Australia: Growth stumbles, consumer spending soft – Westpac

Sandeep Kanihama FXStreet Contributor

Analysts at Westpac, point out that the Australian output growth slowed to 0.3% in the September quarter, well below expectations (market median and Westpac 0.6%).

Key Quotes

“Annual real GDP growth has slipped to 2.8%; the June quarter annual growth figure was revised lower to 3.1% from 3.4% previously.”

“Consumer spending was the big surprise in the quarter, up only 0.3% compared to an already weak expected 0.5%. Services, for which there are limited partial indicators, contracted in the quarter, while vehicle operations (spending on fuel) also contracted.”

“With the low savings rate acting as a “floor” to spending stronger income growth will be required to support the Reserve Bank’s forecast of 3.0% consumption growth in 2019 and 2020. Westpac’s forecast is around 2.5%.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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