Australia is expected to avoid a recession although the federal treasurer warns higher interest rates and dicey global conditions are slowing growth.
"Our expectation, our forecast in the budget, are that the Australian economy will continue to grow but quite slowly," Treasurer Jim Chalmers told ABC News on Wednesday.
Dr Chalmers' comments foreshadowed the Australian Bureau of Statistics' latest update on the nation's economic performance due later on Wednesday.
In the three months to March, the economy grew a modest 0.2 per cent, and 2.3 per cent on an annual basis.
The treasurer warned there was still a lot of uncertainty, both globally and domestically, that could show up in the June national accounts.
"The two things that matter most will be China and the impact of these interest rate rises which are biting on family budgets and on the economy more broadly," he said.
The Reserve Bank opted to keep interest rates on hold in September as it monitors several sources of uncertainty, including the problems facing the Chinese economy and the confusing consumer sector.
Liberal senator Simon Birmingham said the treasurer was "buttering people up" for lacklustre national accounts figures.
"The real concern is that under the Albanese Labor government the biggest economic reform they currently have on the agenda are industrial relations changes that will only further weaken our economy," he told ABC Radio.
Ahead of the June growth numbers, forecasters were feeling more upbeat following the release of some of the last remaining data points that slot into GDP.
Commonwealth Bank updated its forecast higher in the wake of strong public demand and net exports data, with the bank pencilling 0.5 per cent quarterly growth and a 1.9 per cent lift across the year.
Economist Stephen Wu said the results would mask weakness in private demand.
"Instead, the pick-up in GDP growth reflects comparative strength in the public and external sector as well as rapid population growth," he predicted.
Australian manufacturers have been under pressure from higher interest rates according to Ai Group's industry index.
The August gauge reported falling activity, employment and new orders across a range of industries although in a positive sign, revealed easing price pressures along some supply chains.
© AAP 2023