GDP tipped to grow 0.7% in March qtr

Economists expect the economy to have grown by 0.7 per cent in the March quarter, for an annual rate of 2.7 per cent.

The economy is continuing to grow on the back of stronger exports which are offsetting weak growth in domestic demand.

Gross domestic product (GDP) is forecast to have risen to 0.7 per cent in the March quarter, taking it to 2.7 per cent for the 12 months to March, according to an AAP survey of 13 economists.

That's below the nation's long-term trend rate of 3.2 per cent.

However, it would be better than the December quarter's 0.6 per cent rise.

"This would be a solid headline result, although growth in the quarter looks to have been driven largely by net exports, while domestic demand remains soft," ANZ head of Australian economics Felicity Emmett said in a statement.

A key growth driver was likely to be an uptick in commodity exports, especially iron ore and non-monetary gold.

Services exports including tourism and education were also quite strong in the quarter.

Household consumption was forecast to have boosted GDP growth on the back of a further decline in the household savings ratio and the strength of services consumption.

JP Morgan chief economist Sally Auld pointed out that residential investment also remained upbeat in the March quarter.

"The data to hand suggest the central themes in Australia's GDP growth mix from 2015 have carried over to 2016," she said in a statement.

"Household consumption and net trade started 2016 on a firm footing, and are expected to deliver the lion's share of growth in the first quarter."

National Australia Bank economists said the pattern of growth was consistent with the Reserve Bank's views on non-mining activity and was unlikely to significantly influence the central bank's bias on interest rates.

"We do acknowledge a further rate cut remains a possibility if inflation continues to surprise to the low side," they said.

"With activity indicators positive, NAB does not expect any consideration of further easing before the next CPI release (released July 27).

First quarter forecasts

AAP: 0.9 per cent

AMP Capital: 0.7 per cent

ANZ: 0.8 per cent

Commonwealth Bank: 0.6 per cent

HSBC: 0.5 per cent

JP Morgan: 0.7 per cent

Macquarie Group: 0.6 per cent

NAB: 0.8 per cent

RBC Capital: 0.6 per cent

St George: 0.7 per cent

TD Securities: 0.8 per cent

UBS: 0.7 per cent

Westpac: 0.6 per cent

Median forecast: 0.7 per cent

Source: AAP survey


Share

3 min read

Published

Source: AAP



Share this with family and friends


Get SBS News daily and direct to your Inbox

Sign up now for the latest news from Australia and around the world direct to your inbox.

By subscribing, you agree to SBS’s terms of service and privacy policy including receiving email updates from SBS.

Download our apps
SBS News
SBS Audio
SBS On Demand

Listen to our podcasts
An overview of the day's top stories from SBS News
Interviews and feature reports from SBS News
Your daily ten minute finance and business news wrap with SBS Finance Editor Ricardo Gonçalves.
A daily five minute news wrap for English learners and people with disability
Get the latest with our News podcasts on your favourite podcast apps.

Watch on SBS
SBS World News

SBS World News

Take a global view with Australia's most comprehensive world news service
Watch the latest news videos from Australia and across the world