Bank economists had tipped that the Australian economy would narrowly avoid a contraction in GDP when the Q4 national accounts are released on Wednesday.
Most economists tipped that the economy would grow by 0.2% to 0.3% over Q4, with per capita growth contracting for a fourth consecutive quarter.
Source: ABS
The Q4 business indicators data released on Monday by the Australian Bureau of Statistics (ABS) has thrown a spanner in the works, with inventories recording a sharp 1.7% decline over the quarter:
Source: ABS
As shown by Alex Joiner below, the decline in inventories is expected to lop 1.0% off Q4 GDP after adding 0.9% the previous quarter:
That is a big miss and heightens the likelihood of a negative headline GDP print on Wednesday and a deeper per capita recession.
