National

Upbeat economic growth expected despite rate rises

By AAP Newswire

Mar 1, 2023

General scene at the Melbourne Markets in Epping. — Upbeat economic growth is expected in December quarter figures despite rising interest rates. -AAP Image

Australia's economic growth likely ended the year strongly despite mounting challenges facing growth prospects.

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The Australian Bureau of Statistics will release the December quarter national accounts on Wednesday, with the economy broadly expected to have expanded by 0.7 per cent over the quarter and 2.7 per cent on an annual basis.

Growth in the September quarter lifted 0.6 per cent over the three-month period and 5.9 per cent annually, from a low base induced by COVID-19.

Felicity Emmett from ANZ said the bank's economists have still upgraded their quarterly growth forecast a touch, from 0.9 per cent to one per cent.

"A one per cent gain for the quarter would be a solid result and suggests the economy ended the year with quite a bit of momentum despite aggressive monetary tightening," Ms Emmett said.

Inflation and wage indicators contained in the national accounts would be of greater interest to the Reserve Bank than the headline GDP figure, the senior economist said.

"We expect the RBA's preferred measure of wider labour costs – non-farm average earnings per hour – to have risen a modest 0.6 per cent quarter on quarter in the December quarter."

The ABS will also release the latest monthly inflation figure on Wednesday.

The monthly CPI indicator rose 8.4 per cent in the 12 months to December.

By AAP Newswire

Australian Associated Press