The unexpectedly large 1.7 per cent drop in inventories will wipe a full percentage point from the December quarter national accounts result,to be released on Wednesday,which was already expected to be soft because of the struggles facing households.
Some economists now believe the quarter could show a small contraction,following on from the modest 0.2 per cent lift in economic output recorded in the September quarter.
Treasurer Jim Chalmers noted the Reserve Bank increased official interest rates to 4.35 per cent in the middle of the December quarter,adding to the fallout from global economic uncertainty and high inflation.
Loading
“Most people think that the December quarter was quite weak in our economy,I think that too,but it remains to be seen how weak,” he told Sky News on Monday.
The housing sector is another area struggling under the weight of high interest rates.
The bureau reported total building approvals fell by 1 per cent in January. In trend terms,the number of homes approved for construction was the lowest monthly result since early 2012 under the Gillard government.