Investing.com-- Australia’s economy grew less than expected in the first quarter, gross domestic product data showed on Wednesday, as weak consumption and softer contribution from exports weighed on overall economic growth.
GDP grew 1.1% year-on-year in the first three months of 2024, according to data from the Australian Bureau of Statistics. The reading was slightly below expectations of 1.2%, and slowed from the 1.5% seen in the fourth quarter of 2023.
GDP grew 0.1% quarter-on-quarter, compared to expectations of 0.2%, and the prior quarter’s reading of 0.2%.
Wednesday’s reading came as Australian consumer spending weakened substantially this year, amid persistent pressure from sticky inflation and high interest rates.
But GDP still remained in positive territory, largely on increased government spending on household benefits and energy relief. This also kept household spending in positive territory, albeit slightly.
Business spending, which had earlier provided some support to the Australian economy, fell in the quarter, with total capital expenditure down 0.9%.
Data earlier this week showed that net Australian exports shaved 0.9% off the annual GDP figure, as demand in major export markets, specifically China, slowed further through the quarter.
Australia also slipped into a current account deficit in the quarter.
Wednesday’s data indicated that the Australian economy was cooling rapidly under pressure from high inflation and interest rates. But with inflation remaining high, it was still unclear just how the Reserve Bank would alter interest rates in the coming months.