Aussie GDP, AUD Analysis

Aussie growth stalls in Q1, growing just 0.1% during the quarter
Household spending dominated by essentials as discretionary purchases flatline
AUD/USD appears unperturbed but the currency has sold-off notably in recent times
The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library

Aussie Growth Stalls in Q1, Growing Just 0.1% over the Quarter

Aussie growth has been under pressure, with annualized real GDP declining, or remaining flat, every quarter since the start of 2023. The annualized figure missed estimates of 1.2% to come in at 1.1%, while the quarter on quarter figure rose a meagre 0.1%.

Household spending, which accounts for roughly 50% of Australian GDP was fractionally stronger at 1.3% but the majority of spending was channeled to essentials like electricity and healthcare as discretionary spending flattened out.

Customize and filter live economic data via our economic calendar

The economy is taking strain with interest rates at 4.35% but Michele Bullock expressed that policy needs to remain restrictive to bring demand and supply into greater balance. Markets do not anticipate another rate hike but equally, they do not anticipate a rate cut any time soon either. There is a little under 50% chance of a 25 basis point (bps) cut in December but a full cut is only priced in for July next year – suggesting in the absence of a drastic drop in inflation or seriously adverse economic conditions, rates will remain where the are for an extended period.

Market-Implied Basis Point Adjustments Going Forward