The Australian growth figures for the fourth quarter will be published on Wednesday, March 6. Economists at Commerzbank analyze Aussie’s outlook ahead of the Gross Domestic Product (GDP) report.
No recession, but no turnaround in growth yet either
The majority of the G10 economies have increasingly deviated from their respective pre-corona trends as a result of the rapid interest rate hikes in recent quarters. With the US being a clear exception, the growth gap between these economies and the US is widening accordingly. However, it should also be noted that Australia is still holding up quite well among the G10.
The Bloomberg consensus does not expect a further slowdown, but neither does it expect a turnaround. Instead, the analysts are expecting another growth of 0.2% quarter-on-quarter, which is below the pre-corona trend.
Therefore, we are likely to see a gradual trend reversal in Australia as well. The fact that it will be quite late and not nearly as pronounced as in other G10 countries is one of the reasons for our forecast that the RBA will cut rates quite late and thus support the Aussie until then. Only when there are stronger signs of a slowdown in the real economy, i.e. when they indicate a recession, is the RBA likely to react earlier.
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