Analysis: The ASX is breaking records but that doesn't mean the economy is good shape

This week’s GDP numbers will, as usual, be spun in a couple of ways.

This week in finance:GDP growth forecast to remain weak at around 1.6 per cent over the year, well below RBA forecasts (Wednesday)RBA is rated at only a 10 per cent chance to cut interest rates again (Tuesday)Retail sales figures and the trade balance (Thursday) should again show a weak domestic economy, while the export sector is still booming

For the glass-half-full brigade, year-on-year growth will tick up from the post-global-financial-crisis-low shocker of 1.4 per cent in the June quarter, thanks largely to the weak 2018 September quarter dropping out of the calculations.

Put another way, September quarter growth this year would have to come in at 0.2 per cent or worse for things to slow further — and even the grizzliest bear hasn’t forecast that.

Those staring at a half-empty glass will likely see not only more of the same, but any semblance of growth steadily draining away.

From what the Australian Bureau of Statistics has published so far, retail trade volumes will be a drag, private sector capex too — particularly given the surprise fall in machinery and equipment investment — and dwelling investment will also chip away at the bottom line GDP figure.

Net exports will offset the falls to some extent, as will government spending — although that impact is diminishing — and quite possibly an inventory build-up will help too. However, mounting inventories are not necessarily considered “quality” growth.

Growth is slowing

NAB’s forecast is a slightly below consensus 0.3 per cent over the quarter, or 1.5 per cent year-on-year.

On that basis, whatever growth there is can be largely attributed to an expanding population, growing at 1.6 per cent.

NAB chief economist Alan Oster says

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