Real GDP rose by 0.6% in QII. This outcome matches that of recent quarters and was a touch higher than the consensus expectation for a 0.5% rise (CBA (f): 0.6%). Annual growth printed at 2.6%. The economy was still running at a belowtrend pace as at mid year. So the risks still lie with rising unemployment and low inflation. And the RBA will maintain an easing bias as a result. Nevertheless, today’s growth reading is a respectable outcome given some of the economic headwinds at play.
Nominal GDP rose by only 2.5% in 2012/13. This was the weakest outcome since the early 1990s recession. Nominal GDP is the broadest measure of income across the economy. This income weakness was concentrated in the “profits” component. It explains much of the shortfall in tax revenues and persistent low levels of business confidence.
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