View of the Yarra River flowing through the city center of Melbourne, Australia.
Loop Images | Universal Image Group | Getty Images
Australia’s gross domestic product rose 2.3% year-on-year in the first quarter, barely below analysts’ expectations.
Economists polled by Reuters had forecast growth of two.4%, in comparison with a 2.7% increase in the fourth quarter of 2022. On a quarterly basis, GDP grew by 0.2%, in comparison with the 0.3% expected in a Reuters poll.
Katherine Keenan, head of national accounts at Australian Bureau of Statisticssaid: “That is the sixth straight quarterly GDP growth, but the slowest growth since the Covid-19 Delta lockdowns in September 2021.”
“Private and public gross fixed capital formation were the primary drivers of GDP growth this quarter,” Keenan said.
GDP readings are crucial to the Reserve Bank of Australia’s monetary policy decision-making process. On Tuesday alone, the RBA surprised markets and raised its benchmark rate of interest by 25 basis points to 4.1%, an 11-year high.
![The RBA is trying to](https://image.cnbcfm.com/api/v1/image/107251499-16860271591686027157-29767589240-1080pnbcnews.jpg?v=1686028137&w=750&h=422&vtcrop=y)
“Narrow Path”
Reserve Bank of Australia Governor Philip Lowe delivered a speech at the Morgan Stanley Summit in Australia on Wednesday morning, reiterating his position that the central bank will aim to be on a “narrow path”.
On this “narrow path” Lowe envisions, inflation in Australia returns to its goal range of two% to three%, the economy continues to grow and labor market gains are preserved.
“It continues to be possible to navigate this path and our ambition is to accomplish that. Nevertheless, it’s a narrow path and possibly a bumpy one, with risks on either side,” Lowe said.
Lowe explained that the intention to preserve improvement in the labor market “does not imply that [RBA] will tolerate continued higher inflation.
As such, a call was made on Tuesday to boost rates of interest again “to supply more confidence that inflation will return to focus on inside an inexpensive time,” he said.
That is the latest news, check back later for more information.