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Australian annual GDP growth slows to 10-year low in Q2

Australia's economy climbed at an annual rate of 1.4% in the second quarter, marking the slowest growth since the third quarter of 2009, data from the Australian Bureau of Statistics showed.

On a quarterly basis, GDP grew 0.5% in seasonally adjusted terms in the April-June period, in line with the growth in the previous quarter.

Household consumption "remains subdued" with a 0.4% quarterly increase during the period, as spending on purchases of vehicles, electricity and fuel fell, the statistics agency said. Government spending rose 2.7%, adding 0.4 percentage points to GDP growth.

Housing investment, meanwhile, fell 6.0% in the quarter, while mining investment rose 2.4%.

"Although recent cash rate and income tax cuts will provide some support to households, we expect the pace of GDP growth to remain modest over the next 12 months," wrote Sean Langcake, senior economist at BIS Oxford Economics, in a note.

"With the economy still facing considerable headwinds, we continue to expect the [Reserve Bank of Australia] to cut the cash rate in [the fourth quarter]," Langcake said, adding that they now also expect another cut in the first quarter of 2020, taking the rate to 0.5%.