Chidu Narayanan, economist at Standard Chartered, points out that Australia’s GDP growth slowed further in Q3 to 0.4% QoQ on slowing consumption and declining investment.

“In y/y terms, growth picked up marginally to 1.7% from 1.6% but remains well below trend growth of c.3%. Government spending was the only source of strength in Q3; other components of growth (barring inventories) slowed from Q2. We expect full-year 2019 growth to slow to a multi-decade low of 1.7%, picking up (due to a low-base) to a still-weak 2.2% in 2020. We expect labour-market conditions to deteriorate sharply over the next few months as declining construction activity leads to significant job losses. The unemployment rate is likely to rise above 5.5%, weighing further on household consumption. Meanwhile, we see net exports subtracting from growth in the 2020 as they decline from a high base. We expect two more 25bps rate cuts from the Reserve Bank of Australia (RBA), in February and Q2-2020, as growth slows further. We expect the central bank to embark on quantitative easing (QE) after hitting the cash rate floor of 0.25%; we expect this to come only at end-2020 or later.”