GDP Soars In Q4
Real GDP was seen having grown at 1.1% quarter on quarter in Q4 2016 after falling 0.5% in Q3. Year over year GDP growth rose to 2.4% from a revised 1.9% in Q3. The strong pickup in growth is linked to better domestic demand, which rose 1.2% quarter on quarter. Public sector spending improved and contributed 0.4% to the headline reading, up from -0.4% in the prior quarter.
Strong Aussie Data To Encourage RBA
Australia_aussie
GDP Soars In Q4
Real GDP was seen having grown at 1.1% quarter on quarter in Q4 2016 after falling 0.5% in Q3. Year over year GDP growth rose to 2.4% from a revised 1.9% in Q3. The strong pickup in growth is linked to better domestic demand, which rose 1.2% quarter on quarter. Public sector spending improved and contributed 0.4% to the headline reading, up from -0.4% in the prior quarter.
Private sector spending also increased to 0.7%. Part of the public sector spending was linked to defense spending and both central and state spending improved as the drag from the election-linked hiatus in 2016 was removed. Private consumption growth also improved to 0.5% quarter on quarter in Q4, fuelled by stronger full-time jobs growth. However, weakness in wage growth is likely to remain a challenge to consumption in 2017.
Investment grows at its strongest pace since 2012
Notably, business investment turned positive for the first time in nine quarters, growing at 0.9%. Residential investment saw a slight turnaround, growing 1.2% quarter on quarter. While residential investment poses some uncertainty, it should still provide support for activity given the divergent trends. The recent uptick in investor loans for housing indicates a pickup in housing demand though it is unclear whether this can be sustained.
Nominal GDP Outgrows Real GDP
Net exports contributed 0.2% to quarter on quarter growth in Q4 led by a boost in exports. Earlier in Q4, the positive terms of trade surprise aided an improvement in corporate profitability. Mining exports are likely to continue to fuel export growth, even as mining returns to pre-boom levels.
Read more: https://www.orbex.com/blog/2017/03/strong-aussie-data-to-encourage-rba/