Yes, it’s Scummo’s Keynesian boom, via UBS:
Public demand boomed again, up 1.6% q/q, adding 0.4% to GDP; saves the day Q4-18 ‘underlying’ public demand volumes surprisingly boomed 1.6% q/q (UBS: 0.0%, ‘headline’ 1.5%) after Q3 spiked 2.4%, the equal biggest 2 quarters since the GFC; & surged ~5.2% y/y. Public consumption lifted (1.8% q/q, 5.6% y/y), & underlying public capex rose (~0.8%, ~3.9% y/y) despite negative construction. Hence, underlying public demand will add a massive ~0.4%pts q/q (after ~0.6%pts in Q3) & ~1¼% y/y to GDP. Implications: Q4 real GDPe still 0.2% q/q and 2.4% y/y – consumption uncertain For Q4 real GDP, net exports dragged as expected, but a surprise boom in public ‘saved the day’, alone adding 0.4%pts & takes away most downside risk. We still forecast real GDP to slow to 0.2% q/q & 2.4% y/y, well below consensus & the RBA at 0.5%/0.6% q/q, which would raise the risk of an early RBA cut.
We’re at the peak right now for the fiscal pulse’s contribution to growth. Public consumption growth will wane as state governments are forced into austerity by crashing stamp duties and infrastructure stops adding to growth:
