All of the “known” Australian Q1 GDP inputs are now in following the release of net export contribution, current account and government expenditure figures on Tuesday.
By-and-large most have come in slightly beating expectations, forcing many economic analysts to upgrade their expectations for growth in the March quarter.
According to Bloomberg the median market forecast is for quarterly growth of 0.7% with the annual rate tipped to slow to just 2.1%.
While that may be the median market view, what do some of Australia’s best and brightest economic minds think will eventuate? Business Insider takes a look below.
ANZ – +0.9% QQ, +2.3% YY
“The main new pieces of information since our preliminary forecast are: larger-than-expected contributions to growth from inventories and net exports, stronger profits, lower wages, and flat public demand.
A 0.9% q/q gain in GDP would be a good result, and would be the strongest quarterly outcome since Q1 last year. Annual GDP growth of 2.3%, however, remains below-trend and strength in the economy continues to be concentrated in exports, particularly resources exports, and housing.
The rest of the economy remains soft, with falling business investment driven by the wind back in mining investment, and only moderate growth in consumer spending. Indeed, overall domestic demand looks set to rise just 0.1% q/q in the quarter”.
CBA – +0.6% QQ, +2.0% YY
We expect QI GDP growth to print at 0.6% for the quarter. It puts annual GDP, revisions aside, at a very modest 2.0%. The transition to non-resources growth needs more confidence and more investment. The QI GDP number will show that the growth transition is patchy.
UBS – +0.7% QQ, +2.1% YY
“While broad-based volume growth across resources, rural & manufacturing exports continues to outpace a modest rebound in consumer, capex & oil imports – adding more than expected to real GDP growth – lower commodity prices are leading to a modest widening of our CAD, albeit at 2.7% of GDP, it remains well below its 4.5% decade average.
In a familiar theme, Q1 public demand stayed weak, with capex dragging for the 5th quarter, while overall public spending continues to make no contribution to the economy’s growth rate, against a decade average of ¾%pt of per year.
Despite this, yesterday’s stronger than expected demand-led rise in inventories & today’s net exports ‘beat’ leads us to upgrade our Q1 GDP from 0.5% to 0.7% (now 2.1% y/y from 1.9% y/y), albeit we note this implies flat domestic demand in Q1, a very weak result.”
HSBC – +2.1% YY
“(The GDP data inputs) have generally surprised to the upside, including more positive inventory and trade data than expected. This provides some modest upside risk to our forecast for Q1 GDP growth of 2.1% y-o-y”.
NAB – +0.6% QQ, +2.0% YY
As updated economic forecasts roll in we will continue to update this page in the lead up to Wednesday’s GDP release.