Australia’s economy is expected to have grown robustly in the first quarter. On a quarterly basis, the economy is likely to have expanded 0.8% and 2.9% on an annual basis, said ANZ in a research report. Net export is likely to remain the main driver of the economic growth. On the contrary, private consumption is expected to have decelerated in Q1 following an expansion in Q4 2015. Investment is likely to have weighed on the first quarter growth, said Societe Generale in a research report.
In all, net export is likely to have mainly driven the Q1 GDP growth. However, domestic demand is expected to have driven around half of the year-on-year growth rate, added Societe Generale.
If the projections are correct, there are unlikely to be any implications for monetary policy, noted ANZ. Economic growth of 0.8% q/q appears to be more solid that the recent forecast profile of the Reserve Bank of Australia. However, the central bank’s focus continues to be set on inflation.
“The average wages number in the GDP report looks likely to show modest growth in wages, up from the sharp 0.6% fall in Q4, but soft nonetheless”, added ANZ.
