The ANZ Economics Team is forecasting a 0.5% q/q increase in Australia’s Q4 GDP today vs 0.4% expected, which would suggest that growth remains modestly below trend.
“ANZ is forecasting a 0.5% q/q increase in Q4 GDP (mkt: 0.4% q/q) following the 0.9% q/q rise in Q3. Year ended growth is expected to be 2.6% (mkt: 2.5%), suggesting that growth remains modestly below trend.”
“Overall, the key themes that have been in play for some time look to have persisted in Q4. Housing continues to be a key driver of growth, while consumer spending is improving (along with a better labour market). Business investment is weak, with mining investment falling away sharply and no pick-up in non-mining business investment in sight.”
“Net exports look set to be neutral in Q4, although this follows a strong 1.5ppt contribution in Q3. An in-line with consensus print will have few policy implications as it would be broadly consistent with the RBA’s 2½% y/y February SoMP forecasts.”
“More important for the RBA, however, will be incoming activity and inflation data. The Bank continues to maintain a watching brief on global developments, while the focus for the domestic economy remains on labour market developments.”
“Indeed, if the improvement in the unemployment rate stalls we expect, the RBA will feel uncomfortable sitting pat with inflation at the low end of the target band.”