Australia's GDP Growth Adds Pressure on RBA to Raise Interest Rates

Australia's economy has experienced stronger-than-expected growth, according to data released by the Australian Bureau of Statistics. The country's gross domestic product (GDP) grew by 2.1 per cent in the last financial year, with households continuing to behave cautiously despite the impact of higher interest rates and global events.

Treasurer Jim Chalmers described the results as positive for the nation, stating that 'growth is as strong, if not stronger, than every major advanced economy'. However, the hot GDP result could add pressure on the Reserve Bank of Australia (RBA) to raise interest rates again to close the gap between supply and demand.

David Bassanese, chief economist at financial firm Betashares, said that while the data was slightly better than market expectations, it still left Australia's economy 'in a rut'. He stated that 'the saving grace from the economic rut revealed by these numbers is they do not compel the RBA to raise rates, but they also do not rule out a hike in the future'.