There’s a possibility that the September quarter GDP, to be reported in the national accounts for the quarter out later this morning, could be better than expected.
Instead of the widely forecast rise of 0.5% or 0.6% by market economists, we could be looking at a rise of up to 1%.
That would boost the annual rate above 3.6% and perhaps higher (there could be a significant revision to the June quarter figure of 3.4%, judging by revisions in some data since the original reports).
Market economists had forecast an annual rate of between 3.1% and 3.5% for the three months to September 30.
Data released yesterday from the Australian Bureau of Statistics for the September quarter current account and government finance and transactions reveal a strong than expected contribution from both.
The ABS said the current account, which saw a sharp fall in the size of the overall deficit because of an improvement in the trade surplus is expected to contribute 0.4 percentage points to growth in the September quarter 2018 volume measure of GDP.”
That compares to the 0.1 percentage point contribution in the June GDP rise of 0.9%. The improvement in the September quarter is four times the 0.1 percentage point contribution in the June quarter current account and national accounts. That follows higher iron ore, coal, LNG and oil prices and a significant improvement in our terms of trade which fell 1.3% in the June quarter.
According to ABS data on Monday, there will be no contribution from business inventories in the quarter, while small rises in corporate profits and wages might end up making a smaller than expected addition to GDP, or none at all.
On top of this, the government finance reports showed much stronger contributions that first expected. In fact some forecasters though there would be no contributions.
The ABS reported yesterday that “Total general government final consumption expenditure” rose by $423 million, a rise of 0.5% compared with the June quarter 2018, “which is expected to add 0.1 percentage points to growth in the September quarter 2018 volume measure of GDP,” according to the ABS. That will be half the June quarter contribution of 0.2 percentage points.
The ABS said that “Total public gross fixed capital formation” increased by $749 million, which was a 3.4% rise from the June quarter “which is expected to add 0.2 percentage points to growth in the September quarter 2018 volume measure of GDP.” There was no contribution to GDP in the June quarter.
And retailing is expected to contribute 0.2% in volume terms to growth
