There is a lot riding on the government’s fiscal policy moves and the monetary policy easing by the Reserve Bank of Australia (RBA).
But the early signs are that the chance of Australia sliding into a prolonged and severe recession is diminishing as these measures begin to take effect.
The number of home loans approved in December was up by 6.4 per cent from November in seasonally adjusted terms, the third monthly rise in a row and the biggest since 2001.
However, overall lending to home buyers is still down sharply from recent highs, Australian Bureau of Statistics (ABS) data on Wednesday showed.
The number of home loan approvals in December was down by 18.1 per cent from a year before.
But the rot seems to have stopped.
The ABS estimates the current trend to be positive, rising by 1.7 per cent per month.
Borrowing has obviously been stimulated by the increases in the first-home buyers grant from October, with the proportion of loans going to first-timers at a seven-year high of 25.4 per cent in December.
And with the grant boosted even more for new homes, the number of loans to buy or build new homes jumped by 10.6 per cent in December, the biggest monthly rise for seven and a half years.
Investors are still to emerge from their fallout shelters – a 2.9 per cent rise in the value of loans to investors in December was not enough to reel back even half the 6.8 per cent drop in November.
It left lending to investors 24.8 per cent lower than a year before.
Even so, the downwards trend in that category has flattened to 1.3 per cent per month, according to the ABS estimates, one-third as steep as it was earlier last year.
Whether the effect of the higher grant will be persistent or wear off quickly remains to be seen, but there are other positives working on the economy.
The December lending figures do not reflect the full effect of the interest rate cut that month and we have had another since then.
The lower exchange rate will have the same effect on the economy as even more rate cuts, and the further fiscal stimulus currently working its way through federal parliament will prime the pump even further.
It’s early days yet.
Confidence, as shown by the Westpac-Melbourne Institute index of consumer sentiment, also released on Wednesday, is still fragile.
The index fell to 85.8 in February from 89.9 in December, continuing the weakest run of confidence readings since the early 1990s recession.
The results echoed the NAB’s survey a day earlier, showing business confidence at its lowest ebb in the history of the survey which includes the 1990s recession.
But at least the hard economic figures are sowing a glimmer of hope and some evidence that policy measures really are having an effect.