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Economy romps into 27th year of expansion

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December 06, 2017

Reserve Bank governor Philip Lowe expects GDP growth to average around three per cent.

Australia's annual growth rate could hit three per cent for the first time in over a year when the national accounts are released on Wednesday.

It's a pace more attuned to sustained employment growth.

The forecasts of economists centre on a 0.7 per cent increase in growth for the September quarter, just shy of the 0.8 per cent expansion in the previous three months.

The resulting three per cent annual rate, compared to 1.8 per cent as of the June quarter, is flattered by the 0.4 per cent growth contraction recorded in the September quarter 2016 dropping out of the equation.

Such strength comes despite some moderation in household spending faced with slow wages growth and rising energy costs hitting household budgets.

Exports are also set to be disappointing, making no contribution to growth.

However, a build-up in business inventories - stock on shelves and in warehouses - and a lift in government spending are expected to be key factors in the quarterly growth result.

Leaving the cash rate at a record-low 1.5 per cent on Tuesday, Reserve Bank governor Philip Lowe said he expected GDP growth to average around three per cent over the next few years.

Treasury will use the national accounts to refine its own forecasts for the mid-year budget review, which will be handed down by Treasurer Scott Morrison later this month.

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