Australian economic growth likely to have expanded soundly in Q1

Australia is set to release its first quarter GDP data this week. The Australian economy had rebounded in the fourth quarter of last year, growing at an annualized rate of 4.4 percent. Both business and consumer spending added to the rise with a smaller boost from net exports. According to consensus expectations, the Australian economy is expected to have continued expanding positively in the first quarter, albeit at not quite the same rate. Consensus project the Australian economy to have grown 0.5 percent in the March quarter.

The Reserve Bank of Australia’s commodity index had strengthened in the second half of 2016; however, it has turned down more recently dropping 3.4 percent between February and April. But, according to a Wells Fargo research report, the rebound in job prospects for Australia is encouraging and after back-to-back monthly drops in retail sales earlier in 2017, the better jobs figure might give a required lift to consumer spending. Business spending has been a drag on growth nine out of the last 11 quarters in Australia. But this trend might turn as business confidence rises, added Wells Fargo.