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1. Australia’s GDP rose a stronger-than-expected +0.6% q/q and +1.8% y/y in Q2. The RBA had pencilled in +0.5% q/q and +1.6% y/y in the August SMP.
Stronger-than-expected household consumption growth (+0.9% q/q) accounted for all of the upside surprise (see below).
Recall that adverse weather in Queensland and Northern NSW is estimated to have subtracted 0.1-0.2ppts from Q1 GDP growth, so some of the improvement in Q2 reflects a recovery in spending.
Non-farm GDP growth (+0.6% q/q & +1.5% y/y) was solid and revised higher in Q1 (as farm GDP was revised lower).
Weaker mining output has weighed on Australia’s GDP growth in recent quarters, with real non-mining output rising a solid +2.2% y/y in Q2.
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