Australia’s economy expanded by 0.6% in the fourth quarter, beating market forecasts of a 0.5% uptick. This marks a significant improvement from the September quarter’s 0.3% growth rate and represents the strongest quarterly expansion in over a year.
The Australian Bureau of Statistics noted that growth was broadly based across the economy, with both public and private expenditure contributing positively. Agricultural output was particularly strong (+7.3%), while the Transport, Postal and Warehousing sector (+3.0%) also performed well.
Key points from the Q4 GDP report:
- GDP grew 0.6%, accelerating from 0.3% in Q3
- Annual GDP rate reached 1.3%, exceeding RBA’s 1.1% forecast
- GDP per capita rose 0.1% after seven consecutive quarters of decline
- Household consumption increased 0.4% following flat performance in Q3
- Public investment rose 1.8%, showing moderate growth
- Private investment increased 0.3%, led by business investment
- The household saving ratio rose to 3.8% from 3.6% in Q3
- Terms of trade rose 1.7% after three consecutive declines
Link to Australia’s Q4 2024 GDP Report
The report came after Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser stressed that the central bank is keeping a close eye on how the escalating global trade war could impact domestic inflation. He made it clear that it’s too soon to declare victory over inflation and urged a cautious approach to future rate cuts.
Australian dollar vs. Major Currencies: 5-min
Overlay of AUD vs. Major Currencies Chart by TradingView
The stronger-than-expected GDP print, along with recent inflation readings that remain above target, suggests the RBA could keep rates steady for longer than previously expected.
Even so, the Australian dollar barely reacted to the GDP release, having already been under pressure ahead of the report. AUD/JPY and AUD/CHF were exceptions, which spiked higher for about an hour before the Aussie resumed its intraday slide.
As of writing, sellers are still in control, with the Aussie trading near session lows against most counterparts. Markets continue to factor in the bearish impact of escalating trade tensions—or at least a tariff war—between some of the world’s biggest economies.