Australia’s modest GDP growth doesn’t justify an automatic RBA rate rise, says Greg Jericho

The useful part

Much of the "business" of datacentres will occur in other countries, and much of the profits will go there as well.' Photograph: Steve Christo/Corbis/Getty Images View image in fullscreen 'No one is going to be building a cafe near a datacentre to capture all the business it will bring in. In the end it grew 0.4% and brought out the suggestions that the growth was "above expectations" and thus in some way hot and in need of cooling off by another interest rate rise.

How it works

• Wednesday's GDP figures suddenly showed the economy didn't grow as strong in June 2025 than previously thought, but that it grew better in the September 2025 quarter than was first estimated:
• The data suggests lots of noisy, energy-hungry datacentres and not much else Read more The news of the economy at the moment is one of give and take.
• Given those workers would already have had plenty of work to do building houses and apartments, the overall impact is pretty limited.
• No one is going to be building a cafe near a datacentre to capture all the business it will bring in.
• Much of the "business" of datacentres will occur in other countries, and much of the profits will go there as well.

What to take from it

Because imports reduce "net trade" (essentially exports minus imports), it in effect is cancelled out by the rise in imports. Because the Iran war and rising petrol prices suddenly made people think buying an EV or hybrid was not a discretionary choice, but a very essential purchase. Sign up for the Breaking News Australia email And think on this – the Bureau of Statistics revised the growth for the June quarter last year by more than that difference.

Example or evidence

• Given the March quarter had just 0.3% growth, it means in the past six months the economy grew just 0.7% – essentially at half-speed.
• This leads to some pretty docile brains (many of whom occupy the White House offices) thinking that imports are bad for the economy, and reducing them will make GDP go up.
• This is important when we look at the current "boom" in investment of machinery and equipment.
• It does, however, make it look like there is a lot of investment going on – and that has made the Reserve Bank worried that things need to cool down.

Details worth keeping

The market immediately priced in a rate rise by November. The difference between 0.3% and 0.4% is essentially a rounding error. Over the past three years, such investment has gone up 14%.

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