CANBERRA, AAP – The latest national accounts are expected to show the economy rebounded strongly in the December quarter and avoided the pain of another recession as a result of the COVID-19 pandemic.

Reserve Bank governor Philip Lowe says the Australian economy has since proved resilient in the face of the Omicron variant, but warned the war in the Ukraine is a new major source of uncertainty.

Leaving the cash rate unchanged at a record low 0.1 per cent at Tuesday’s monthly board meeting, Dr Lowe said there are uncertainties about how persistent the pick-up in inflation will be given recent developments in global energy markets and ongoing supply-side problems.

“While inflation has picked up, it is too early to conclude that it is sustainably within the target range,” Dr Lowe said.

“The board is prepared to be patient as it monitors how the various factors affecting inflation in Australia evolve.”

Economists expect the RBA will lift the cash rate later this year.

Meanwhile, the Australian Bureau of Statistics will release the national accounts for the December quarter on Wednesday.

Household spending is expected to be the key driver of a hefty growth expansion in the final three months of 2021, with some economists now thinking it could be as large as four per cent.

The economy contracted by 1.9 per cent in the September quarter due to the lockdowns in NSW, Victoria and the ACT associated with the impact of the Delta variant of the coronavirus.

A recession, like that seen in 2020, is when there are two consecutive quarters of economic contraction.

Retail spending – a core part of the economic growth equation – scored a record 8.2 per cent increase in the December quarter after sinking 4.4 per cent three months earlier.

Business inventories – stock on shelves and in warehouses – is expected to have contributed one percentage point to growth in the quarter, while exports are now predicted to make only a small contraction following Tuesday’s international trade figures.

Business investment was broadly flat in the quarter, but residential construction was unexpectedly weak.