Q2 GDP rises 0.2 qq, under forecasts of 0.3
Consumers drag on growth, govt spending keeps economy afloat
Inflation measures still high, productivity falls again
Markets still wagering on Dec rate cut, RBA in no hurry

SYDNEY, Sept 4 Reuters Australia39;s economy stayed stuck in the slow lane in the June quarter as stiff borrowing costs and stubborn inflation squeezed consumers, leaving government spending as the main driver of growth.

Data from the Australian Bureau of Statistics on Wednesday also revealed that domestic price pressures were still running high, underscoring the central bank39;s reluctance to cut rates anytime soon even though markets are wagering on a December policy easing.

Real gross domestic product GDP rose 0.2 in the second quarter, unchanged for three straight quarters, and was just under market forecasts of 0.3.

Annual growth slowed to 1.0 from 1.3 the previous quarter, lows last seen during the 1990s recession, barring distortions from the pandemic.

For the quarter, household spending, which accounts for half of GDP, actually fell 0.2 to drag on growth, as people cut back on trips abroad. The savings rate stayed subdued at 0.6.

The economy is lacking a clear engine of growth. Tight policy settings have successfully reined in demand, but inflationary pressures are yet to be completely tamed, said Sean Langcake, head of macroeconomic forecasting for Oxford Economics Australia.

Income tax cuts and consumer subsidies will aid momentum in the…