Via Morgan Stanley:
2Q GDP tracker stands at +0.2% qoq, which would see annual GDP growth slow to the low-1s, and confirms our thesis that Australia is out-of-sync with the global recovery. Looking into FY18, headwinds shift to falling real wages and tighter credit, with consensus likely further disappointed.
2Q growth tracker at+0.2%: Ahead of this week’s construction and capex data, we have updated our Australian GDP tracker, which sees 2Q at just +0.2% qoq. This would again fall well short of consensus (+0.5% qoq) and an RBA-implied +0.7% qoq ,although it is a little stronger than the flat (or even negative) estimate that we initially pencilled in for 2Q after a +0.6ppt inventory contribution saved 1Q GDP (+0.3% qoq). On a year-ended basis, GDP growth is set to slow to thelow-1s (MSe +1.1% yoy in 2Q17), in line with our view that Australia remains out-of-sync with growth recoveries in the US (2.1% yoy), Europe (2.2%), Japan (2.1%) and Canada (4.6% in May).
