- The Australian gross domestic product is expected to be 0.4% in the first quarter of 2025.
- The Australian Reserve Bank is ready to implement more aggressive rate cuts if necessary.
- The Australian dollar is negotiated in a well limited range against its American rival.
The Australian gross domestic product (GDP) will be published on Wednesday, with mixed expectations before the ad. The figures of the first quarter (Q1) of the Australian Statistics Office (ABS) show that the economy has advanced modestly in the three months until March 2025. in Q4 of 2024.
Market analysts believe that, although the impact of the tariffs of the president of the United States (USA), Donald Trump, could be limited in the Australian economy, global uncertainty related to massive taxes will probably affect economic progress, at least in the short term. The tensions arose before the publication of GDP, since Trump doubled tariffs on the imports of aluminum and steel to the US from 25% to 50%.
The last headlines may not have a direct impact on the GDP of Australia Q1, but are affecting the mood of the market, mainly keeping the US dollar (USD) on the defensive despite intra -upset corrections.
What to expect from the Q1 GDP report
The annual rhythm of Australian economic growth is expected to have accelerated in the first three months of the year, with some assistance from the Bank of the Australian Reserve (RBA). After keeping the rates near record levels for a long time, the RBA Board finally began to cut the official cash (OCR) rate in February, reducing the reference index in 25 basic points (PBS) from 4.35% to 4.10%. A similar decision was made in May, with the OCR currently at 3.85%.
At that time, the accompanying statement said: “The uncertainty in the world economy has increased in the last three months and the volatility in financial markets increased drastically for a while. Although recent ads about tariffs have resulted in a rebound in financial market prices, there is still considerable uncertainty about the final scope of tariffs and political responses in other countries. being pronounced.
The minutes of the RBA meeting of May 20, published early on Tuesday, showed that officials considered a possible 50 -PBs cut, but finally opted for a more discreet action. Even so, those responsible for policies made it clear that the Board is prepared to “respond to international developments if they had material implications for activity and inflation” in Australia, referring to the possible effect of Trump’s global commercial war.
In a positive note, officials were safer about progress in inflation. The Trimmed Mean Annual Consumer Price Index (CPI) stood at 2.9% year-on-year (Yoy) in the quarter of March, marking the first time it is below 3% since 2021. The staff projected that general inflation will probably increase during the next year, but also expects the underlying inflation to be around the midpoint of the range of 2% -3%.
Before the announcement, the National Australian Bank (NAB) anticipates: “In general, we see that growth for 2025 will remain below the trend despite the ongoing recovery before increasing by about 2¼% in 2026. We see that the greatest risks for growth this year come from a weaker global context, and in particular, the risk that the growing global uncertainty will lead to a business investment and a business investment of weakest employment and despite consumers despite the improvement in the history of real income. “
On the other hand, Westpac states: “We have reduced our GDP forecast to 0.1% QOQ and 1.2% yoy in Q1 of 2025 after the last lot of indicators. Public demand, net exports and investment in intangibles disappointed. Although part of the weakness reflects major impacts to those expected of interruptions related to the weather, no doubt the growth remains slow.”
How can the GDP report affect the Australian dollar?
The Q1 GDP report will be published on Wednesday at 01:30 GMT. Before the announcement, the Australian dollar (AUD) weakens against the USD, with the aud/USD torque contributing around 0.6450. The US currency experienced a short -term demand after falling at the beginning of the week due to the growing tensions between the US and China.
In general terms, optimistic figures should boost the AU, while a slower growth rate should press the Australian currency.
Valeria Bednarik, chief analyst of FXSTERET, points out: “The Aud/USD torque is negotiated in a well -limited range since mid -May, with buyers aligned in the region of 0.6380/90 Above all their mobile socks, which remain without direction, while the technical indicators offer slopes of neutral at bassist, developing above their middle lines.
Bednarik adds: “An optimistic reading could push the AUD/USD torque to the 0.6530 region, while additional profits expose the price zone of 0.6570. The short -term support is located on the 0.6400 threshold, followed by the area of ​​0.6380.”
Economic indicator
Gross Domestic Product (Yoy)
The GDP publishes the Australian Bureau of Statistics and it is an estimate of the total value of the goods, services and structures produced in Australia. It is a gross measure of economic activity because it indicates the growth rate of the economy of a country. A reading superior to expectations is bullish for the Australian dollar, while a lower reading is bassist.
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Next publication:
MIÉ JUN 04, 2025 01:30
Frequency:
Quarterly
Dear:
1.5%
Previous:
1.3%
Fountain:
Australian Bureau of Statistics
The Australian Statistics Office (ABS) publishes the Gross Domestic Product (GDP) quarterly. It is published about 65 days after the quarter ends. The indicator is watched closely, since it presents an important panorama for the economy. A solid labor market, growing wages and increasing private capital spending data are fundamental for the best economic performance in the country, which in turn affects the monetary policy decision of the Bank of the Australian Reserve (RBA) and the Australian dollar. The real figures that exceed estimates are considered optimistic for the AU, since they could promote the RBA to harden its monetary policy.
FAQS tariffs
Although tariffs and taxes generate government income to finance public goods and services, they have several distinctions. Tariffs are paid in advance in the entrance port, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and companies, while tariffs are paid by importers.
There are two schools of thought among economists regarding the use of tariffs. While some argue that tariffs are necessary to protect national industries and address commercial imbalances, others see them as a harmful tool that could potentially increase long -term prices and bring to a harmful commercial war by promoting reciprocal tariffs.
During the election campaign for the presidential elections of November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy. In 2024, Mexico, China and Canada represented 42% of the total US imports in this period, Mexico stood out as the main exporter with 466.6 billion dollars, according to the US Census Office, therefore, Trump wants to focus on these three nations by imposing tariffs. It also plans to use the income generated through tariffs to reduce personal income taxes.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
