The Australian economy grew by 0.3% in the September quarter 2024 and 0.8% year-over-year, showing continued growth but at a slower pace than the expected 0.5% expansion, according to data released by the Australian Bureau of Statistics (ABS).
Key points from the Q3 GDP report:
- GDP per capita fell 0.3%, marking the seventh consecutive quarterly decline
- Public investment rose 6.3%, reaching record levels
- Household spending was flat (0.0%) following a 0.3% decline in Q2
- The household saving ratio increased to 3.2%
- Terms of trade fell 2.5%, declining for the third straight quarter
Link to Australia’s Q3 2024 GDP Report
Details revealed that public sector expenditure was the main growth driver this quarter, with both government consumption and investment contributing positively. However, household spending remained subdued, with energy bill relief rebates shifting expenditure from households to government accounts.
Australian dollar vs. Major Currencies: 5-min
Overlay of AUD vs. Major Currencies Chart by TradingView
The Australian dollar fell sharply across the board following the GDP release, posting its largest losses against the Canadian dollar (-0.70%) and U.S. dollar (-0.69%), while declining less severely against the New Zealand dollar (-0.32%).
The bearish reaction likely reflected the continued weakness in GDP per capita and household spending, suggesting the RBA may need to consider a more dovish stance in 2025. The modest 0.3% quarterly growth, well below the economy’s potential, added to concerns about Australia’s economic momentum heading into the new year.
At the time of writing, sellers remain in control of AUD price action, with the currency trading near session lows against most counterparts as markets digest the implications of another quarter of below-trend growth.