Australia’s gross domestic product (GDP) expanded by 2.3% year-on-year in the first quarter, slightly below analyst expectations, according to data from the country’s Bureau of Statistics.

Economists surveyed by Reuters had anticipated a growth rate of 2.4%, compared to the 2.7% expansion recorded in the previous quarter of 2022. On a quarter-on-quarter basis, GDP increased by 0.2%, falling short of the 0.3% forecasted in the Reuters poll.

Katherine Keenan, head of National Accounts at Australia’s Bureau of Statistics, noted that while this marks the sixth consecutive quarterly GDP growth, it is the slowest rate since the Covid-19 Delta lockdowns in the third quarter of 2021. Keenan identified private and public gross fixed capital formation as the primary drivers of GDP growth during the quarter.

The GDP figures hold significance for the Reserve Bank of Australia (RBA) in determining its monetary policy decisions. Just recently, on Tuesday, the RBA surprised the markets by raising its benchmark policy rate by 25 basis points to 4.1%, reaching an 11-year high. The central bank’s decision to tighten monetary policy indicates its concern over inflationary pressures and a desire to manage the country’s economic recovery amid a changing global landscape.

Reserve Bank of Australia Surprises Market with Interest Rate Hike Amidst Inflation Concerns