Australia GDP grew 0.4% qoq in Q3, down from Q2’s 0.6% qoq, missed expectation of 0.5% qoq. The economy grew 1.7% through the year. The set of data, in particular weak consumption, argued that the impacts of rate cuts and fiscal stimulus were rather limited. They also raised questions on RBA’s view that the economy is reaching a “gentle turning point”.
Gross domestic product, Chain volume measures: Seasonally adjusted
Looking at some details, household consumption remained subdued and grew 0.1% in the quarter only. It’s also mainly driven by modest growth in expenditure on essentials goods and services. Household saving ratio jumped sharply to 4.8% as gross disposable income rose 2.5% on decline in income tax payable. Domestic final demand contributed 0.2% points to GDP. Government final consumption expenditure rose 0.9%. Mining business investment dropped -7.8% while non-mining business investment rose 1.2%.
Chief Economist for the ABS, Bruce Hockman, said: “The economy has continued to grow, however the rate of growth remains well below the long run average. The reduction to tax payable did not translate to a rise in discretionary spending, which led to a visible impact to household saving”.
