This suggests that the various policy responses and the economy’s own adjustment capacity have generally been working as they should towards stabilising overall outcomes, in the face of the much bigger external shocks we have faced. That said, achieving the sort of growth we aspire to has become more difficult.
Average output growth has been lower over the past five years in Australia, as it has in all other advanced economies. Moreover, the challenges ahead are substantial and will require the appropriate responses. In shaping those responses, we need to be sure to draw the right conclusions and lessons from the experiences of recent years.