Overview

GDP rose by a large 3.3% in Q3, following the sharp 7% fall in Q2. As expected consumer spending drove the rebound amid the reopening across most of the economy as the virus was contained. Victoria was the clear exception, with spending falling a further 1% in the quarter, after seeing strict lockdowns for much of Q3 –in contrast with the sharp 11% rise across the rest of Australia. Nevertheless, the overall turnaround in consumer spending, housing activity and stocks, supported by ongoing strength from the public sector, more than offset a large drag from net exports and another notable fall in business investment. As a result, today’s data mark a strong start to the economic recovery, although the level of activity remains 4.2% below pre-virus levels and down 3.8% from a year ago. NAB continues to expect another strong rise of around 2% in Q4, as Victoria exits lockdown and solid growth over 2021 so that activity recovers to pre-virus levels by the end of next year.

Find out more in the NAB Australian GDP Q3 2020 Report