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Economy to show steady improvement

Economic growth is expected to have sped up to 0.9 per cent in the June quarter.

Economic growth is expected to have rebounded from its slowest quarter in almost eight years, though annual growth will likely remain below the Reserve Bank's target range.

Economists tweaked their forecasts for Wednesday's June quarter gross domestic product figures after data released on Tuesday showed an unexpected boost in exports during the three months to June.

Australia's export volumes rose 2.7 per cent, outpacing growth in imports, which will mean a stronger than expected contribution to economic growth from international trade.

After previously forecasting GDP growth of 0.7 per cent, economists are now predicting a growth rate of around 0.9 per cent, and some forecasts are as high as 1.2 per cent.

The economy expanded by 0.3 per cent in the March quarter, as bad weather restricted commodity shipments and housing construction, after a surprise 1.1 per cent jump in the previous three months.

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June quarter growth of 0.9 per cent would take annual growth to 1.9 per cent, below the RBA's target band of 2-3 per cent.

NAB economists said household consumption and wages numbers will be of particular interest, as they will indicate whether strong retail sales volumes reflect overall strength in consumption, or came at the expense of services spending.


2 min read

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Source: AAP



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