Australia Q1 GDP Growth Weakest in 1-1/2 Years

The Australian economy expanded 0.2% qoq in Q1 of 2023, below market forecasts of a 0.3% increase, and after an upwardly revised 0.6% rise in Q4.

This was the sixth consecutive period of economic growth but the softest pace in the sequence, as household consumption rose the least in six quarters (0.2%% vs 0.3% in Q4) due to persistent cost pressures and elevated interest rates.

The household savings ratio fell to 3.7%, the lowest since Q2 of 2008, from the prior 4.5%.

Also, government spending growth slowed sharply (0.1% vs 0.6%), while net trade contributed negatively as exports (1.1%) increased less than imports (3.2%).

Meanwhile, private investment rose (1.4% vs -0.9%), supported by machinery and equipment, non-dwelling & dwelling, and intellectual property products.

Public investment gained (3.0% vs -1.2%), due to rises in state and local govt, state and local corporations, and non-defense.

Through the year, the economy grew by 2.3%, slowing from a 2.7% gain in Q4.