Low Expectations for Australia GDP

Second quarter growth data will likely paint a grim picture of Australia’s economy on Wednesday as it reels under slowing exports and consumption.  Gross domestic product (GDP) growth decelerated to 0.4 percent on quarter, according to a Reuters poll, following a 1.1 percent expansion in the first quarter.

“A slowdown in exports after the first quarter’s unsustainable surge is the main driver,” Moody’s Analytics wrote in a note. “Household consumption also slowed as consumers lost their nerve after the ‘tough’ federal budget.”  In the three months to end-June, the seasonally-adjusted trade deficit was $4.8 billion, compared with an almost $3 billion surplus for the previous quarter, according to the Australian Bureau of Statistics (ABS).

However, some economists believe a soft GDP reading would merely be “smoke without fire.”  “A soft or negative Q2 [reading] for GDP will create plenty of headlines. We wouldn’t read too much into it though,” said National Australia Bank. “[It would follow] a rapid Q1 – so probably best to read these two numbers together.”


This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.