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Australian GDP Q4: Private demand expected to record a modest lift in Q4

Growth expected to tick higher in Q4. Q4 GDP f/c: 0.4%qtr, 1.1%yr. Domestic demand: 0.6%qtr, 2.1%yr.

Read full report 'Australian GDP Q4 preview: Private demand expected to record a modest lift in Q4' (PDF 290KB)

Domestic demand is expected to have grown 0.6%qtr in Q4, with private demand recording a modest recovery, up 0.6%qtr, but remains sluggish in annual terms (1.1%yr). Public spending will continue to make an outsized contribution (+0.8%qtr).

‘Measured’ labour productivity is expected to decline 1½% in annual terms. However, we expect the non-mining market sector, which is more important for domestic costs pressures, to record around average productivity growth. The deceleration in earnings growth will also help reduce underlying costs pressures. 

Going forward we expect private demand to gradually improve. Cost-of-living support, tax cuts, moderating inflation and lower interest rates will support consumer income and spending. That said, the pace of recovery is expected to be slow.


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