Key insights
- Australia's Q1 GDP growth slowed to 0.3%, missing market expectations and indicating a potential slowdown due to higher borrowing costs and fuel prices. While annual growth remains solid at 2.5%, the Reserve Bank of Australia's concern about inflation suggests continued rate hikes. This global economic deceleration could indirectly impact US markets by reducing demand for US exports and potentially signaling broader global weakness.
SYDNEY, June 3 (Reuters) - Australia’s economy slowed in the March quarter as a boom in data centres boosted business investment but also sucked in imports, a pullback that is likely to worsen in the face of higher borrowing costs and fuel prices.
Data from the Australian Bureau of Statistics out on Wednesday showed real gross domestic product (GDP) rose 0.3% in the first quarter, easing from a 0.9% jump the previous quarter. Market forecasts were for 0.5%, but with downside risks.
Annual growth slowed a tick to a still solid 2.5% pace. The Reserve Bank of Australia judges the economy cannot grow much above 2.0% without generating inflation, leading it to raise rates three times so far this year.
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