Financial News: Australia GDP Growth Slows In Q1

Australia GDP Growth Slows In Q1

(RTTNews) - Australia's economic growth eased in the first quarter as rising interest rates curbed consumer spending, while cyclones disrupted mining operations and exports, the Australian Bureau of Statistics said Wednesday.

Gross domestic product grew 0.3 percent on a quarterly basis, much weaker than the 0.9 percent expansion seen in the fourth quarter and economists' forecast of 0.5 percent.

A similar slower growth was last seen in the first quarter of 2025.

On a yearly basis, economic growth came in at 2.5 percent, the same rate as seen a quarter ago. The rate was weaker than forecast of 2.7 percent.

"Economic growth slowed in the March quarter, with modest household and public sector expenditure as well as cyclone disruptions to mining and export activities," ABS head of National Accounts Grace Kim said.

The expenditure-side of GDP showed that household spending climbed 0.5 percent, contributing 0.3 percentage points to GDP growth.

"Rising interest rates and significantly higher fuel costs in the March month likely created an environment for more cautious consumer behaviour. This resulted in reduced spending across a range of household expenditure categories," said Kim.

Government final consumption expenditure fell 0.2 percent, the lowest quarterly growth since September quarter 2022, data showed.

Private business investment rose 6.0 percent, driven by a 16.3 percent rise in machinery and equipment. Meanwhile, net trade detracted 0.8 percentage points from GDP growth due to the 1.1 percent fall in exports and the 2.1 percent rise in imports. At the same time, changes in inventories did not contribute to GDP growth.

Data showed that the household saving to income ratio fell to 6.2 percent from 7.0 percent in the December quarter.

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