Australia: Weak Q3 GDP outcome unlikely to be repeated in Q4 - NAB

Multiple one-off factors, including weather related disruptions, contributed to the weak Q3 GDP outcome, but are unlikely to be repeated in Q4 expects analysts at NAB.

Key Quotes

“However, the lower base for growth has led to a downgrade of our 2016 and 2017 growth forecasts to 2.3% and 2.4% respectively. Nevertheless, near-term risks are tilted to the downside with a significant slowdown in indicators such as business conditions, employment and household spending.”

“Further out, our forecasts continue to include a notable slowdown, which risks a rise in the unemployment rate in the absence of more policy stimulus – we still expect two more cash rate cuts by the RBA from mid next year. Our unemployment rate forecasts have been revised up to around 5¾% through to 2018.”