Australia’s Q2 GDP report will be released later on this morning, a snapshot of how the economy performed over the June quarter.
After a stellar gain in Q1, it initially looked like Q2’s growth figure was going to be a major disappointment. However, after a flurry of GDP inputs in recent days, it now looks like it’ll be another stellar number.
Should that be the case, it will mark 100 consecutive quarters without Australia experiencing a technical recession — defined as two consecutive quarters of negative growth — leaving it second only to the Netherlands in terms of an uninterrupted economic expansion for a developed economy.
Here’s the state of play.
- In the March quarter, real GDP grew by an enormous 1.1% in seasonally adjusted chain volume terms, leaving the increase on a year earlier at an above-trend rate of 3.1%.
- Adjusted for price movements, nominal GDP rose by a smaller 0.5% over the same period, reflective of weak wage growth and falling commodity export prices. Year-on-year it grew by 2.1%, again less than GDP measured in volume terms.
- Today, having received the majority of GDP inputs, economists expect real GDP growth to have decelerated in the June quarter, albeit still at a decent clip.
- According to a poll from Bloomberg, the median economist forecast is for a quarterly increase of 0.6% — well above initial estimates that centred around a gain of 0.4% — leaving the year-on-year expansion at 3.3%.
- If the median forecast is on the money, it will mark the fastest year-on-year growth rate since Q2 2012, some four years ago.
- Dwelling investment, public expenditure and inventories will likely make positive contributions to economic growth, helping to offset weakness in business investment and net exports.
- While it is likely to make a reasonable contribution to real GDP, household consumption expenditure — the largest component within GDP — will not be known until the GDP report is released.
- Retail sales volumes — accounting for around a third of consumption (the remainder services) — grew by 0.4% during June quarter.
- Economists at CBA expect the same figure for household consumption, suggesting it should be modest, but respectable.
- In nominal terms, GDP is likely to print north of 1% for the quarter, assisted by higher commodity export prices.
The report will be released by the ABS at 11.30am AEST.
Business Insider will have all the details once the data drops.
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