RBA Weighs Economic Growth Data Amid Inflation Concerns
Strong economic growth data is expected to further support the case for another rate hike from the Reserve Bank of Australia. The Australian Bureau of Statistics will release national accounts figures on Wednesday, which are expected to show a GDP growth rate of 0.2% in the June quarter. Despite higher interest rates and fuel prices being headwinds, Westpac senior economist Pat Bustamante notes that the economy has been showing signs of resilience, with investment in data centres, renewable energy, and home building.
The Reserve Bank will look to economic growth data to finalize its position on another rate hike. GDP growth came in at 0.3% in the March quarter, but the annual rate was still 2.5%, above the RBA's assumption for how fast the economy can grow without fuelling inflation.
The Reserve Bank chief economist Sarah Hunter will appear before a Senate hearing on intergenerational housing inequity on Thursday. While she may deliver some insight into the rise in housing unaffordability, there is unlikely to be any new information on monetary policy.