Quick Bite | Australia’s Q1 GDP Growth Below Estimates

Australia’s gross domestic product grew 0.1% in the first quarter of 2024, compared to 0.2% in the December quarter. The consensus among forecasters was for a 0.2% increase.

On an annual basis, the economy expanded 1.1%, its lowest since the pandemic. The data also showed that GDP per capita fell for the fifth quarter, falling 0.4% in March and 1.3% throughout the year.

Katherine Keenan, Australian Bureau of Statistics (ABS) head of national accounts, said GDP growth was “weak” in the March quarter, with the economy experiencing “its lowest through-the-year growth since December 2020”.

The Treasurer said, “Primary cause of this very weak growth was higher interest rates, combined with moderating but persistent inflation and ongoing global uncertainty.” 

Source: Trading Economics

The Reserve Bank of Australia (RBA) is looking for evidence of slowing growth to help get inflation back to target. ANZ estimated the RBA was expecting growth of around 0.3% quarter-on-quarter. GDP partial data released yesterday showed the drag from the external sector had been larger than expected.

The RBA is due to meet today (June 18), where it remains widely expected they will keep rates on hold.