Next week is one of the big ones for the economy, with the two highlights being September quarter GDP and the meeting of the RBA Board.
To the easy one first. The RBA Board will leave interest rates unchanged at 1.5 per cent and unfortunately, will not have the benefit of having the GDP result before it to help it shape its views on the economy. It will be relying pretty much on some old news on the economy, which means it will sit tight.
The GDP result will be of much greater interest. Just how strong is the economy? Where is that growth coming from? Which sectors are acting as a handbrake and holding back a lift to a stronger pace? The current market consensus forecast is for GDP growth of around 0.7 per cent for the quarter which translates to annual growth around 3 per cent. This is a reasonable rate of expansion with the bulk of the annual growth being driven by a surge in export volumes, a lift in public sector infrastructure and a welcome uptrend in business investment. Household spending growth is likely to be subdued and remain the weakest link in the economic story.
