Economist Lee Sue Ann at UOB Group reviews the latest GDP figures in Australia.
Key Takeaways
Australia’s GDP came in at 0.4% q/q in 2Q23, in line with expectations. This marked the seventh consecutive rise in quarterly GDP. From a year earlier, the economy expanded by 2.1% y/y, above expectations of 1.8% y/y.
The latest GDP print remains in line with our view of growth turning softer. We continue to expect growth to be well below trend at 1.6% in 2023 and 1.2% in 2024. As the economy slows, softening labour demand should see the unemployment rate rise back to 3.8% by end-2023 and around 4.5% by end2024.
Today’s GDP data comes a day after the Reserve Bank of Australia (RBA) held its cash rate target steady at 4.10% for the third consecutive time. Our view remains for the RBA to keep policy unchanged at the next meeting on 3 Oct.
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