Australia’s economy surprisingly slows as rate hikes damp spending

AUSTRALIA’S economy surprisingly slowed sharply in the three months through September as consumers hunkered down in the face of rising borrowing costs while exports detracted from growth. 

Gross domestic product advanced 0.2 per cent from the prior quarter, slower than economists’ estimate of a 0.5 per cent gain, Australian Bureau of Statistics data showed on Wednesday. From a year earlier, the economy grew 2.1 per cent from a downwardly revised 2 per cent. 

“Government spending and capital investment were the main drivers of GDP growth this quarter,” Katherine Keenan, ABS head of National Accounts, said in a statement. “Household spending was flat in the September quarter.”

The Australian dollar and government bond yields were little changed.

With annual growth slowing from a decade average of 2.4 per cent, the data are likely to ease concerns about demand-driven inflation pressures. That suggests the RBA can remain in a holding pattern for a little while in order to assess the economy. BLOOMBERG