The Australian economy grew by 0.2% qoq in Q1 of 2025, slowing sharply from a 0.6% rise in Q4 and falling short of market expectations of 0.4%. This marked the 14th quarter of expansion but the softest pace in three quarters. Public spending posted its largest drag on growth since Q3 2017, contracting for the first time in three quarters (-2.0% vs 0.8% in Q4), as project completions were delayed due to extreme weather disruptions. Household spending also slowed (0.4% vs 0.7%), with growth largely driven by essentials such as food, rent, and electricity. Meanwhile, government expenditure was flat after a 0.6% increase in the previous quarter. Net trade further weighed on growth, as exports shrank more sharply than imports amid rising global trade uncertainty. Inventory changes added just 0.1ppt to GDP. The household savings ratio rose to 5.2%, up from 3.9% in Q4. On an annual basis, the GDP expanded 1.3%, holding steady for the second straight quarter but missing consensus of 1.5%.