Australia's economy continues to struggle amid household spending pressures

Posted on June 7, 2024   |  

Australia's economy sustained subdued growth in the first quarter, impacted by high interest rates and living costs.

Gross domestic product (GDP) rose by only 0.1%, falling below economists' expectations of 0.2%.

Annual economic growth stood at 1.1%, lower than the anticipated 1.2%, marking the weakest performance since 1992, excluding the pandemic period.

This slowdown may prompt the Reserve Bank of Australia (RBA) to consider easing its monetary policy, as rates have been held steady at 4.35% in recent meetings.

The Australian dollar remained stable around 66.50 US cents, while money markets suggest a possibility of an interest rate cut by December.

Household spending increased by 0.4%, while the savings ratio declined to 0.9% from a revised 1.6%.