UPDATE: Australia’s economic outlook is poised for significant revelation this week as the Australian Bureau of Statistics (ABS) prepares to release critical national accounts data. With GDP growth expected to reflect a gradual recovery, the stakes are high for businesses and policymakers alike.
This week’s data deluge will further clarify the nation’s economic health, with projections indicating a GDP increase of 0.6 percent for the three months leading to June, potentially lifting the annual growth rate from 1.3 percent to 1.7 percent. Experts warn, however, that upcoming figures on public spending and business inventories could disrupt these forecasts.
Diana Mousina, deputy chief economist at AMP, cautioned, “The private sector is still incredibly weak,” highlighting concerns that GDP numbers might fall below expectations. The Reserve Bank of Australia (RBA) had previously estimated an annual growth of 1.6 percent, a prediction that some economists, including those from NAB, believe is too optimistic, forecasting just 1.4 percent.
As Australia grapples with declining productivity—currently at negative year-on-year growth—any hint of economic weakness could have immediate implications for interest rates. Mousina remarked, “Despite the recent jump in monthly inflation, borrowers shouldn’t expect another rate cut soon.”
In a week packed with pivotal announcements, RBA Governor Michele Bullock is set to address the public in Perth on August 30, 2023, while RBA Deputy Governor Andrew Hauser is scheduled for an interview with Reuters the same day. Investors are watching closely, as these discussions will provide further insights into the RBA’s economic stance.
The ABS will also unveil its household spending indicator on Thursday, replacing its previous retail trade series. Housing data will take center stage, with updates from Cotality on its Home Value Index for August and ABS figures on building approvals for July.
In related news, Wall Street is grappling with the implications of inflation data, with the S&P 500 recently declining by 0.64 percent to close at 6,460.26 points. The Australian share futures, however, saw a slight uptick, climbing 25 points or 0.28 percent to reach 7,922.
As the economic landscape evolves, the focus remains on the data expected to emerge this week. Stakeholders are urged to stay tuned for these crucial updates that could reshape Australia’s economic trajectory.
