MNI DATA PREVIEW: Australia Q1 GDP Growth Still Seen Sluggish

By Lachlan Colquhoun

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

be released on Wednesday. Here are five things to look for in the Australian

Bureau of Statistics release.

Another soft result expected 

Growth for the March quarter is expected to come in at 0.4%. While higher than

the 0.2% for the last quarter of 2018, this would bring annualised growth down

to 1.7% from 2.3% in December. At 1.7%, growth would be at its lowest rate since

the global financial crisis of 2009.  

RBA rate cut context  

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

points to a new record low of 1.25% and has telegraphed more to come. The Bank's

growth forecasts are for 2.75% growth for 2019 and 2020, which would seem overly

optimistic.

Per capita recession. 

In the last quarter of 2018 Australia recorded its second straight quarter where

the economy shrank on a per capita basis. While tomorrow's quarterly result is

expected to be marginally in positive territory, on a per capita basis it could

be the third consecutive quarterly contraction. Australia has not been in a full

recession since 1991.

Construction a drag 

The construction sector shrank by 0.1% in the December quarter for an annualised

fall of 3.7%. It is expected to drag tomorrow's result lower.

State by State 

Queensland was the best performing state in Q4, growing by 0.9%, but devastating

floods in February could deliver a lower result tomorrow. Victoria, one of the

powerhouse states along with NSW, grew 0.6% but disappointing retail sales

results this week have hinted at a slowdown.

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

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