Australia Q2 GDP Growth Beats Estimates

The Australian economy grew 0.6% qoq in Q2 2025, accelerating from an upwardly revised 0.3% in Q1 and topping market consensus of 0.5%. It was the 15th straight quarter of rise, driven by domestic final demand (0.5 ppts). Household consumption jumped (0.9% vs 0.4% in Q1), due to higher spending on discretionary and essential goods during the Easter and ANZAC holidays. Government spending also picked up (1.0% vs 0.3%), on higher social benefits and national defense outlays. Net trade added 0.1 ppts, with exports (1.7% vs -0.7%) outpacing imports (1.4% vs 0.1%). In contrast, public investment slumped for the third quarter (-3.9% vs -2.4%), the steepest drop since Q3 2017, weighed by reduced state spending on transport and health projects, and lower defence investment. Inventories dragged 0.1 ppts, the first drop in three quarters. On a yearly basis, the GDP grew 1.8%, above forecasts of 1.6% and the fastest pace since Q3 2023. The household savings ratio fell to 4.2% from 5.2% in Q1.