Australia Q1 GDP growth disappoints at 0.6%

Feeling the pinch of a mining slowdown.

According to BBVA, Australian GDP growth registered 0.6% q/q sa (consensus: 0.8%), broadly flat from Q4 2012, which the research group said is adding to signs that the waning mining boom is dampening investment spending.

"Yesterday the RBA kept interest rates on hold as it evaluates the impact of its 25bp cut in May, which brought the cumulative rate cuts to 200 bps cuts since November 2011. At 2.75% the policy rate is at a historic low, which has caused the AUD to weaken to 0.96 against the USD," BBVA also noted.

"Looking ahead, we expect the economy to gain some momentum from the supportive policy stance and sustained growth in China (albeit subject to downside risk), which would bring full-year growth to around 3.0%," it added.