‘The weakness in today’s data extends beyond the weather, and the slowdown in the domestic economy has occurred at a time when the global economic backdrop has improved.’ — Michael Workman, Commonwealth Bank
The Australian economy expanded roughly in line with analysts’ forecasts in the March quarter, official figures revealed on Wednesday. The Australian Bureau of Statistics reported that the economy grew 0.3% in the Q2, following the preceding quarter’s expansion of 1.1% and slightly topping expectations for a 0.2% growth rate. On an annual basis, Australia’s GDP rose 1.1% in the second quarter of this year but remained below the required rate. Household consumption, public consumption and inventories contributed 0.3%, 0.2% and 0.4%, respectively, to GDP growth in the Q2. However, the gains were offset by net exports and dwelling investment. Exports dropped 1.6%, while imports rose 1.7%. Thus, the contribution of exports was negative. The public sector, including both consumption and investment, added 0.1% to economic growth, with public infrastructure posting a 0.1% decline. Nevertheless, the Q2 slowdown was expected by the Reserve of Bank of Australia, which held its policy unchanged at its meeting on Tuesday. However, the Bank expressed optimism over the domestic outlook.
