After months of continued contraction, Australia's economy has now bounced back.
For the third quarter, the country's economy expanded by 3.3%, beating analysts' estimates for the period.
Data published by the Australian Bureau of Statistics on Wednesday showed how the economy has seemingly come out of the pandemic-induced recession thanks to government stimulus and increased economic activity.
The 3.3% expansion also beat average analyst estimates, which pegged the country's economic growth at 2.6% after having contracted 7% in the second quarter.
ABS data showed that the latest quarter's rebound was mainly due to an increase in household spending, which was supported by government stimulus. Over the three months, the government had released a fiscal stimulus of around $221.55 billion. The record low cash rate of 0.1% also boosted credit demand, household consumption, and home acquisitions during the period.
While the economy expanded during the three months to September, Australia's gross domestic production still contracted by 3.8% on an annual basis. Analysts said that while growth may be expected in the fourth quarter, an overall expansion is still not certain.
The Australian government will still need to roll out additional supporting policies to keep economic activity at high levels during the coming months, analysts said. With the economy still struggling to recover, more effort is needed to make sure that the upward trend continues.
Analysts said that it is unlikely that Australia will reach pre-pandemic later this year but it could return to those levels by late 2021.
ANZ Banking Group, Australian's top lender, said that it has seen an upward trend in credit and debit card spending over the past months. The bank said that spending on its cards increased by 28% in the last week of November alone as consumers took advantage of Black Friday and Cyber Monday sales.
"The strong rebound in activity in Melbourne, the broader bounce in consumer and business confidence, along with upside surprises from the high-frequency data are currently suggesting that December quarter growth will be pretty solid," ANZ Banking analysts said in a note to investors.
