Australia’s GDP recorded a 0.2% increase in the first quarter of 2025, lower than the expectations of the consensus of an increase of 0.4%, and a growth rate of 0.6% in the fourth quarter of 2024. It was also weaker than the 0.4% forecast of the BOE in its May monetary policy statement. Compared to the previous year, the economy expanded 1.3% year -on -year, without changes compared to the fourth quarter of 2024, but also below the 1.5% expectations, reports the economist of UOB Group, Lee Sue Ann.
RBA will further reduce its policy rate
“GDP grew by 0.2% in the first quarter of 2025, lower than the expectations of the consensus of an increase of 0.4%, and a growth rate of 0.6% in the fourth quarter of 2024. It was also weaker than the 0.4% forecast of the Bank of the Australian Reserve (RBA) stipulated in the statement of monetary policy of May. expanded 1.3% year -on -year, without changes compared to the fourth quarter of 2024, but also below 1.5% expectations. “
“Continuous uncertainty in relation to the current trade war will probably have negative implications for consumption and business investment in Australia. Therefore, our economic growth forecast for Australia has been reduced slightly 1.8% in 2025 (compared to 1.9% previously).”
“We had planned an additional 50 basic points reduction in 2025 (reductions of 25 basic points in August and November). That said, given the deceleration of the economy, low inflation and the increase in the unemployment rate, now we hope that the RBA takes the cash rate to a moderately accommodating territory, delivering another 50 basic points later to reach a cyclic minimum of 2.85% (compared to 3.35% before) mid -2026. “
Source: Fx Street
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