Prior quarter was +0.4% Real GDP y/y +2.6% vs +2.2% expectedPrior y/y GDP was +2.1%Final consumption expenditure +0.5% vs +0.6% priorGDP chain price index +1.4% vs +0.8% priorGross fixed capital expenditure +0.7% vs +3.0% prior
This is a good report, though there has been little reaction from AUD.
Australia just dropped a Q4 GDP print that blew past expectations and puts the recovery story front and centre.
After flirting with stall speed through mid-2024 — when quarterly growth scraped down to barely 0.1% — the rebound has been real. Growth stepped up through early 2025, printing around 0.4–0.5%, before surging to roughly 0.7% around the middle of the year. The latest read has cooled back to 0.4%, but the trend is still comfortably above the 2024 lows.
In the latest report, year-on-year growth came in at 2.6% against a consensus 2.2%, a meaningful beat that accelerated from the prior quarter’s 2.1%. For an economy that was barely registering a pulse back in mid-2024, that’s a strong trajectory and it’s going to make life interesting for the RBA.
Under the hood though, it’s not all green. Final consumption expenditure slowed to 0.5% from 0.6% — not a disaster, but it shows households are still being careful despite the improving macro backdrop. The consumer isn’t leading this charge.
Meanwhile the GDP chain price index jumped to 1.4% from 0.8%, which is going to catch the RBA’s attention. Stronger growth and firmer prices is not the combination that opens the door to rate cuts. If anything, this print increases the likelihood of further rate hikes and sooner.
AUD/USD was last down 15 pips on the session to 0.7019.
This article was written by Adam Button at investinglive.com.