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© Provided by ABC Business Record iron ore prices are boosting Australia’s economy, but are we approaching a crossroads in the COVID recession recovery? (ABC News: Rachel Pupazzoni)

Australia’s economy has bounced back from the COVID recession, growing by a much-better-than-expected 1.1 per cent over the past year.

Even as recently as a few weeks ago, most economists were hoping that Australia’s economy might just get back to where it was before nationwide pandemic lockdowns smashed the economy in late-March, April and into May last year.

But not only is Australia’s economic output bigger than it was before the national lockdown, it has also recovered from the previous quarter’s bushfire and early pandemic-driven decline, and is 0.8 per cent larger than its previous peak. 

The result was powered by a much-better-than-forecast 1.8 per cent expansion over the three months to March, when most economists were expecting 1.6 per cent.

Even those forecasts had been substantially revised higher as recent ABS data that feed directly into the GDP number came in well above expectations.

Analysts are also pleased with the drivers of growth, split between business-driven private investment (which added 0.9 percentage points to the quarterly result) and household consumption (which added 0.7 percentage points).

The ABS said private investment was driven by both business machinery and equipment purchases, up 11.6 per cent in the strongest result since December 2009, and housing investment, up 6.4 per cent.

In turn, both of those areas were supported by government subsidies — temporary full expensing of business investment and the HomeBuilder scheme