Search ForexCrunch

Analysts at National Australia Bank suggest that the Australia’s economic growth likely remained soft in Q2 2019, with GDP rising by 0.5% q/q.

Key Quotes

“While growth is slightly stronger than in the March quarter, boosted by a sharp lift in net exports, private sector growth likely contracted again, with consumption still soft, dwelling investment falling further and a marginal drag from business investment.”

“A weak outcome would likely trigger a further downgrade to the RBA’s outlook, notwithstanding support from income tax refunds, cash rate cuts, a lower exchange rate and a stabilising housing market.”

“More importantly given the RBA’s focus on the labour market, persistent weakness in private demand points to unemployment edging higher. We continue to expect the RBA will lower rates by November, but acknowledge the risk of an additional easing and/or a move to unconventional policy next year should the economy weaken further, particularly now that global risks have intensified.”