Australia Q4 GDP due 7 March — preview taking into account the poor data

This is partially a response to the Australian Q4 data today and partially a preview of Wednesday’s economic growth data for the final quarter of 2017Its via Westpac, first on today’s data (in brief, bolding mine):


Q4,net exports 

  • a sizeable drag
  • subtracting a hefty 0.5ppts from activity
  • Exports stumbled in the final quarter of 2017
  • Exports are expected to perform better in 2018
  • Imports increased by 0.5% in the quarter and by 6.6% over the year to meet rising demand.

Public
demand

  • expanding at an above trend pace
  • upswing in investment underway
  • Q4 public demand surprised to the high side

And, for Westpac’s GDP preview:

Forecast for Q4 GDP growth rounded down to 0.4% q/q, 2.4% y/y

  • incorporates the downside surprises on
    inventories and profits

While
employment and hours worked were robust in the final
quarter of 2017 the decline in exports has taken the gloss off growth.

  • domestic demand +0.8%
  • inventories +0.1ppts
  • net exports -0.5ppts

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