MNI DATA IMPACT: Australia Annualised GDP At Lowest Since GFC

By Lachlan Colquhoun

     SYDNEY (MNI) - Australia's economy grew by 0.4% q/q in the first quarter of

2019, accelerating from the 0.2% growth recorded in Q4, data released Wednesday

by the Australian Bureau of Statistics showed.

     The y/y figure moved lower, however, to 1.8% through Q1 against 2.3% in Q4.

This is Australia's lowest rate of growth since the global financial crisis of

2009.

     Here are other points of note from the release:

RBA rate cut context 

The Reserve Bank of Australia cut official interest rates yesterday by 25 bps to

a new record low of 1.25% and has telegraphed the prospect of more to come. The

Bank's growth forecasts are for 2.75% growth for 2019 and 2020, and today's

result is way off that and going in the wrong direction. Long term average

growth for the Australian economy is 3.5%.

Government spending features 

Government spending was a significant contributor to growth reflecting ongoing

delivery of services in disability, health and aged care. Government spending

contributed 0.2 percentage points to GDP growth

Exports still strong 

Net exports contributed 0.2 percentage points to GDP, reflecting Australia's

strong export performance driven by iron ore.

Consumer and housing lacklustre 

Household spending slowed and contributed a modest 0.1 per cent to growth

reflecting reduced spending on discretionary goods such as furnishing and

household equipment, recreation and culture and hotels, cafes and restaurants.

Expenditure on private dwellings detracted 0.1 percentage points, reflecting the

housing and construction slowdown.

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