Australia's GDP grows 0.4% on exports and investment

The news: Australia's GDP grew 0.4% in the June quarter, seasonally adjusted, recovering slightly from the March quarter slump to 0.2% growth and in line with expectations. GDP per capita fell 0.3%.

The numbers: In nominal terms, Australia's GDP grew 3.4% in FY22/23, above the 10-year pre-pandemic average of 2.6%. The terms of trade fell 7.9%, the largest fall since June 2009. The household saving ratio continued to decrease from 3.6% to 3.2%, and is at its lowest level since June 2008. Household spending remains subdued, lifting 0.1%. In terms of productivity, GDP per hour worked fell 2.0% for the quarter, and was down 3.6%% for the year. Exports of goods and services increased for fifth consecutive quarter, lifting 4.3%.

The context: Exports and investment were the primary drivers of growth this quarter, which was partly offset by changes in inventories. On Monday, outgoing RBA governor Philip Lowe noted persistent services inflation, unpredictable household consumption and China's slowing economy as major uncertainties facing Australia's future growth. GDP figures for the Eurozone and Japan will follow later this weak, after Switzerland on Monday recorded 0.0% GDP growth in the second quarter.