Australia's economic growth ground to a near halt in the second half of last year, official data showed today.

The economy grew at 2.3% last year, Australia's statistics agency said, but slowed considerably in the second half of the year as consumer spending weakened and storm clouds gathered in the long-booming housing market. 

Growth for October to December stood at 0.2%, after a 0.3% reading in the previous three months. 

The figures are a setback for conservative Prime Minister Scott Morrison, who has based his re-election campaign on his stewardship of the economy. 

On the hustings, he has repeatedly warned Australians that electing the centre-left Labor party in an expected May election would spell an end to 28 years of continuous growth. 

It was the increase in public spending of 1.8% in the fourth quarter – as Morrison opened his chequebook for a slew of pre-election community programmes – that helped the economy avoid tipping into negative territory. 

Treasurer Josh Frydenberg tried to strike an optimistic note, telling reporters that the "economy and its fundamentals are strong". 

"The fact that we are growing at a faster rate than any G7 country except the US is testament to that," he said. 

But the opposition Labor Party said the figures showed the government had "lost the moral authority to campaign and talk about the economy". 

Shadow treasurer Chris Bowen seized on the fact that with population growth stripped out, the latest figures confirmed a "per capita" recession. 

GDP per capita contracted by 0.2% for the fourth quarter, after shrinking 0.1% in the previous three months. 

"For the first time in 13 years, we have had two negative quarters, per head, of economic growth," Bowen told reporters.

Economists voiced concern about underlying weaknesses in the G20 economy. 

"The aggregate number looks OK because it is being supported by population growth, but when you drill down to the actual numbers, spending per head is actually slowing, which is more representative of a fragile economy," JP Morgan economist Tom Kennedy said. 

With Aussie property prices tumbling, debt at high levels and wages growth remaining soft, "there's not a great deal of discretionary income out there for consumers", he added. 

Australia's central bank earlier this week kept interest rates at a record low of 1.5% as it waits to see if a strong labour market – with the jobless rate at 5% – feeds into higher wages. 

But markets are increasingly expecting up to two 25-basis-point cuts by the end of 2019.