Australia Q1 2025 GDP Misses Expectations, Boosting RBA Rate Cut Hopes

Australia Q1 2025 GDP Misses Expectations, Boosting RBA Rate Cut Hopes

Soft Q1 Growth Highlights Economic Challenges

Australia’s GDP grew by only 0.2% quarter-on-quarter in Q1 2025, significantly missing market expectations of 0.4% and the Reserve Bank of Australia’s May forecast. The growth rate also slowed compared to 0.6% in Q4 2024. Year-on-year growth remained steady at 1.3%, but below the predicted 1.5%.

RBA Likely to Ease Monetary Policy Further

The weaker-than-expected GDP figures increase pressure on the Reserve Bank of Australia to consider further interest rate cuts to support the economy. The ongoing global trade war poses downside risks to Australian consumption and business spending, leading analysts at UOB Group to slightly lower their 2025 growth forecast to 1.8% from 1.9%.

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