Consumption Growth
Understanding consumption growth in Australia
According to statistics, Australia’s gross domestic product in 2019 has been stated to hit a new low. Due to this, it is believed that the inflating of commodities and services will be on the rise in Australia. The difficulty in the labour market and a strain in wages are questionable for the consumption growth and the force of inflation. However, the gradual decrease in oil price is expected to have a positive effect on consumption growth. Also, there are a number of expectations that with the steady reduction in oil price, there would be slight growth in prominent areas of the economy. This would also speak volume to consumption growth.
Towards the end of 2019, when the economy consumption growth was reviewed, it was stated that the consumption growth of the year was the lowest in the past couple of decades. This was due to the decline in the rate at which people spend on services and products such as insurance and finance. Although according to economic evaluation, it was believed that the consumption growth was expected to increase to something around 3%. The evaluation foreseen almost came to pass when the growth of the consumption rate hit 2.3 per cent.
The consumption growth, when reassessed, it was influenced by the steady decline in the revision. This revision has been hitting different lows over the year, and in the previous three years, the consumption growth was slightly over 0.2 percentage. This point speaks a lot about the economic condition of Australia.
Again, disposal income on housing also has an integral role in measuring consumption growth. Recently, this factor has also weakened the consumption growth because of the steady increase in payments of tax and the lack of improvement in the area of non-labour income. When these factors are not evenly balanced, consumption growth would be affected by it. In order to find a solution to this problem posed by these two factors, there is a need to improve employment growth. When the employment growth improves, the disposable household income would also be able you rely and balance safely on it. When this happens, there would also be changes to the wage growth as it would also increase exponentially.
In order to improve consumption growth, there is a need to cut down the income tax. This step has been viewed by many as a move in the right direction for the economy of the country. Again, the consumption growth would be well regulated and stabilised if the disposable household income grows at the same rate as it.
It is up to the economic institutions to put in place measures which would see to that the consumption rate increases.