Australia’s current account deficit came in worse than expected at a seasonally adjusted $17.46 billion in figures from the Australian Bureau of Statistics
Most economists had expected a deficit of $17.1 billion for the December quarter.
The ABS says this could subtract 1.3 percent from Australia’s economic growth figures for the quarter. With GDP figures to be released on Wednesday by the ABS.
In reacting to the announcement economists weren’t too concerned about trade weakness putting a dent in GDP forecasts.
“This certainly does take a little bit off of GDP but it’s not out of the ballpark,” said AMP Capital chief economist Shane Oliver. “Our GDP forecast is 0.8%, and we wouldn’t be inclined to revise it.”
This data eases speculation that the Reserve Bank of Australia will increase the official cash rate to 4 percent from 3.75 percent currently.
“Recent monthly inflation reports were sending signals that inflationary pressures were building up a head of steam, hence this benign report suggests that runaway inflation isn’t entrenched, yet,” said Annette Beacher, senior strategist at TD Securities.
The RBA will be making an official announcement on interest rate policy at 2:30pm today.