Australia: Economic activity cools down slightly on weaker domestic demand in Q3
December 4, 2013
In the third quarter, GDP grew a seasonally-adjusted 0.6% over the previous quarter. The increase was slightly below both the 0.7% expansion recorded in the second quarter (previously reported: +0.6% quarter-on-quarter) and market expectations of a 0.7% rise. On an annual basis, GDP expanded 2.3%, which was a decrease compared to the 2.5% expansion recorded in Q2.
The third quarter deceleration reflected that the improvement registered in the external sector was partially offset by a decline in the contribution from domestic demand. Domestic demand rose 0.4% over the previous quarter, which was down from the 0.7% expansion seen in the second quarter. Private consumption slowed from a 0.7% expansion in Q2 to a 0.4% increase in Q3, whereas public spending accelerated to a 1.1% rise (Q2: +0.2% qoq). Fixed investment deteriorated sharply, contracting 0.2% (Q2: +1.0% qoq). Inventories drove down the overall growth figures by 0.5 percentage points, after having added 0.3 percentage points in Q2.
Conversely, the external side of the economy improved in Q3. Exports of goods and services rose 0.3%, down from the 1.6% expansion seen in Q2. Imports declined 3.3% (Q2: +3.2% qoq) and thus drove the external sector's net contribution to overall growth to swing from minus 0.3 percentage points in the second quarter to 0.7 percentage points in the third.
FocusEconomics Consensus Forecast panelists see the economy expanding 2.5% in 2013, which is unchanged from last month's forecast. For 2014, the panel expects economic growth to accelerate to 2.8%, which is also unchanged over the last month's estimate.