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Analysts at TD Securities note that Australia’s GDP for Q2 rose 0.5%/q, in line with the market’s 0.5%/q forecast and 1.4%/yr and not as bad as many were fearing heading into the release.

Key Quotes

“The Q1 release was revised up from 0.4% to 0.5%/q. Driving today’s outcome was the external sector with government spending being the main contributor to domestic final demand, +2.7%/q.”

“Household consumption remains subdued, +0.4%/q and was in line with our forecasts and dwelling investment continued to decline -6%/q.”

“While today’s print is below the RBA’s 0.75%/q forecast, the result is not a green light for the RBA to cut next month with GDP now having stabilised for two quarters, arguing for a ‘wait and see’ approach from the RBA.”