News & Tips
Oliver Hume's June Quarter GDP Statement
The immediate impact on property markets of today’s stronger than expected GDP result is that any chance of a September rate cut have probably disappeared.
Prior to today’s release, financial markets had priced in a 70% chance of no rate cut at the September meeting. This result has solidified that the next cut is likely to be delivered on Melbourne Cup day in November, with one more coming in the first quarter of 2026.
This morning’s GDP result came in at 0.6% for the June quarter, and 1.3% for the 2024-25 financial year. This was a stronger than expected result, at the top end of the market’s forecasts and well up on the (revised) March 2025 quarterly result of 0.3%.
This result finally moved per capita economic growth back to positive territory, after falling in the March quarter.
The result was pleasingly driven by stronger than expected consumer spending, rising by 0.9%, well up on the 0.4% increase in March. Government spending also was stronger than expected, up 1.0% in the June quarter, although public investment was the largest detractor of growth.
The increase in household spending shows that the household sector is just beginning to fill the gap left from what is expected to be a longer term easing growth in public sector activity. Business growth contribution to private sector activity remains underwhelming.
Source: “ABS, IFM Investors”