Australia Q3 GDP Growth Below Expectations

The Australian economy expanded 0.4% qoq in Q3 2025, following an upwardly revised Q2 reading and market estimates of 0.7% while marking the 16th consecutive quarter of growth. Household consumption slowed sharply (0.5% vs 0.9% in Q2), as discretionary spending cooled after a strong Easter-related boost in the prior quarter. Meantime, government spending growth was little changed (0.8% vs 0.9%). Net trade was a drag, with exports (1.0% vs 2.3%) rising less than imports (1.5% vs 2.3%); while inventories subtracted 0.5ppts. In contrast, private investment surged (2.9% vs 0.2%), contributing 0.5ppts and marking its fastest pace since Q1 2021, driven by stronger machinery and equipment spending. Public investment also rebounded (3.0% -3.5%) on the back of renewable energy and water, telecommunications and rail transport projects. The household savings ratio increased (6.4% vs 6.0%). Annually, GDP grew 2.1%, slightly below forecasts of 2.2% and following a 2.0% rise in Q2.

The Australian economy grew 0.6% qoq in Q2 2025, accelerating from an upwardly revised 0.3% in Q1 and topping market consensus of 0.5%. It was the 15th straight quarter of rise, driven by domestic final demand (0.5 ppts). Household consumption jumped (0.9% vs 0.4% in Q1), due to higher spending on discretionary and essential goods during the Easter and ANZAC holidays. Government spending also picked up (1.0% vs 0.3%), on higher social benefits and national defense outlays. Net trade added 0.1 ppts, with exports (1.7% vs -0.7%) outpacing imports (1.4% vs 0.1%). In contrast, public investment slumped for the third quarter (-3.9% vs -2.4%), the steepest drop since Q3 2017, weighed by reduced state spending on transport and health projects, and lower defence investment. Inventories dragged 0.1 ppts, the first drop in three quarters. On a yearly basis, the GDP grew 1.8%, above forecasts of 1.6% and the fastest pace since Q3 2023. The household savings ratio fell to 4.2% from 5.2% in Q1.

The Australian economy grew by 0.2% qoq in Q1 2025, slowing sharply from a 0.6% rise in Q4 and falling short of market forecasts of 0.4%. It marked the 14th straight quarter of expansion but the weakest in three quarters. Public spending posed the biggest drag since Q3 2017, as severe weather disrupted mining, tourism, and shipping. Notably, public investment declined for the first time in three quarters (-2.0% vs 0.8% in Q4), reflecting the completion of major projects and some delays in new ones. Household spending eased (0.4% vs 0.7%), with growth focused on essentials like food, rent, and electricity. Government expenditure was flat after nine quarters of gains. Net trade also weighed on growth, as exports fell more than imports amid rising global trade risks. Inventories added 0.1 percentage point to GDP. The household savings ratio increased to 5.2% from 3.9% in Q4. On an annual basis, GDP expanded 1.3%, unchanged from the previous quarter but below expectations of 1.5%.