ANZ: Australia's GDP Today Will Overstate Growth

Getty / Paula Bronstein

The Australian Bureau of Statistics will release Australia’s GDP results for the fourth quarter of 2013 at 11.30am today with the market expecting between 0.6% and 0.8% for the quarter.

That would take year-on-year growth into the high 2% range from the low 2% range in Q3, 2013.

That looks like a good result for Australia but as per the ANZ’s economics team’s preview released overnight, like the song says, it ain’t necessarily so.

While the ANZ itself is looking for a print of 0.7%, it says:

Although a 0.7% rise in GDP is a respectable result, it overstates the underlying strength in the economy. That is, while overall growth is not too far from trend, private final demand looks to have fallen 0.5% q/q in the quarter with the windback in mining investment providing a sizeable drag on growth.

The point the ANZ is making is that we are already in March and this GDP data is somewhat historic, with the recent Capex data showing a big step down in investments in the coming 18 months.

We’ll know more at 11.30am.

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.