Australia's economy is growing more slowly than thought, despite tax cuts supporting household incomes.
Over the year, the economy grew 0.8 per cent, the lowest annual economic growth since 2020 and down from one per cent in June.
The September result was well below the 1.1 per cent consensus forecast.
Australia's latest economic growth has been fuelled by government spending. (Dean Lewins/AAP PHOTOS)
On a quarterly basis, the Australian Bureau of Statistics recorded a minor improvement, with the economy growing 0.3 per cent in September, up from 0.2 per cent in the three months to June.
Bureau head of national accounts Katherine Keenan said the Australian economy grew for the twelfth quarter in a row but has been slowing since September 2023.
The strength this quarter was driven by the public sector, with both government consumption and public investment big contributors to growth.
Private demand through household consumption and business investment were weak, the bureau said.
The Reserve Bank of Australia is trying to engineer a slower economy by keeping interest rates elevated to slow inflation.
"The Australian economy grew for the twelfth quarter in a row, but has continued to slow since September 2023," Katherine Keenan, ABS head of national accounts— Australian Bureau of Statistics (@ABSStats) Visit https://t.co/ZK48YZNd2g pic.twitter.com/eFDcFrM74DDecember 4, 2024
Though with the economy soft and price pressures easing, attention has turned to the timing of interest rate cuts.
Oxford Economics Australia head of macroeconomic forecasting Sean Langcake said GDP growth would slowly pick up in the coming quarters.
"The fundamentals for an improvement in consumption growth are favourable," Mr Langcake said, with tax cuts, easing inflation and real wage gains supporting household incomes.
"But this improvement will be unspectacular, with the economy set to endure below trend growth in the near term while capacity constraints continue to bite."