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In view of analysts at NAB, the forthcoming GDP figures of Australian economy are forecasted to show a slightly slower quarterly rate of 0.5% q/q, but the year-ended growth is still likely to show a solid 3.2% y/y.

Key Quotes

“Consumption looks to have slowed following two better than expected prints and we expect dwelling investment to make a small subtraction from growth alongside the cooling in the housing market.”

Looking forward, we expect growth over the next two years to be driven by public infrastructure investment, business investment and further growth in net exports, with consumption to only see modest growth. The  uncertainty around our forecasts  is still centred on  consumption.  We have 0.5% q/q for Q3 though both official retail sales volumes and our NAB Cashless Retail Sales index suggest there is some downside to this.”

“National accounts measures of  wages  and  inflation  will be another marker of whether growth in household earnings and disposable income are seeing a lift from an increase in wage growth.”

Monetary policy implications: While the release for Q3 will provide an update on the overall pace of growth, as well as some insights into how different sectors are travelling, it will not be a view changer for monetary policy.”