The Australian growth figures for the fourth quarter are set to be released on Wednesday, March 6. Analysts at Commerzbank provide an analysis of the Aussie’s outlook ahead of the Gross Domestic Product (GDP) report.
No recession, but no turnaround in growth yet either
In recent quarters, the majority of G10 economies have significantly diverged from their pre-pandemic trends due to swift interest rate hikes. The growth gap between these economies and the United States is expanding, with Australia being a notable exception that continues to perform relatively well among the G10.
According to the Bloomberg consensus, there is no anticipation of an additional deceleration, but neither is there an expectation of a reversal. Instead, analysts foresee another quarter-on-quarter growth of 0.2%, which falls below the pre-pandemic trend.
Consequently, a gradual shift in trends is expected to occur in Australia as well. Our forecast suggests that the Reserve Bank of Australia (RBA) will implement rate cuts relatively late, supporting the Australian Dollar until such measures are taken. The RBA is likely to react sooner only if more robust indications of a real economic slowdown, signaling a potential recession,
