Country Economic Forecasts - Australia
The economy beat expectations in Q2, expanding by 0.9% q/q against our forecast a month ago of 0.6%. Private consumption and government current expenditure surprised on the upside, while business investment was generally disappointing. Strong imports limited the gains from net trade, and a significant proportion of growth (0.2% pts) was explained by statistical discrepancy. The better-than-expected performance of the economy in Q2, coupled with upward data revisions to Q1 (to 1.1% q/q growth in GDP), means we now expect the economy to grow 3.3% this year. But the headwinds in consumer spending and residential investment remain, and we expect the pace to slow to 2.6% in 2019.