Daily Management Review

Australia's GDP slows down in Q3


Australia's economic growth slowed in the third quarter, despite the central bank’s rate cut.

GDP in July-September grew by 0.4% compared with the II quarter, when, according to revised data, the growth was 0.6%, says the Bureau of Statistics of the country.

Economists surveyed by Bloomberg expected GDP to increase by 0.5% in the third quarter.

In annual terms, the growth was 1.7%, which coincided with the forecast. In April-June, GDP growth of 1.6% was recorded compared to the same period last year.

The Australian economy has been avoiding a recession since the early 1990s, but economic growth has slowed since the middle of last year, as households faced record debt and weak income growth, which limits spending.

Consumer spending, which accounts for almost 60% of Australia's GDP, grew by only 0.1% compared with the previous quarter. This is the worst result since the global financial crisis.

The household savings rate jumped to 4.8% from a revised 2.7% in the second quarter.

One of the main drivers of growth was government spending and exports.

Government spending grew by 0.9% on a quarterly basis and by 6% in annual terms.

The Central Bank of Australia on Tuesday left its key interest rate at a record low after three cuts this year.

The slowdown in economic growth strengthens expectations regarding a further reduction in interest rates by the Reserve Bank of Australia in early 2020.

source: bloomberg.com