Sydney Harbour and the skyline of the central enterprise district (CBD) in Sydney, Australia, on Tuesday, April 29, 2025.
Bloomberg | Bloomberg | Getty Photographs
Australia’s economic system grew lower than anticipated within the first quarter this yr, as progress stalled amid the simmering world commerce tensions.
The nation’s economic system grew 1.3% year-on-year within the first quarter, decrease than the estimated 1.5% progress amongst economists polled by Reuters. That was unchanged from the 1.3% year-on-year growth within the prior quarter.
The GDP determine comes because the Reserve Financial institution of Australia slashed rates to its lowest level in two years at its final assembly in Might as inflation figures issues receded, providing some room for the RBA to ease financial coverage.
The central financial institution mentioned in its statement after the meeting that it expects home GDP progress to choose up in 2025, pushed by a restoration in consumption and continued energy in public demand.
“Nevertheless, the pick-up is predicted to be extra gradual than beforehand forecast as a consequence of weaker world demand, world and home uncertainty and weaker momentum in consumption,” it added.
Inflation within the nation has eased to a four-year low of two.4% within the first quarter of 2025, throughout the RBA’s goal vary of two% to three%.
The RBA mentioned in its May meeting that its baseline assumptions for the nation’s economic system going ahead would mirror “considerably weaker” demand for Australian exports.
It mentioned that “some weight was positioned on the likelihood that heightened coverage uncertainty would possibly dampen home funding and family spending; and near-term momentum in consumption was a bit weaker.”
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