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Posted: 2023-02-28 17:54:02

Today we learn how the economy performed in the three months to December last year.

Gross domestic product (GDP) figures will be released by the Bureau of Statistics at 11:30am AEDT. 

It's backwards-looking data but it's still significant.

Most economists agree the data will show the economy grew solidly at the end of last year.

NAB sees a 0.8 per cent growth in the fourth quarter of 2022.

"Household spending looks to have remained resilient to rising rates and inflation," NAB chief economist Alan Oster said.

Gross domestic product basically consists of growth in consumption spending (shoppers), business spending and investment, government spending and the difference between exports and imports.

It is the main way we currently measure activity and growth in the economy.

It is clear from the partial data already available that Australians spent quite a bit on services late last year, and that will have given the economy a bit of a kick.

People sitting at a long table sharing a meal and drinks
Spending on eating and drinking out, along with entertainment, has continued to rebound.(Unsplash: Priscilla du Preez)

"In part, this reflects the ongoing recovery in services spending," Mr Oster noted, as people resume lifestyles closer to pre-COVID norms.

"Elsewhere, investment looks to have fallen slightly, while net exports will provide a large boost, partially offset by the stock cycle."

ANZ Bank has upgraded its assessment of how the economy performed.

"Key partial indicators released over the past two days have mostly netted out, but we are nudging our fourth quarter GDP forecast up a touch to +1.0 per cent, (from our initial forecast of +0.9 per cent).

"Annual GDP growth for 2023 is forecast to be a solid 3.0 per cent.

"A 1.0 per cent gain for the quarter would be a solid result and suggests the economy ended the year with quite a bit of momentum despite aggressive monetary tightening."

Wages, consumption data crucial

As always, while examining GDP, it's worth remembering this is a look in the economic rear-vision mirror.

Given that, economists will be combing today's data to look for clues as to how the economy is performing now and, perhaps, provide a window into the economic outlook.

"While the partial data suggest a strong outcome for GDP, it will be the inflation and wages indicators in [today's] GDP report that will be key from a policy perspective," ANZ's economists noted.

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