Australia: Q2 GDP forecasts lifted to 0.7% – TD Securities
Analysts at TD Securities has lifted its Q2 GDP f/c to 0.7%/q, 1.6%/y following strong contributions from net exports and Govt spending but risks are for a number to come in below TD's f/c if private consumption, which is 25% of GDP that still remains unknown, is weak.
Key Quotes
“Net exports are estimated to have added 0.6% pts to Q2 GDP (mkt and TD at 0.3% pts contribution) following the current account smashing expectations with a surplus of A$5.9b – mkt at A$1.5b, TD A$1.7b.”
“The first current account surplus since 1975 was due to the trade balance printing a record high A$20b surplus, while the net income deficit narrowed by A$1.9b to –A$14b, the lowest in 3yrs.”
“The terms of trade rose for the 4th straight qtr, +1.5%/q, +8.9%/y on the back of strong export prices +2.5%/q. Govt spending is expected to add 0.4% pts to GDP thanks to Consumption rising 2.7%/q, the largest quarterly increase since Q1 2005. These two data releases more than offset the drop from inventories released yesterday of ~-0.5% pts. As such we expect the market is likely to lift GDP estimates ahead of tomorrow’s release.”
“Retail Sales fell 0.1%/m in July, which a surprise was considering this release covered back to back RBA rate cuts and at least the initial tax offset payments. Ex food, retail sales were -0.3%/m, a disappointing outcome.”
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.
