**As seen in Risk In The Week report 03/02/24, subscribe at cablefxm.co.uk/reports
Australia third-quarter output eased to 0.2% Q/q from the prior 0.4%, economists had been expecting the figure at 0.5%. The annual rate rose by 2.1% vs the median survey of 1.9%. Household savings ratio printed at 1.1% while spending was unchanged in the quarter. 3Q GDP contribution from net trade was negative 0.6ppt, gross national expenditure and domestic demand added 0.9ppt and 0.5ppt, respectively. At flat, the contribution from household consumption expenditure is the lowest since 3Q 2021.
The desk at Rabobank is relatively less optimistic than the consensus median for 4Q growth, they pencil output contracting by 0.1% while a more recent forecast from Barclays sees GDP falling 0.3%, 5bps lower than the median forecast. Economists expect a rebound in growth into the end of 2024, the 4Q projection sits at 0.5%. If the consensus 4Q projection materializes, the metric will miss the RBA's own forecast of 0.3%. Also, higher frequency data like consumer prices and the labour market supporting an earlier start of monetary policy easing, something markets have not priced in yet. Morgan Stanley sees the RBA slashing the Cash Rate by February 2025, and ANZ expects the first rate cut in November.
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