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.