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Sydney Harbour and the skyline of the central business district (CBD) in Sydney, Australia, on Tuesday, April 29, 2025.
Bloomberg | Bloomberg | Getty Images
Australia’s economy grew less than expected in the first quarter this year, as growth stalled amid the simmering global trade tensions.
The country’s economy grew 1.3% year-on-year in the first quarter, lower than the estimated 1.5% growth among economists polled by Reuters. That was unchanged from the 1.3% year-on-year growth in the prior quarter.
The GDP figure comes as the Reserve Bank of Australia slashed rates to its lowest level in two years at its last meeting in May as inflation figures concerns receded, offering some room for the RBA to ease monetary policy.
The central bank said in its statement after the meeting that it expects domestic GDP growth to pick up in 2025, driven by a recovery in consumption and continued strength in public demand.
“However, the pick-up is expected to be more gradual than previously forecast due to weaker global demand, global and domestic uncertainty and weaker momentum in consumption,” it added.
Inflation in the country has eased to a four-year low of 2.4% in the first quarter of 2025, within the RBA’s target range of 2% to 3%.
The RBA said in its May meeting that its baseline assumptions for the country’s economy going forward would reflect “somewhat weaker” demand for Australian exports.
It said that “some weight was placed on the possibility that heightened policy uncertainty might dampen domestic investment and household spending; and near-term momentum in consumption was a little weaker.”
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