Govt spending down 0.8% in Mar qtr

A drop in government spending will be a drag on GDP growth, but this will be more than offset by positive moves in foreign trade.

A fall in government spending of 0.8% in the March quarter will be a drag on economic growth. (AAP)

Government spending fell in the March quarter, but the drag on economic growth will be more than offset by positive trends in foreign trade.

Total government spending, including consumption and investment, fell 0.8 per cent in the quarter, after adjusting for price changes and seasonal fluctuations, according to the Australian Bureau of Statistics data released on Tuesday.

Public sector spending makes up about a quarter of gross domestic product.

So, this fall will cut about one fifth of a percentage point from GDP growth in the March quarter, to be reported in the national accounts on Wednesday.

But other ABS data released on Tuesday showed exports grew strongly in real terms, by 4.8 per cent, while imports fell by 1.4 per cent.

With production of exports adding to economic activity and less spending going to foreign-produced imports, these figures show foreign trade added 1.4 percentage points to GDP growth in the quarter.