The Australian economy is expected to post another weak growth result in the December quarter of 2023. It is losing its sheen and tipped to show lacklustre growth in the national accounts. The Australian Bureau of Statistics will release the nation’s economic report card on Wednesday. Slowing growth is a consequence of higher interest rates and inflationary pressures, with the September quarter recording a modest 0.2% lift, falling below economists’ expectations.
National Australia Bank predicts another lacklustre 0.2% quarterly GDP print, rising by 1.4% over the year, making it the lowest annual growth rate since 2000. Economists at the bank attribute the weak growth to a slowdown in household spending. They anticipate a similar pattern to what was seen in September. Business investment may counterbalance these weaknesses, especially in non-residential building.
The result in line with NAB forecasts aligns closely with Reserve Bank expectations for economic activity in the December quarter. Looking ahead to 2024 and 2025, policy decisions will become increasingly important as the bank aims to maintain gains in the labor market. Treasurer Jim Chalmers has warned of “quite weak” economic growth expected this week, emphasizing the importance of a soft landing in the domestic and global economy.
Additional key data releases are scheduled for the week, including building approvals, balance of payments, government finances, lending indicators, and international trade in goods. Despite the economic concerns, the Australian share market reached an all-time high, buoyed by positive company earnings and hopes for interest rate cuts. The S&P/ASX200 index closed above 7700 for the first time, while the broader All Ordinaries surpassed 8000 points.