From Westpac:
Australia Sep quarter government finance statistics.
The ABS estimates that chain volume measure of government consumption expenditure rose 1.1% in Q3, stronger than our forecast for a 0.4% rise.
However, there is much confusion over the ABS estimate for the chain volume total public fixed capital formation. For the June quarter, the deflator used brings down the estimate value of the port sales from more than $5bn to just $1.3bn. This is significant as it changes the estimate change in real gross fixed capital formation from a reasonable –2% to a frankly unbelievable +25% (yes plus 25%). We have raised this issue with the ABS and they are looking into it.
For now we are going to use the –2% as the almost $4bn deflation of the value in the asset just does not seem reasonable.
On the basis of the above and the weak income ‘partials’ released yesterday we are comfortable staying with our forecast for a 0.7%qtr rise in the Q3 GDP release tomorrow, while acknowledging that the statistical discrepancy may be quite large between different measures.
