Country Economic Forecasts > Australia

Retail turnover data confirm that consumer spending is the weak link in the economy. GDP growth seen at 2.4% this year, but continued strong jobs growth provides some upside risk to our forecast

Households continue to exert a drag on the economy, with the Q4 retail turnover data confirming a broadly subdued picture for spending. But continued strong growth in employment presents some upside risk, particularly with consumer sentiment moving into positive territory in recent months. Investment spending continues to build, with capital goods imports rising 12.4% in 2017, and the positive global environment will provide support for export volumes. We still see GDP growth at 2.4% this year and next, but recent developments have shifted the risks to the upside.

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