Updated March 15, 2019 06:29:14 Australia’s economy is expected to be in a “negative growth” mode for the third year in a row this year, the latest figures released by the Australian Bureau of Statistics show.
The economy contracted by 0.4 per cent in the December quarter, the ABS said, reversing a 0.1 per cent contraction in the previous quarter.
In its quarterly GDP growth report, the bureau said that “the current level of economic activity” was “below” the “target” of 7 per cent.
It is the latest in a series of quarterly GDP figures that have been released in recent months, but the latest one has also been a little disappointing for the Reserve Bank.
The Reserve Bank, which has been on a “fear” of deflation, has been warning of “negative” growth for a number of quarters now.
But, it is now forecasting “positive” growth of 7.2 per cent for the year to March 2019, after “negative economic activity in the third quarter”.
That was up from 6.6 per cent growth in the March quarter.
The ABS also said the economy contracted 0.6 percentage points in the February quarter, which was the biggest decline in the past year.
In the November quarter, economic activity was “well above” the target of 8 per cent and it was down 0.3 per cent from the previous month.
And the ABS also found the Australian dollar was weaker in the quarter than in previous quarters.
It is down almost 0.2 percentage points against the US dollar so far this year.
The Reserve Banks economic projections were released at the end of March, the same time as the government’s budget, which included a plan to cut the GST to 10 per cent, which would see it fall to about 8 per and 10 per per cent respectively.
At the same point in the year, inflation was forecast to be just under 2 per cent per year.
In a separate report released this week, the Reserve Banks forecast that the cost of living index would rise by 0,000 points to 0.94, and wages by 0% to 0 per cent by March 2019.
The economic growth was in line with the Reserve banks forecasts.
Economists had previously expected growth to fall to 0,500 in 2019.
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