The Australian economy has slowed, with lower than expected growth, despite a growing labour market.

GDP grew by 0.2 per cent for the second half of 2018, taking the total growth to 2.3 per cent, suggesting the economy will struggle to meet budget projections.

Treasurer Josh Frydenberg tells John Stanley the drought, lowered mining investment and a decline in housing construction has contributed to the slow growth.

Mr Frydenberg says he is not disappointed with the result.

“This puts Australia’s GDP growth rate a second only behind the United States.”

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HSBC Chief Economist Paul Bloxham tells John Stanley although GDP has slowed, the labour market is a strong indicator of where the economy is headed.

“Bottom line is we are a long way off what you would call a recession.

“I think we’re gonna get support from more government spending.”

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