Let’s start at the beginning.

What is GDP?

It’s a single number that has come to embody a huge amount of importance, far beyond what its creators wanted. In fact, is creators warned peoplenotto give it the kind of importance it has today, but we’ll have to leave that for another day.

GDP stands for “gross domestic product.”

In plain English, it’s the total amount of goods and services that were produced by Australia in a specific period.

You can count GDP in a few ways, but one of the main reasons why we count it is to know how muchmoneywe’ve made from our recent economic activity. The more money we have, it’s assumed, the greater the chances that our material standard of living could improve too, if we spend that money wisely.

Now, when the number for the quarterly GDP is published, it’s useful to remember that it’sbackward looking.

It’s telling us how much economic activity we’ve done in the recentpast.

So, our economy increased by 0.9 per cent in the June quarter, and by 3.6 per cent compared to last year’s June quarter.

But that’s why these numbers won’t show any impact from the Reserve Bank’s interest rate increases.

Economists say it usually takes around six months for an increase in interest rates to show up in this kind of data.

And even though the RBA has been jamming the breaks on dramatically, RBA officials believe there are enough households in Australia with so much money stashed away in savings that those households will be able to keep spending their way through these rate rises for a while.

So, we won’t be seeing a significant slow-down in GDP for ages.