Exports, spending cuts to hurt GDP growth
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November 30 2012, 2:56PM
SYDNEY, Nov 30 AAP Economists say weaker exports and government spending cuts have been slowing economic growth.
AAP's survey of 13 economists on Friday revealed a median forecast for the Australian economy to have grown by 0.6 per cent in the September quarter.
It is also expected to have grown by 3.1 per cent in the year to September, a considerable slowdown compared to the 3.7 per cent growth recorded in the 12 months to June.
The Australian Bureau of Statistics will release the national accounts for the September quarter on December 5.
TD Securities Asia-Pacific macro strategist Alvin Pontoh said weaker exports and spending cuts from state and federal governments were expected to weigh on economic growth.
But he said strong business investment in capital goods - including equipment and buildings - had helped growth in the September quarter.
Mr Pontoh expected growth to slow to 0.5 per cent in the September quarter.
"It's lower than the first half of the year but it is not a bad rate of growth," he said.
"In the first half of the year you had strong consumption, but that is partly because of a number of temporary factors, including retailers' discounting and carbon tax compensation, but those effects are going to fade."
CMC Markets chief market strategist Michael McCarthy said the pace of growth would improve slightly in the quarter, following interest rate cuts in May and June.
He said the rate cuts had provided a boost for consumer sentiment, which would help the economy.
"Im looking for a modest pick-up," he said.
"I'd be suggesting that we're heading up to 0.8 for the third quarter, and annually that should have us bumping up towards the 3.8 (per cent) level."
The Reserve Bank of Australia cut the cash rate, now at 3.25 per cent, by half a percentage point in May and a quarter percentage point in June.
Mr McCarthy had a more upbeat outlook for next year and forecast a pick up in consumer spending and annual growth of 4.0 per cent.
"Growth will be consumer led," he said.
"Although the slowdown in mining investment is a drag, it also eases pressure that some parts of the mining boom has been putting on some parts of the economy."
AMP chief economist Dr Shane Oliver said the September figures would show `ok-ish' growth, but warned 2013 was likely to be a more difficult year for the economy as the mining investment boom peaked.
He said capital expenditure data on Thursday showed businesses had cut back on their spending plans for the current financial year, which he believed would drag growth down to an annual rate of about 2.5 per cent.
"The September national accounts will probably look quite ok-ish but the Capex figures are a good guide as to how things will look, going forward, and they look decidedly soft," he said.
By Evan Schwarten and Caroline Smith