Australia's first-quarter gross domestic product (GDP) is expected to grow by 0.2% quarter on quarter (q/q), weighed down by a 0.4% decline in public demand and a small drag from net exports, ANZ Research reported Tuesday.
Household consumption is expected to edge 0.2% higher, while dwelling investment and business investment are set to increase by 1.6% and around 1%, respectively, per the report.
Growth in information technology, finance, and health sectors is offset by weakness in hospitality and mining. Employee compensation is forecast to rise 1.4%, supporting nominal income growth, the report added.
Wages rose 1.4% in the first quarter, showing labor market strength, while private inventories added nearly 0.2 percentage points to GDP but were offset by a drop in public inventories. Company profits fell 0.5%.
The current account deficit narrowed to AU$14.7 billion for the quarter, with terms of trade up 0.1%. Real goods exports and imports both fell 0.3%, services exports dropped 3%, and services imports declined 0.8%.
Public demand slipped 0.4% during the quarter due to a 2% decline in government investment and flat consumption, although ANZ expects this softness to be temporary.
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