Analysis by Region - Asia Pacific
Australian Q1 GDP growth was in line with our expectations at 0.8% q/q, taking the y/y pace of expansion to 3.3%. Household spending contributed strongly to growth, but investment activity was subdued in the quarter, with construction impacted by labour and materials shortages, along with disruption caused by flooding late in the quarter. Cost pressures continue to mount, which will dampen activity into 2023 as some projects are delayed or forgone in the higher cost environment. Faster inflation and a more aggressive response from the RBA have led us to downgrade our forecast for 2022 GDP growth to 4% (from 4.3%), while our outlook for 2023 is little changed at 2.9%.
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