The recovery in Australian growth will be sluggish

GDP growth in Q2 was stronger than we had forecast and there is a good chance that growth picks up a bit in the second half of 2019. On that basis, we have revised up our 2019 GDP growth forecast from 1.5% to 1.7%. Even so, we expect further declines in private investment and the hangover from high household debt to mean the recovery in Australian GDP growth will be more sluggish than the consensus expects.