MNI 5 THINGS. Australia Q4 GDP Data To Show Slowing Growth

     SYDNEY (MNI) - Australian National Accounts data for the December quarter

will be released Wednesday and will be closely watched by the Reserve Bank of

Australia for growth forecasts.

     Here are five things to look for in the release from the Australian Bureau

of Statistics.

--Annual growth expected at 2.4%. 

     The market is anticipating Q4 growth data tomorrow to come in at around

0.2%, delivering an annualised rate of 2.4%.

--Growth slowing rapidly. 

     The Q3 data showed seasonally adjusted 0.3% growth in the September quarter

for an annualised GDP figure of 2.8%, and this result came in much lower than

market expectations. The Q2 growth figure was 3.0%, illustrates the pace at

which the Australian economy is slowing.

--Implications for RBA. 

     The RBA kept official interest rates on hold at 1.5% this week and now has

a balanced view on whether the next movement should be up or down, with

financial markets now factoring in a cut. Last year, the RBA was anticipating

growth would average 3.5% over 2019, but its own forecast now is for 2.4% in Q2

improving to 3.0% by the end of the year. If GDP continues to fall short of

these forecasts, the RBA may change its outlook and become more dovish on rates.

--International Trade undermining growth. 

     The ABS Balance of Payments data published Tuesday show international

trade, which regularly makes a positive contribution to GDP growth, will instead

detract 0.2 percentage points from the result.

--Government spending to the rescue. 

     Government spending, largely on infrastructure projects, is seen as one

factor which could stiffen up tomorrow's result amid slowing in other sectors.

ABS data shows that Government spending was up 1.8% in the December quarter,

which is expected to make a 0.3 percentage point contribution to GDP.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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