Reserve Bank Awaits Economic Growth Data as Rate Hike Looms

The Reserve Bank of Australia will closely examine economic growth data as it weighs another potential interest rate hike. According to Westpac senior economist Pat Bustamante, GDP growth is expected to slow to 0.2% in the June quarter.

This follows hotter-than-expected inflation data that has set the stage for another rate rise. The Australian Bureau of Statistics will release national accounts figures on Wednesday, which will be a key milestone for the Reserve Bank.

Bustamante expects the annual growth rate to slow to 1.7% year-on-year, but notes that household spending grew at its fastest rate since the series began in 2023 in July. He also points out that investment in data centres, renewable energy, and home building are supporting economic resilience.