News & Tips
Chief Economist Matthew Bell on Australia's GDP
Our Chief Economist, Matthew Bell on:
✔️ Australia's GDP for the March quarter came in at a lower-than-expected
✔️ Severe weather conditions are likely to be attributed to this
✔️ An anticipated slowdown in public sector growth with a rebound in affected sectors
✔️ The immediate impact on property markets
✔️ The weaker GDP figures significantly increase the likelihood of an RBA interest rate cut in July.
✔️ Need for a more sustainable and diversified growth path in the long term
Oliver Hume Chief Economist, Matthew Bell comments on LinkedIn:
"GDP was out this morning, coming in at 0.2% for the March quarter, and 1.3% for the year. This was well below the market’s forecast, the RBA’s implied forecast and the previous December 2024 quarterly result of 0.6% (although the annual number remained flat).
Some of the weakness can be attributed to severe weather conditions in the quarter, and the slowdown in public sector growth has been expected for some time, but if private sector demand doesn’t start picking up to fill the gap, we could be in for a period of poor economic growth.
The more immediate impact on property markets is that the chances of a July rate cut, and indeed a quicker and/or longer easing cycle, are now materially higher than they were before the release.
Prior to today’s release, financial markets had priced in nearly a 75% chance of a rate cut at the July meeting, and a further two cuts by the end of March next year. Today’s weak result will see a July cut move closer to being a sure bet."