The ACT would be one of a very small number of jurisdictions globally that had grown their economies during the coronavirus pandemic, Chief Minister Andrew Barr told ACT parliament on Wednesday.
The ACT's housing market has recovered faster than expected, with significant growth in other sectors driven by money redirected to the local economy while overseas travel is restricted.
The number of unemployed people in the ACT has also drawn level with the number of job vacancies in the territory.
Mr Barr also said the territory would likely outperform the 2 per cent growth in the gross state product forecast for 2020-21 in February's budget.
"Economic growth has been supported by incredibly strong household consumption, dwelling investment and, pleasingly, a faster recovery in private business investment than we had previously expected," Mr Barr said.
The Chief Minister pointed to Australian Bureau of Statistics figures which showed a 3.3 per cent increase in dwelling investment in the ACT, and a 14.9 per cent spike in retail turnover.
"Since the budget's release, household consumption in the ACT increased by 4.2 per cent in volume terms in the December quarter and significant growth in areas outside of the retail industry was also observed," Mr Barr said.
Mr Barr said "basic economics" showed record low interest rates were fuelling an asset price bubble.
"This is one of the other features that is flowing very strongly into the increase in house prices, is that houses are bigger and better than they were because hundreds of millions of dollars has been poured into them through renovation projects," he said.
"The quality of Canberra housing, which was already the highest in the nation, has got even better as a result of household's shifting their consumption away from internationally tradeable services, like overseas holidays, and spending it on their home."
There were currently 8200 job vacancies in the ACT, the same number of unemployed people, Mr Barr said.
"We're heading back to the situation we were before [the pandemic] where we had more job vacancies than unemployed people. This obviously puts some pressure on some industry sectors to find skilled staff," he said.
Australian Bureau of Statistics figures released on Wednesday showed national retail trade had grown by 1.4 per cent in March.
Figures released by the bureau also showed most people who dipped into their superannuation during the pandemic put it towards their mortgage repayments or rent bill.
The statistics showed 15 per cent of people used it to pay personal debts and 13 per cent added the money to their savings.
Public policy expert Professor John Wanna said he "couldn't disagree" with the Chief Minister's positive assessment of the ACT's recent economic outcomes.
"It's not hyperbole; certainly the ACT has fared better than most [jurisdictions] economically in recent months," Professor Wanna said.
"Having the public sector as a large employer played into the ACT's hands during the COVID period.
However Professor Wanna said there needed to be a note of caution.
"The ACT has racked up significant debt in its economic responses to the COVID pandemic, as have all the states and territories," he said.
"But the issue for the ACT is that it will take longer to pay off that debt burden because it has a relatively small population base and a small tax base to draw from."
with Peter Brewer
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