Australian Q1 Gdp Disappoints

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Australian Q1 Gdp Disappoints

Australian Q1 Gdp Disappoints On Higher Inflation

According to official data released this Wednesday, Australia's Q1 GDP growth was below the forecast. The reason for such a lackluster print was due to weaker exports and weaker consumption.

combination of weak exports and weak consumption has seriously effected the Australian economy, as evident from the Q1 GDP print.

Australian Economy Showed 1.1% Growth

During Q1, Australia's economy showed a growth of 1.1% y/y, according to the Australian Bureau of Statistics. However, the forecast for the Q1 GDP growth was 1.2%, which shows that the actual value missed it by -0.1%.

Similarly, the Q4 GDP growth of Australia was 1.5%, which is still quite high compared to the Q1 2024 print. A comparison of the recent GDP reading against the forecast and the previous forecast shows that the Australian economy is really struggling.

On a q/q basis, a change of +0.1% was seen against the forecast of 0.2% as well as the earlier reading of 0.2%. Once again, the reading missed the expectations and shows that the Australian economy is under pressure.

It looks like consumer spending in Australia has taken a hit in 2024 due to sticky inflation and an environment of higher rates.

While the GDP growth was below expectations, it is still in the green, mainly due to higher government spending on energy and household benefits. As a result, household spending during the same period remained positive as well.

However, business spending took a hit which was a major source of support for the Australian economy in the past. During the Q1 2024, the total capital expenditure decliend by 0.9%.

Similarly, a decline in net exports has also shaved around 0.9% from the GDP (yearly) figure. On this front, the demand from major markets such as China has gone down during the quarter.

Another bad news for Australia is that the country has also entered into a current account deficit during Q1 2024.

According to experts, the GDP data shows that the Australian economy has cooled down rapidly due to higher rates and inflation.

Although inflation remains high, it is still not clear whether the RBA will make any changes to its rate policy during the next few months.

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