Westpac write "this GDP print indicates...>

AUSTRALIA: Westpac write "this GDP print indicates that the Australian economy

slowed in the second half of 2018 from around a 4% annualised pace in the first

half to a 1% annualised pace in the second half. Information around consumer

spending was soft, with a rise of only 0.4% in Q4 following a 0.3% increase in

Q3. Annual growth for consumer spending is now 2.0%, down from 2.9% in June. The

challenge for the Reserve Bank will be to credibly maintain its GDP growth

forecasts at 3% in 2019 and 2.75% in 2020. Expecting a lift in the growth

momentum from 1% to 3% could only really be justified if the economy was

expecting to benefit from a significant stimulus. But global growth is slowing;

the residential construction cycle has clearly turned; the AUD remains in a

stable range; monetary policy is on hold and fiscal policy will continue to be

constrained by the perceived need of both political parties to predict a surplus

in 2019/2020. Consequently the Reserve Bank is likely to see the need to further

revise down its growth forecasts when it announces its revised forecasts with

the May Statement on Monetary Policy."