Australia's GDP expanded 0.1 percent on the quarter in the three months to March, down from the revised 0.3 percent increase recorded in the three months to December. This is the weakest quarterly growth in six quarters and was also below the consensus forecast for an increase of 0.2 percent. GDP rose 1.1 percent on the year in the three months to March, down from revised growth of 1.6 percent in the three months to December.

The fall in quarter-over-quarter headline growth was largely driven by investment and net trade. The contribution from net trade shifted from a positive contribution of 0.4 percentage points in the three months to December to a negative contribution of 0.9 percentage points in the three months to March, while private investment fell 0.8 percent on the quarter after increasing 0.7 percent previously .

Consumer spending rose 0.4 percent on the quarter in the three months to March after an increase of 0.2 percent, partly reflecting the impact of a series of Taylor Swift concerts that took place during the quarter.The Australian Grand Prix was also held in the first quarter of the year for the first time since 2019, providing an additional boost to consumer spending. The contribution of public demand to headline GDP growth also rose slightly.

Today's data cover the period in which officials at the Reserve Bank of Australia left policy rates on hold after increasing them once in the previous quarter. At their latest meeting, held last month, officials left rates on hold again but again advised that they could not rule out further rate increases. Today's data, however, suggest that previous policy tightening is continuing to weigh on demand and activity.

First-quarter GDP is expected to rise a quarterly 0.2 percent for year-over-year growth of 1.3 percent. Fourth-quarter respective results were 0.2 percent growth on the quarter and 1.5 percent on the year.

Gross domestic product (GDP) is the broadest measure of aggregate economic activity and encompasses every sector of the economy and is usually released early in the third month after the reference period.

GDP is the all-inclusive measure of economic activity. Investors need to closely track the economy because it usually dictates how investments will perform. Stock market Investors like to see healthy economic growth because robust business activity translates to higher corporate profits. The GDP report contains a treasure-trove of information which not only paints an image of the overall economy, but tells investors about important trends within the big picture. These data, which follow the international classification system (SNA93), are readily comparable to other industrialized countries. GDP components such as consumer spending, business and residential investment, and price (inflation) indexes illuminate the economy's undercurrents, which can translate to investment opportunities and guidance in managing a portfolio.

Each financial market reacts differently to GDP data because of their focus. For example, equity market participants cheer healthy economic growth because it improves the corporate profit outlook while weak growth generally means anemic earnings. Equities generally drop on disappointing growth and climb on good growth prospects.

Bond or fixed income markets are contrarians. They prefer weak growth so that there is less of a chance of higher central bank interest rates and inflation. When GDP growth is poor or negative it indicates anemic or negative economic activity. Bond prices will rise and interest rates will fall. When growth is positive and good, interest rates will be higher and bond prices lower.