Australian GDP grew 0.2% in September quarter, misses expectations

The news: Australian gross domestic product grew 0.2% in the September quarter, slowing from 0.4% in the previous quarter. The economy grew 2.1% in the leading 12 months.

The numbers: The 0.2% figure undershot expectations of 0.5%, and although it was the eighth straight quarter of GDP increases, growth continues to slow in 2023. The terms of trade dropped 2.6% as export prices fell (-1.4%) and import prices rose (+1.2%) on the back of a depreciating Aussie dollar and elevated commodity inventories abroad. The household saving to income ratio fell from 2.8% to 1.1% over the same period.

The context: Australia's economic growth was mostly driven by government spending and capital expenditure, the ABS said. Household spending was steady over the period, but over the year has fallen to its lowest level (0.4%) since the COVID-impacted March 2021 quarter. Economic growth continues to be sluggish globally as central banks lift interest rates to get their balance sheets under control after rapid expansion during the COVID-19 pandemic.