GDP Comes in Soft

• Q1 GDP came in softer than expected at 0.2% for the quarter (1.3% year-on-year). Private demand helped support growth, with household spending rising 0.4%, partly driven by the conclusion of electricity subsidies.
• Business and dwelling investment made small positive contributions, while exports fell due to weather disruptions in NSW and QLD. Government spending also slowed.
• Temporary factors were at play, but the result was still weak overall. Markets are increasingly expecting earlier rate cuts, with 82bps of RBA easing priced in by the end of 2025.
• Today, attention turns to the ABS Monthly Household Spending Indicator and the Goods Trade Balance, which will offer further insight into consumer activity and trade conditions.