Australia: Q2 GDP was a solid result - ANZ

Research Team at ANZ, suggests that the 0.5% q/q gain in Australia’s Q2 GDP was a solid result following the 1.0% gain in Q1.

Key Quotes

“It suggests the transition towards non-mining growth drivers continues. Housing and public spending were key drivers of growth in Q2. However, the recent strength in the exchange rate has slowed services export growth − which will concern the RBA, which has long been concerned that an appreciating exchange rate could complicate the recovery.

In addition, the unexpected slowdown in consumer spending growth was also disappointing. Wages growth looks okay, but unit labour costs continue to fall, suggesting to us that the domestic inflationary pulse remains very weak. This weakness will likely keep the RBA’s easing bias intact despite solid economic growth.”