Australia is likely to avoid a technical recession — defined as two consecutive quarters of negative economic growth — when the ABS releases its December quarter GDP report next Wednesday, March 1.
The median estimate is centred around an increase in real GDP of 0.7% for the quarter, leaving the year-on-year growth rate at 1.9%.
The Reserve Bank of Australia is currently forecasting year-on-year growth of 2.0%.
Individual forecasts range between growth of 0.4% to as much as 1% for the quarter, the former coming from Westpac and Bank of America-Merrill Lynch, with the latter from economists at Societe Generale.
While everyone is predicting modest growth at this point, that view could shift significantly in either direction early next week with net exports, private inventories, balance of payments, company profits and government spending figures — all GDP inputs — scheduled for release on Monday and Tuesday.
Not to say that the same outcome will arrive, but these releases in the previous quarter saw expectations for growth shift substantially lower ahead of the GDP release, eventually culminating in the negative growth figure reported.
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