Analysts at National Australia Bank suggest that they have fine-tuned their forecasts for Australia’s growth in Q2 (now see 0.4 to 0.5% q/q) and see growth of 1.6% this year, before a small improvement to around 2¼% on a year-average basis in each of the out years.

“The unemployment rate is expected to lift slightly (reaching 5.5%), with employment growth slowing on the back of sub-trend growth. The key dynamic behind this slower growth is a weaker household sector with modest consumption growth (weak wage growth being a key headwind) and ongoing falls in dwelling investment. The public sector and net exports are likely to show some strength, offsetting some of this weakness. We also anticipate a solid performance from the business sector, with private investment likely to rise in aggregate on the back of growth in the non-mining sector, while mining should at least stabilise. However, a weak starting point, with low inflation and sizable spare capacity in the labour market are likely to see the RBA cut the cash rate further (indeed, their own forecasts embody a further 50bps of cuts).” analysts said.