Australia Q3 GDP Growth Below Estimates

The Australian economy expanded 0.6% qoq in Q3 of 2022, compared with market forecasts of 0.7% and after a 0.9% rise in Q2.

This was the fourth straight quarter of growth in the economy but the softest rise in the sequence, as household consumption grew the least in a year amid intense cost pressures and rising interest rates (1.1% vs 2.1% in Q2).

Wednesday’s release also showed household savings ratio fell to 6.9% in Q3 from 8.3% in Q2, despite a large rise in compensation of employees.

Meantime, government spending rose slightly after falling previously (0.1% vs -0.6%); while private investment bounced back (0.8% vs -0.9%), buoyed by activities in both dwelling (1%) and non-dwelling (8.6%) and despite drops in ownership transfer costs (-11.2%) and machinery and equipment (-2.7%).

Net external demand was a drag on the GDP as commodity prices fell, with imports growing 3.9%, while exports rose at a slower 2.7%.

On a yearly basis, the economy advanced 5.9%, less than consensus of 6.2%.