Australia GDP


Australia: Economy grows more slowly than expected in Q3

December 3, 2014

In the third quarter, GDP grew a seasonally-adjusted 0.3% over the previous quarter, which was down from the 0.5% expansion in Q2 and marked the slowest growth in six quarters. The print undershot market expectations of a 0.7% increase. On an annual basis, GDP grew 2.7%, which mirrored the expansion recorded in Q2.

Q3’s quarterly slowdown came on the back of a deterioration in domestic demand, driven by falling private consumption and fixed investment. Private consumption fell from a 0.8% increase in Q2 to a 0.5% rise in Q3 and fixed investment swung from a 0.7% expansion in Q2 to a 2.7% contraction, which marked an over ten-year low. In contrast, government consumption increased from a 0.4% rise in Q2 to a 0.8% increase.

On the external front, exports rebounded from a 1.6% decrease in Q2 to a 2.8% expansion in Q3. In contrast, imports swung from a 2.4% rise in Q2 to a 0.9% fall in Q3. As a result, the external sector’s net contribution to overall growth improved from minus 0.8 percentage points in Q2 to plus 0.8 percentage points in Q3.

FocusEconomics Consensus Forecast panelists see the economy expanding 3.0% in 2014, which is unchanged from last month’s forecast. For 2015, the panel expects economic growth to accelerate to 2.8%, which is also unchanged from the previous month’s forecast.

Author: Angela Bouzanis, Senior Economist

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Australia GDP Chart

Australia GDP Q2 2014

Note: Year-on.year changes of GDP in %.
Source: Australia Bureau of Statistics and FocusEconomics Consensus Forecast

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