Australia's Economy Stays Subdued as Consumers Rein In Spending
Australia's economic weakness persisted in the three months through June as consumers hunkered down in the face of elevated borrowing costs and stubbornly sticky inflation.
Gross domestic product advanced 0.2% from the prior quarter, matching economists' estimate, Australian Bureau of Statistics data showed Wednesday. From a year earlier, the economy grew 1% from a upwardly revised 1.3% and forecast of 0.9%.
"Excluding the Covid-19 pandemic period, annual financial year economic growth was the lowest since 1991-92 ââ-š¬Ã¢â‚¬ the year that included the gradual recovery from the 1991 recession," Katherine Keenan, ABS head of National Accounts, said in a statement. GDP per capita slid for a sixth consecutive quarter, she added.
The Australian dollar held onto its declines, as did the interest-rate sensitive three-year government bond yield.
With annual growth slowing from a decade average of 2.4%, the data are likely to ease concerns about demand-driven inflation pressures in the economy. That suggests the RBA can remain in a holding pattern for a while in order to assess the economy, with the cash rate currently at a 12-year high of 4.35%.
The RBA reckons the second quarter was the nadir of the slowdown, predicting the annual expansion will accelerate to 1.7% by year's end before picking up to 2.5% in late 2025.
Bloomberg Economics expects growth will remain subdued this year, as the cumulative impact of higher rates damps household demand and housing-related activity.
Source : Bloomberg
