Growth slows, but Treasurer upbeat as economy is in good shape

Marnie Banger
(Australian Associated Press)

 

Treasurer Josh Frydenberg says the Australian economy is in fundamentally good shape.

The economy grew by 0.2 per cent in seasonally adjusted terms in the December quarter and by 2.3 per cent in the year to December, according to the latest national accounts released by the Australian Bureau of Statistics.

The figures have failed to meet the expectations of both economists and the central bank.

Economists had forecast 0.4 per cent growth in the three months to December, and 2.6 per over 2018.

The Reserve Bank of Australia had expected year-long growth of 2.75 per cent.

“The Australian economy is in fundamentally good shape,” Mr Frydenberg told reporters in Canberra on Wednesday.

“We are on track to record our 28th year of consecutive economic growth – a remarkable achievement.”

He said the latest figures were consistent with trend growth.

Economists may now renew their prediction the central bank will be forced to cut the official cash rate at least once in 2019.

The RBA on Tuesday held at the rate at 1.5 per cent for the 31st consecutive month.

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