The economy probably contracted for the first time in five years in the September quarter, but it's likely a blip rather than the start of a recession, economists say.
Gross domestic product (GDP) is forecast to have fallen 0.2 per cent in the September quarter, taking it to 2.1 per cent for the 12 months to December, according to an AAP survey of 14 economists.
Even the Reserve Bank said on Tuesday that "some slowing in the year-ended growth rate is likely".
ANZ head of Australian economics Felicity Emmett said the weakness in GDP looks to be quite broadly based.
"Some slowdown in GDP growth would be consistent with the apparent loss of momentum in the labour market, but we are surprised by the extent of the weakness evident in the numbers," she said.
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"We do, however, expect the weakness to be relatively short-lived."
UBS economists agreed, saying the Reserve Bank shouldn't be too concerned about the dip in growth.
"Looking forward, the narrowing of the current account deficit to its best in two years on strongly rising terms of trade and likely fourth quarter rebound in public capex and resource export volumes should provide some comfort for policy makers that better data lies ahead," they said.
CommSec chief economist Craig James said the last quarter of negative growth was five years ago, in March quarter of 2011.
But he believes a negative GDP print could have a silver lining.
"If the economy did go backwards it will serve as a wake-up call for Australia's politicians," Mr James said.
"The message from consumers and businesses is that the major parties need to flesh-out reforms, especially on taxation, that will give Australians confidence to spend, invest and employ."
