Country Economic Forecasts > Australia

Data confirm mixed picture, with retail sales weak but business surveys strong, and continued improvement in global economy providing some support. We expect GDP growth of 2.3% in 2018 and 2.6% in 2019

The high frequency data continue to show a mixed picture. Retail sales data for Q3 confirmed that households are still struggling, with turnover in real AUD terms increasing by just 0.1%. But the business surveys remain comfortably in positive territory, and we are now less pessimistic about the scale of the downturn in housing construction. The supportive growth environment in the global economy is also helping, with merchandise exports up 2.9% m/m in September (16.1% higher than a year ago). Although we remain concerned about the outlook for consumers given the weakness in wage growth and high levels of debt, the stronger outlook internationally and the continued robustness of the business surveys should provide enough impetus to deliver GDP growth of 2.3% in 2018 and 2.6% in 2019.

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