in compensation of employees (+1.2 per cent). Fewer severe weather events during the quarter resulted in lower insurance claims paid compared to the previous quarter and partly reduced total household income for the June quarter.

Easter Monday and ANZAC day occurred 3 days apart in the same week in 2025. These holidays are in close proximity infrequently with previous occurrences in 2019, 2014, 2011 and 2003. It will occur again in 2030 and 2041. This close proximity may have impacted economic aggregates such as hours worked and household consumption in the June quarter 2025, with increased numbers of people taking time off between the two public holidays. Statistical significance tests have not shown any significant impacts but will be repeated when we have September quarter data. On this basis, no additional seasonal adjustments have been made.