Australian GDP Preview: Forecasts from four major banks, a rocky start to the year

The Australian National Accounts are set to be released on Wednesday, June 1 at 01:30 GMT and will provide an estimate of economic activity for the March quarter. Here you can find the expectations as forecast by the economists and researchers of four major banks regarding the upcoming AU growth data. 

The Australian economy is seen expanding by 0.7% in the three months to March, on a quarterly basis, after rebounding by 3.4% in the final quarter of 2021. Meanwhile, the country’s GDP rate is seen dropping to 3.0% YoY in the reported period vs. a 4.2% sharp expansion witnessed in the previous quarter.

ANZ

“For Q1 GDP growth, the key partial indicators released on Tuesday have caused us to lift our expectation for +0.8% QoQ from our preliminary +0.6% forecast. Annual GDP growth is forecast to decline to 3.1% from 4.2% in Q4. This is a pretty solid result given the challenges of Omicron, as well as flooding and heavy rain through much of the quarter.”

Westpac

“For Q1, we anticipate anaemic growth of 0.2% with annual growth slowing to 2.5% from 4.2%. The Labour Force survey printed hours worked down 1.2%, pointing to downside risks.”

TDS

“Growth momentum probably slowed in Q1 (1.2%) as economic activity was interrupted by the Omicron wave and floods in Queensland and NSW. However, we think these shocks are temporary as domestic demand should be relatively resilient as reflected in the strong Q1 retail sales outturn. We expect the RBA to make a bolder policy move in June as the economy is on a strong footing.”

NAB

“We expect a soft 0.1% QoQ (2.4% YoY) GDP print for Q1 2022, with imports weighing on growth despite ongoing strength in consumption. Household consumption is expected to rise – though at a more modest rate than the strong Q4 outturn – with services demand picking up despite impacts from Omicron and flooding. However, both dwelling and business investments are likely to be flat with capacity constraints weighing. More importantly, we expect a significant detraction from GDP from net exports after a surge in imports in the quarter, although sharp price movements leave some uncertainty around volumes. A larger-than-expected impact could temporarily push GDP into negative territory, despite the sound domestic fundamentals. The soft quarterly GDP result is unlikely to alter the RBA’s plans to normalise monetary policy, with 25bp interest rate increases expected in June, July, August and November to take the cash rate to around 1.35% by year-end.”