The Australian Bureau of Statistics (ABS) has released national accounts data for the March quarter of 2026.
Following a batch of positive results, headline GDP was 0.3% over the March quarter, with per capita GDP falling back into negative territory (-0.1%).
As illustrated in the next chart, per capita GDP has declined in 10 of the past 15 quarters and is tracking 0.5% below its level in Q2 2022:
Labour productivity (GDP per hour worked) fell by 0.6% in the March quarter and remains 5.1% below its March 2022 quarter peak:
In fact, Australia’s labour productivity growth has sharply trended down over the past 30 years:
As a result, Australia’s long-run trend real per capita GDP growth has plummeted, which has occurred alongside the boom in net overseas migration:
The Reserve Bank of Australia (RBA) is facing a nightmare scenario of embedded inflation driven by excessive government spending, excessive immigration, and cost-push energy inflation imported from abroad.
If it hikes too hard in a bid to stem inflation, the RBA will push the economy into a headline recession, not just a per capita one.
