Australian Q4 GDP preview

By Andrew Hanlan Senior Economist, Westpac

Mixed conditions to end 2022, ahead of sharp slowdown in 2023. Q4 GDP forecast: 0.7%qtr, 2.7%yr.

Read full report 'Australian Q4 GDP preview'  (PDF 79KB)

 

The Australian National Accounts, to be released on Wednesday March 1, will provide an estimate of economic activity over the final three months of 2022, as we head into 2023.

 

As we’ve highlighted previously, the Australian economy was in transition over the second half of 2022. 

 

The boost from earlier substantial policy stimulus was still evident, but waning, and household service sectors benefited from the ongoing normalisation of life after the many and prolonged covid restrictions. However, some adverse impacts of sharply higher inflation and rapid interest rate rises became apparent (falling retail sales, declining home renovations and lower housing turnover). The full effects of these negative dynamics will be evident in 2023, triggering a sharp economic slowdown.

 

We expect output growth of 0.7% for the quarter (following a 0.6% outcome for Q3). Annual growth moderates to 2.7%, down from 5.9% - a figure flattered by weak base effects associated with the delta lockdowns in Q3 2021.

 

The arithmetic of our 0.7% forecast for Q4 is: +0.3% for domestic demand and a net +0.4ppts impact from net exports (+1.4ppts) and inventories (-1.0ppts).

 

If domestic demand growth prints a 0.3%, that will be the softest outcome since September 2021 (the delta lockdowns) and the softest outcome outside of a lockdown period since March 2019.

 

We anticipate that: overall consumer spending grew by a solid 0.8% (centred on services); home building was broadly flat (impacted by an unfolding pull-back in renovation work); business investment slipped a little, down a forecast -0.5%; and public demand is consolidating at a high level, edging up by 0.3%.

 

Click on PDF link above for full report

Related articles

Australian GDP Q1: Shaky handover?

May 30 2025 6 mins

NZ GDP review, December quarter 2024

March 20 2025 2 mins

First impressions: NZ GDP, December quarter 2024

March 20 2025 3 mins

Browse topics

Linkedin

© 2025 Westpac Institutional Bank is a division of Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714

Terms and conditions

1. Westpac IQ is a service provided by Westpac Banking Corporation here referred to as “Westpac”.

2. Your access to this service is subject to these terms and conditions, notices, disclaimers and any other statements contained on this website.

3. You agree that any view or opinions expressed in the articles or podcasts contained in Westpac IQ are the author's own and may not necessarily reflect the view or opinions of Westpac.

4. You agree that any commentary contained in Westpac IQ is not intended as personal advice and should not be relied upon as such by you. 

5. Westpac IQ may contain information in relation to certain financial products. Westpac makes no recommendation to buy, hold or sell these financial products, nor does it make any representations or warranties regarding the financial products. You should make your own decision in relation to the financial products based on your own enquiries, the information contained in the relevant disclosure documents, and the suitability of the relevant financial products to your own investment objectives, financial situation and particular needs.