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Economic growth might beat expectations

Australia's economic growth is more likely to have exceeded expectations than fallen short of them in the second quarter of the year.

Economists have tipped the national accounts will show 0.7 per cent in growth in the June quarter when they are laid bare on Wednesday.

The rise would mean the economy had expanded by 2.8 per cent compared with a year before.

But figures released this week that play a role in growth have led some to believe there's a chance it may have been steeper.

RBC chief economist Su-Lin Ong has lifted her growth forecast from 0.7 per cent to 0.8 per cent, based on stronger than expected inventories in business data on Monday, along with net export data on Tuesday.

Estimated business inventories, in seasonally adjusted chain volume terms, rose 0.6 per cent in the latest quarter, and were up 1.8 per cent in the year.

Net exports are expected to contribute 0.1 percentage points to growth.

JP Morgan chief economist Sally Auld said her firm's growth forecast remains at 0.7 per cent, but was at a slight risk of being beaten based on the net exports.

But she noted Australia's current account deficit, also released on Tuesday, was wider than expected as income debts accumulated.

The deficit grew to $13.5 billion in the three months to June, missing market expectations of a fall to $11 billion, according to seasonally adjusted figures from the Australian Bureau of Statistics.

Westpac senior economist Andrew Hanlan is keeping his forecast for growth at 0.6 per cent, believing there's a small risk of that being beaten after positive surprises on profits and wages.

Company gross operating profits rose two per cent in the June quarter, and are up 11.4 per cent from a year ago, seasonally adjusted.

Estimated growth in wages and salaries was 1.2 per cent for the quarter and 4.5 per cent for the year.

This month's economic growth would follow a 1.0 per cent rise in the three months to March, which marked the strongest lift in almost two years.

Austrlaian Associated PressBack to Breaking News

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