Treasurer Josh Frydenberg says the Australian economy is in fundamentally good shape, despite expanding by a below expectation 0.2 per cent in the December quarter.
The data released on Wednesday by the Australian Bureau of Statistics was below market consensus forecasts and fell short of the Reserve Bank’s downgraded full-year growth target of 2.75 per cent.
Household final consumption expenditure increased 0.4 per cent during the quarter, while government final consumption expenditure increased 1.8 per cent and contributed 0.3 percentage points to quarterly GDP growth.
The Australian dollar dropped to a two-month low 70.52 US cents from 70.88 just before the data was released at 1130 AEDT.
The figures failed to meet the expectations of both economists and the central bank.
Economists had forecast 0.4 per cent growth in the three months to December, and 2.6 per over 2018.
“The Australian economy is in fundamentally good shape,” Mr Frydenberg told reporters in Canberra on Wednesday.
“We are on track to record our 28th year of consecutive economic growth – a remarkable achievement.”
He said the latest figures were consistent with trend growth.
Economists may now renew their prediction the central bank will be forced to cut the official cash rate at least once in 2019.
The RBA on Tuesday held at the rate at 1.5 per cent for the 31st consecutive month.