<?xml version="1.0" encoding="ISO-8859-1"?> <docID>334604</docID> <postdate>2024-12-04 12:28:07</postdate> <headline>Economy barely growing, household consumption weak</headline> <body><p><img class="size-full wp-image-287307" src="https://citynews.com.au/wp-content/uploads/2023/07/IMG_7438-resized.jpg" alt="Reserve Bank Building, London Circuit, Canberra" width="1200" height="900" /></p> <caption>Borrowers are hopeful the Reserve Bank of Australia will soon start lowering interest rates..</caption> <p><span class="kicker-line">By <strong>Poppy Johnston</strong> in Canberra</span></p> <p><strong>Australia's economy is growing more slowly than thought, despite tax cuts supporting household incomes.</strong></p> <p>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.</p> <p>The September result was well below the 1.1 per cent consensus forecast.</p> <p>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.</p> <p>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.</p> <p>The strength this quarter was driven by the public sector, with both government consumption and public investment big contributors to growth.</p> <p>Private demand through household consumption and business investment were weak, the bureau said.</p> <p>The Reserve Bank of Australia is trying to engineer a slower economy by keeping interest rates elevated to slow inflation.</p> <p>Though with the economy soft and price pressures easing, attention has turned to the timing of interest rate cuts.</p> <p>Oxford Economics Australia head of macroeconomic forecasting Sean Langcake said GDP growth would slowly pick up in the coming quarters.</p> <p>"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.</p> <p>"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."</p> </body>