International student numbers have risen sharply since the Australian border reopened in February 2022 after COVID-19 pandemic closures, though the pace of visa approvals has slowed recently as the Albanese government tightens the screws on foreign arrivals.
Almost 650,000 student visa holders were in Australia by last December, up sharply from less than 300,000 in 2021.
Consumption understated
NAB senior economists Brody Viney and Taylor Nugent said about 40 per cent of spending by international students was tuition fees, while the remaining 60 per cent was on the consumption of goods and services in Australia.
If that latter category of spending was classified in the national accounts as consumption rather than as an export, then annual consumption growth would have been 1.1 per cent in December, instead of just 0.1 per cent.
The figures suggest that tepid consumption figures understate the true strength of the domestic economy.
“This paints a much stronger picture of domestic demand for goods and services in Australia and helps to explain why businesses in consumer-facing sectors, such as retail and recreation and personal services, have continued to report high levels of capacity utilisation in the NAB business survey,” Mr Viney and Mr Nugent said.
“This will not be news to the RBA, but it does help reconcile the softness in consumption growth with persistence seen in measures of excess demand, such as capacity utilisation in consumer-facing industries.”
https://theoceaniatimes.com/australian-economy/spending-by-international-students-accounted-for-more-than-half-of-australias-economic-growth/#google_vignette
