Currency Analyst since 2010

Australian economy’s in trouble?

FXBAZOOKA.com - Australia released today stronger than expected business investment data for Q2: private capital expenditure rose by 1.1% vs. an expected decline by 0.6%.

Despite this seemingly good news, spending on equipment, plant and machinery disappointed, and this is the only component of capital expenditure that feeds directly into second-quarter GDP data.

This made many economists reduce their forecasts for Australian economic growth. Private sector forecasts place GDP growth in the June quarter in a range from 0-0.5%. Westpac also revised down its forecasts for Australia’s economic growth in Q2 from 0.4% to 0.3%. The thing that worries the experts greatly is that in the first 3 month of the year Australia’s economy was boosted by strong exports, while now there’s a real risk that correction in net exports could result in a negative quarterly GDP result.

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