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Economy grows weaker-than-expected on 0.1 per cent GDP rise

A slower economy is an expected consequence of the central bank's series of interest rate hikes

A slower economy is an expected consequence of the central bank's series of interest rate hikes Photo: AAP

Australia’s economy posted a modest 0.1 per cent of growth in the first three months of the calendar year, coming in a little weaker than the 0.2 per cent expected lift.

On an annual basis, gross domestic product as compiled by the Australian Bureau of Statistics rose 1.1 per cent, marking the lowest through-the-year growth since December 2020.

ABS head of national accounts Katherine Keenan said growth was weak in March and fell for the fifth consecutive quarter on a per capita basis, down 0.4 per cent in March and 1.3 per cent through the year.

Domestic final demand was subdued over the quarter, growing just 0.2 per cent, with the rise in imports of goods and services offset by a rise in exports and change in inventories.

The economy has been losing steam as higher interest rates work to dampen demand and weigh on inflation, which has been moderating but remains above the Reserve Bank of Australia’s 2-3 per cent target band.

A slower economy is an expected consequence of the central bank’s series of interest rate hikes but the goal is to tame inflation without pushing the economy into recession and pushing unemployment up needlessly high.

In the December quarter, the economy expanded 0.2 per cent and 1.5 per cent on an annual basis.

Gross domestic product is the primary way that activity in the economy is measured.

-AAP

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