Australia: Loss of momentum - Westpac

Analysts at Westpac point out that the Australian economy has lost momentum in the second half of 2018 led by housing and the consumer as the GDP rose just 0.3% in Q3 weighed down by some additional one–offs.

Key Quotes

“We continue to expect growth to slow, moderating from 3.0% in 2018 to a forecast 2.6% in 2019. Dwelling prices are falling on weaker demand and tighter lending conditions, with falls to extend into 2019 and potentially 2020. The key uncertainty is the extent of spill–over effects from this dynamic to the consumer.”

“A Federal election, due by May 2019, will add to uncertainty and may see businesses temporarily delay investment and hiring. Growth drivers going forward are government spending and exports, the latter supported by a lower dollar and strong demand from the Asian region. We continue to expect the RBA to remain on hold throughout 2019 and 2020.”