Australia: Economy growing at a strong pace - NAB

Analysts at NAB explain that the release of the Australia’s Q2 national accounts confirmed that the economy has grown at a strong pace over the last year, with notable growth in government infrastructure spending, and a surprisingly resilient household sector.

Key Quotes

“Exports have also risen as expected. Growth in the business sector has been a little more mixed, with weakness in the non-mining sector evident in Q2; investment in the mining sector rose in Q2. While the economy has grown more strongly than expected over the first half, the outlook is broadly unchanged from previous months.”

“In addition, downside risks have abated somewhat, with business conditions rebounding in August (though confidence weakened). Growth is expected to continue at above trend rates (at 3.3% in 2018 before slowing in 2019 and 2020).”

“Rising commodity exports, public infrastructure investment and a recovery in non-mining business investment are expected to drive growth. Our outlook for the consumer remains weaker, given the headwinds faced by the household sector.”

“The cooling in the housing market is also likely to see some weakness in dwelling investment over the next few years. While growth has been strong, inflationary pressure has remained weak, suggesting there is some time to go for the rise in output growth (and improving labour market) to feed through to inflation pressures more broadly – though recent data prints have showed some signs of a pick-up.”

“For now we have left our outlook for rates unchanged, but the risk remains that this could well be delayed.”

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.