Australia's Q2 GDP Beats Forecasts at 2.1% as 3.5% Inflation Keeps RBA Tightening in Play
Updated
Updated · CNBC · Sep 2
Australia's Q2 GDP Beats Forecasts at 2.1% as 3.5% Inflation Keeps RBA Tightening in Play
3 articles · Updated · CNBC · Sep 2
Summary
Australia's economy grew 2.1% from a year earlier in Q2, topping the 1.8% Reuters poll forecast, while quarterly GDP rose 0.4% against expectations for 0.3%.
Private demand and mining exports drove the upside surprise, even as households stayed cautious and spending increased just 0.4%.
Elevated fuel prices linked to the Middle East conflict curbed fuel use and prompted households to cut both domestic and international travel.
The stronger GDP reading gives the Reserve Bank of Australia more room to tighten policy after some board members already weighed additional hikes.
July inflation came in at 3.5%, above the 3.3% forecast, and the RBA expects price growth to return to the midpoint of its 2%-3% target only by late 2027.