sydney dec 1 reuters  australias economy slammed into reverse last quarter as the delta outbreak put half the population under lock down though a speedy recovery is already underway as worldbeating vaccination rates set sydney and melbourne free the emergence of the omicron strain is a new threat to the outlook but with 87 of the adult population now double dosed the government is determined to keep the economy open the damage done by selfimposed shut downs was all too evident in wednesdays report on gross domestic product gdp which showed output fell a steep 19 in the third quarter that was still better than markets forecasts of a 27 decline and relatively moderate compared to the 68 quarterly slump suffered last year when the pandemic first struck the annual pace of growth slowed to 39 from 96 in the second quarter but again beat forecasts of 30 and analysts were optimistic the loss would be quickly recouped we expect gdp to surpass its predelta peak this quarter already and to keep surprising to the upside next year said marcel thieliant a senior economist at capital economics who predicted growth of 5 for 2021 with the household savings rate jumping to 198 theres enormous scope for consumption to recover over the coming quarters he added the australian bureau of statistics noted savings had been fattened by government support payments and stock dividends as well as the enforced curb on spending in all household consumption dropped 48 in the third quarter to overshadow strength in government spending and net exports yet the consumer is also leading the recovery with retail sales soaring 49 in october as restrictions were lifted data from bank cards show november was also a strong month culminating in a bumper black friday for retailers consumption has been underpinned by a big buildup in savings and a surprisingly resilient labour market where payrolls recovered all their lockdown losses in october supporting spending power is a boom in house prices which were up 22 in the year to november the median home has risen an average a2436 1737 every week for the past year read more superloose monetary policy is another stimulant as the reserve bank of australia rba seems determined to keep interest rates at a record low of 01 for some time yet the central bank holds its last policy meeting of the year next week and is again expected to signal that no hike is likely until at least 2023 markets are wagering a move could come as early as july next year given the spike in global inflation  though price pressures are not nearly as hot with the main gdp measure of domestic inflation up 23 in the year to september