Page 550 - Week 02 - Thursday, 24 March 2022
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There is no doubt that our economy has demonstrated significant resilience in the face of disruptions to economic activity caused by the pandemic over the last two years, and the economy is expected to continue to grow over the coming period. While the pandemic is by no means over, compared to the situation at the time of the release of this fiscal year’s budget around six months ago, we have been able to lower the necessary public health social measures. This has seen the easing of density limits, the reopening of both interstate and international borders and the resumption of public events.
Together, as a community, we carefully emerged from the lockdown in October 2021 as we achieved global-leading vaccination rates. Our resilient economy has been supported by increased consumer confidence as a result of a well-managed public health situation. This increased consumer confidence is reflected in the strong growth in household consumption of nearly 8½ per cent as we came out of the lockdown through the December quarter 2021.
I have used the words “cautious optimism” many times this year to describe both the public health outlook and the economic outlook. As you can see from the budget review, that cautious optimism is the right tone at this time. While the Delta outbreak and the necessary lockdown in the territory resulted in a downturn in economic activity during the September quarter last year, there was a very strong bounce back in the December quarter, a V-shaped recovery, with state final demand increasing by 1.9 per cent.
Recent data shows that the ACT is likely to record positive growth for the first half of calendar year 2022. The budget review forecasts gross state product to grow by 2½ per cent in the current fiscal year, increasing to 3¼ per cent in 2022-23, and stabilising at around our long-run growth rate of three per cent per year across the forward estimates. These forecasts reflect anticipated improvements in the private sector in the fiscal year 2022-23, coming on the back of rising consumer and business confidence and stronger demand across the economy.
We have all witnessed the spread of Omicron and the disruptions it has caused, particularly to the labour market. However, it is not expected to have a lasting impact on our jobs market. Labour force data in February, along with the trajectory of other employment market indicators, shows that a strong jobs recovery is underway, with the unemployment rate falling to three per cent, the lowest of all Australian states and territories. The budget review forecasts employment to continue to grow across the forward estimates period.
Since the beginning of the pandemic, in a period of heightened uncertainty, the government has taken the approach of being transparent about these uncertainties. We knew that keeping the community informed about the future would give households and businesses the confidence needed to support their own spending and investment decisions, despite what is an overarching uncertainty of these times.
We released the first set of forward estimates of any Australian jurisdiction after the pandemic was declared. Since that August 2020 economic and fiscal update, we have
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