Australia's economy slowed faster than expected after a high growth rate in the first half of the year, the Australian Broadcasting Corporation reported. Gross domestic product (GDP) grew only 0.3 percent in the third quarter, up 2.8 percent from a year earlier.
The report said it was the slowest quarter of growth in two years and was not in line with the Bank of Australia's expectations. Data from the Australian Bureau of Statistics showed a significant decline in the third quarter from an annual growth rate of 3.4 percent in the second quarter. Despite the strong performance in net exports and fiscal spending, the domestic economy was dragged down by construction, and the performance was weak. Retail and manufacturing growth was flat.
Alex Joyner, an economist at (IFM Investors), an industry fund management investor, said household spending rose only 0.3 percent in the third quarter, compared with a year-on-year increase of 2.5 percent. The household savings rate is at its lowest level since 2007 of 2.4 percent, suggesting consumers are reducing their normal savings to pay for their necessities.
Even if GDP rebounded to 0.6 percent in the fourth quarter, the full-year GDP growth was 2.9 percent, down from the Bank of Australia's forecast 3.5 percent GDP growth, economic analyst Marseille said. He further warned that the negative effects of falling house prices and tighter credit conditions had not yet been reflected in third-quarter data. This series of results will slow GDP growth to 2.5% in 2019.
The report also noted a 0.3% drop in real net disposable income per capita, indicating a decline in household wealth and a decline in living standards. Felicity Emmett, an economist at ANZ Bank, said wage growth for the full year was only 1.2 percent and continued to slow, which she said was a disappointing result. (intern Li Shengyin)
