NAB Economics anticipates GDP growth of just +0.1% for Q2 2024, marking another quarter of weak performance.
Year-on-year growth is expected to be 0.8%, the lowest since the early 1990s, excluding the 2020 COVID lockdowns.
“Such a GDP growth outcome would have few direct implications for the RBA,” said Alan Oster (pictured above), group chief economist at NAB.
The forecast highlights continued soft consumption growth and further declines in underlying business and dwelling investment. However, public demand is expected to remain a key support.
“We expect household consumption growth of 0.3% q/q, below population growth,” Oster said.
Despite the weak growth, NAB expects the RBA to maintain its current stance, with no rate hikes anticipated in the near term.
“The RBA is unlikely to hike rates but rather stay on hold for an extended period,” Oster said, with a potential rate cut penciled in for May 2025.
Looking ahead, NAB forecasts an improvement in GDP growth over the second half of 2024, supported by easing household budget pressures and a boost from income tax cuts. However, productivity growth remains a concern, which could weigh on the broader economic outlook.
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