Higher interest rates, price pressures and dicey global conditions are expected to keep growth on the subdued side in the June quarter.
The Australian Bureau of Statistics will release the national accounts on Wednesday.
Federal Treasurer Jim Chalmers warned the results may be underwhelming.
“What we’ve seen in recent data is the impact of higher interest rates, high but moderating inflation, and also this continuing global uncertainty on our economy,” Dr Chalmers said on Tuesday.
Speaking in the wake of the Reserve Bank’s decision to keep interest rates on hold in September, Dr Chalmers expected to see the challenges showing up in the national accounts “in one way or another”.
In the three months to March, the economy grew a modest 0.2 per cent, and 2.3 per cent on an annual basis.
Ahead of the June result, forecasters were feeling more upbeat following the release of some of the last remaining data points that slot into GDP, with the strong results enough to stamp out fears of a negative quarter of economic activity.
Commonwealth Bank updated its forecast higher in the wake of strong public demand and net exports data, with the bank now pencilling 0.5 per cent quarterly growth and a 1.9 per cent lift over the year.
Economist Stephen Wu said the results would mask weakness in private demand, which includes household spending and dwelling investment.
“Instead, the pick-up in GDP growth reflects comparative strength in the public and external sector as well as rapid population growth,” he predicted.
ANZ also upgraded its forecasts on Tuesday.
The bank’s economists are expecting a 0.4 per cent lift in GDP over the quarter and a 1.9 per cent rise on a year-on-year basis.
The national accounts report also includes measures of labour cost growth and productivity.
