Australia Macro Service > Australia Data Insights

Growth momentum falls back in the December quarter

As expected the pace of growth moderated in the December quarter, with GDP rising 0.4% q/q, down from 0.7% in Q3. The slowdown was surprisingly modest given the most recent data, with a 1% q/q rebound in consumer spending offsetting a 0.5%pt drag from net exports and a 1.2% decline in total investment.

We expect the fall in exports to prove temporary with positive momentum in the global economy and new LNG capacity set to support growth. Domestically the outlook is mixed, with non-mining business investment growth firming but consumer spending expected to moderate given softer labour market conditions. We also expect residential construction activity to continue to decline. We see GDP growth at around 2.5% this year and next.

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