Government and exports aid GDP

More GDP inputs, this time better:

  • net exports to add 0.4%
  • public consumption and investment to add 0.3%

So, at this stage it looks like:

  • private investment weak (probably negative);
  • public investment 0.3%;
  • household consumption (perhaps weak based on retail volumes and imports);
  • net exports 0.4%, and
  • inventories -0.3%.

Consumption the key. As always, GDP is a craps shoot. WBC now sees risk evenly balanced:

Implications for Q3 GDP forecast

We have rounded down our forecast for Q3 GDP growth from 0.7%qtr to 0.6%qtr – with risks evenly balance.

Annual growth is a forecast 3.3%, little changed from the 3.4% outcome in Q2.


The arithmetic of our Q3 GDP forecast is: domestic demand 0.5%; inventories -0.3ppts; and net exports +0.3ppts.

As confirmed in the data today, government spending and net exports are key growth drivers in the quarter. Government spending is running at a brisk pace and has considerable further upside as governments continue to commit to additional investment projects, particular transport infrastructure.

Key uncertainties: the consumer and the drought – with a lack of partials around consumer spending on services and on farm inventories. The drought in NSW and surrounding areas is likely to have its biggest impact in Q4 and Q1 – but there is a risk of an inventory drag in Q3.

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  1. UE
    “The current account deficit (CAD) improved by $1.4 billion in Q3 to $10.7 billion: Over the year, the CAD improved by $11.8 billion to $48.9 billion: Assuming Australia’s GDP grows by 0.6% as expected in the ”
    as long as GDP grows everything is sweet

    The latest Liberal Party incident or Julia Banks issues are sooooooo much more important than a CAD issue.
    Oh bloody beauty! Everything is all good then – bonnzer – for us!!!! Screw later generations! Who gives a rat’s?
    I suppose it is damned hard to actually put the correct emphasis on the CAD while one is advocating the destruction of Australian industry, the total shutdown of our Coal Exports and rural industries, to meet the Paris Agreement that is based on mythical so-called Climate ‘Models’ This wipes out about another $120B worth of exports and import replacement manufacturing.
    So yep….CAD’s MUST be nothing to worry about. Just let a few more farmers go round behind the shed and blow their heads off – in this Australia we now have – that’s a good thing! Less people to disagree with the extremist meme!

    Strewth! Undamnedbelievable!